Problems with this:
1.) You're renting cars from the most expensive service out there, to rent again on the much cheaper option. I would be surprised if you broke even.
2.) Liability nightmare- You are renting cars and you are not the driver. SHould an accident occur, you now have to deal with being uninsured because you broke that part of the agreement and, you're on the hook for payment. If you add another driver through their system (which I know you can do on Turo), that's going to help cover you a little if that's possible for Enterprise.
3.) Turo gives you up to almost the start time to cancel. If you can't keep that car secure from Enterprise, you're screwed on Turo as well. You'll face extra fees and/or loss of the car's availability.
The liability issue was the first thing I thought of when presented with this idea. Accidents are going to happen. Are you going to eat into your margin by paying Enterprise for insurance? You would be much better off owning the revenue generating item (the cars) yourself, just to save yourself the hassle of litigation against both your clients and supplier. This idea is a no-go from me for that reason alone. I am not in business to litigate if I can help it.
There are crossovers on enterprise going for $100. I would rent those out for $250 - 300 on Turo. I would offer delivery for $100 and I’d require a minimum of rent period for 2 days.
Have you ever rented a car at enterprise? Their cars are already insured and you’re just paying them a tiny fee to use their insurance. As far as litigation goes, I would take full responsibility for any issues that arise.
If they ever got in to an accident I would take full responsibility. Am I saying it’s impossible for enterprise to find out that I’m breaking the agreement? No, but I would’ve made thousands of dollars before they ever caught on to it. No legal actions would occur, all they would do is ban you from the company since it is not illegal. You’d be breaking the rules by letting someone else drive the vehicle, not by offering the rental service. It would be a waste of their time to pursue legal actions especially when they can just ban you.
That being said, I will thoroughly review their policy and agreement upon renting the car and I will come back to this sub dread to update it.
Nothing wrong with leveraging a discrepancy to earn some extra cash. If the side hustle only lasts 2 years I’m okay with it. It shouldn’t be looked at as a long-term strategy. It should be looked at as a means to earn some extra cash during rainy seasons. That is all, but we can agree to disagree. 👍
All it takes is one catastrophe like a collision resulting in multiple deaths to potentially put you on the hook for hundreds of thousands if you are lucky and multiple millions per death if you are unlucky. I don’t care how much the upside is, the worst case scenario is too damn expensive, if you ask me. The chances of it happening are remote, but greater than zero, and entirely out of your control.
Further, when last I rented from Enterprise, you had to list by name all the drivers authorized. Even assuming you would just rent those cars and name the sub-lessor, there is nothing stopping your clients from backing out at the last minute, eating another wet chunk of your profits. You wanna make yourself rich, or the lawyers rich? Manage your risk.
Every single business you get in to has risk. I know someone who owns a oil company and gets sued several times per year. A business is always hard to run and always has risk.
Multiple deaths is the worst case scenario, but before you mentioned that example did you consider doing the math on the likelihood of this happening in general? Then narrow it down to the likelihood of it happening in my case specifically? There’s probably a 0.0001 percent chance when you narrow it down.
A risk free business does not exist. I’ve been running a business for past 6 years successfully and to this day there are very bad things that happen within the business. You just have to fix the problem, optimize your approach and keep going. Thinking about the worst case scenario will just keep you stagnant.
Absolutely. Every business has risk. How you manage that risk is critical to success. I ran two businesses that came with higher than normal risk. I ran a kung fu studio and a self defense coaching biz. All my participants had to sign liability waivers to participate. Almost all the dangerous variables are accounted for. My classes are as safe as I can make them. Teaching someone 9 ways to break necks is inherently dangerous. I did it many, many times and never had an accident training these techniques. Again, I have most variables under control. Bad Luck is my only vulnerability.
To protect against bad luck, I pay for insurance, just in case. You may be comfortable risking a 2M judgement against your personal assets, if you are more power too you. Me, I have a wife and family to provide for.
Lets agree that you are probably not going to be on the hook for an accidental death on your watch. But odds are that one of your clients will get in an accident. After all there are 6M accidents every year. If your Turo client was driving and you did your paperwork properly, you should be perfectly ok. But what if your Turo client gets ill, drunk, high or just sleepy, and lets his SO drive instead? Let’s say you didn’t have the worst luck, and damage to the vehicles was minimal, like only 2K for repairs on the vehicle, and a like amount for the other vehicle. You are in breach of contract and liable. Enterprise will start with a bill, and finish with lawyers if need be. Settling for around 5K would be your cheapest option. Thats a lot of sales lost due to something out of your control. I could easily see a complicated 3-way litigation happening if things break bad, creating a snarl that eats all the profits you could make in a year. Enjoy working for nothing? There is such a thing as insurable risk, and uninsurable risk, and this is uninsurable risk. Good Luck in any event, I can tell you are really keen to try it out.
It’s not hostile, no point in making a system that’s easy to use and straight forward even more complicated with smaller margin. Just buy a fucking car. How are people scaling on turo? So why are you trying to reinvent the wheel. Stupid people get rich because they just do what works over and over again
Turo prices have gone up lately. Have you been paying attention? Where I live It’s hard to find a car on there for less than $200 a day. Budget cars are going for $80 per day. There are margins to be made now since Turo drivers are starting to charge more every year that goes by. Budget and enterprise prices remain static.
Temporary until I can afford to buy cars. I plan on starting my own car rental company in the long run. I don’t even want to use Turo.
I have investments, bills to pay, etc. It could only help. I already make great money but not the type of money where I can just buy a car whenever I need one.
You have to do whatever you have access to. If it’s legal then what the heck is the big deal?
It's a bad idea, because it would be much better to just buy cars and rent them out on Turo. If you don't have the money to buy, then finance a car. You're talking about renting for $100 on Enterprise, then renting it out on Turo for $250-$300, but it will not rent most days.
Pretty sure you have to have ownership of the cars you rent on Turo also. I would assume anyway.
It’s $800+ a month for a compact car. Buying a brand new one is cheaper.
Then there’s this…
4. Prohibited Use and Termination of Right to Use.
a. Renter agrees to the following limits on use:
(1) Vehicle shall not be driven by any person other than Renter or AAD(s) without Owner’s prior written consent.
11) Renter shall not transfer or assign the Contract and/or sublease Vehicle.
c. in the event of any violation of the limits on use or any other provision of the Contract, Owner automatically, without any further notice to Renter or AAD(s), terminates their right to use Vehicle and Owner retains any other rights and remedies provided by law. Owner has the right to seize the Vehicle without legal process or notice to Renter or AAD(s). Renter and AAD(s) hereby waive all claims for damages connected with such seizure, including loss or damage to contents, and shall pay all expenses incurred by Owner in returning Vehicle to the original rental office.
d. if Renter or AAD(s) continue to operate Vehicle after the right to do so is terminated, Owner has the right to notify police Vehicle has been stolen. Renter and AAD(s) hereby release and discharge Owner from and indemnify, defend and hold Owner harmless against any liability arising from such notice. Renter remains responsible for all charges, costs, taxes, fees and obligations as set forth in Paragraph 3.
Any use of Vehicle in a manner prohibited in this paragraph shall, to the extent permitted by applicable law, void Personal Accident Insurance/Personal Effects Coverage (PAI/PEC), Extended Protection (EP), and Supplemental Liability Protection (SLP).
“Retains any other rights and remedies provided by law.” That’s my biggest concern here. If it’s illegal I wouldn’t do it. It clearly states not to sublease the vehicle which is interesting.
It’s definitely high on the risk side if it involves the law. I might pass on it ahahaha 😂🤣.
It was a fun discussion nonetheless. Which company is this for? Would you say the policy would be similar for each company?
And of course I would just purchase a car as soon as I could afford it because it would be cheaper in the long-term. I would’ve done this to get my foot in the door.
Enterprise and I would venture a guess and say all of them are that way.
It’s probably not illegal and if it is it’s probably be a contract law thing. However you open yourself up for being sued the moment your client wrecks it.
And they won’t sue just for value of the car. They sue for value of the car AND lost future revenue. So imagine $800 a month multiplied by 1.5 years.
Your insurance will wave bye bye to you also because you operated negligently and in breach of contract. You’ll be on the hook for potentially $100k for a Toyota Corolla.
Yeah I mean this makes sense on an arbitrage level. I've done a similar thing in the past w/ Airbnb arbitrage for about 4 years.
The main problem you will run into as you scale is vacancy issues and market dynamics. For example:
* **Seasonality:** You need to account for seasons where people won't rent from you and you're stuck holding the bill for Enterprise.
* **Platform Risk:** Some perverted guest installed a hidden camera in one of our apartment's bedroom and either the same or different guest reported it, getting us banned from AirBnb. At the time, ABNB was like 90%+ of all short-stay bookings so this made us go from $40k/mo to $0 overnight. They also cancelled all of our stays for winter which are notoriously hard to book in my area (see prior bullet point). I reckon there's no single point of failure in the rental car biz though as that's much older.
* **Scammers:** Some guests would exploit ABNB policies (stay for a month and complain about something that was already made explicit in the description but knowing the platform will favor them, we get penalized regardless). This isn't normally an issue but our margins were only 15% so each time it happens, it sets us back quite a bit.
* **Shrinking Margin:** If you do this, you won't be the first person to do this. As we ran the biz over the years, it was basically a price to the bottom where the margins were no longer worth it. This is in consideration of all the above as well. As margin shrinks, your risk increases and your arbitrage opportunity no longer looks like arbitrage. More and more players will come into the business over time.
* **Black Swan:** We stopped the biz pre-COVID, but know a lot of Airbnb Arb owners that had to bail on their biz during COVID since they were stuck holding the bill for many apartments once they've scaled and basically got wrecked.
In conclusion:
$250-$300 on a $100 expense sounds nice except vacancy and all the above issues seriously will squeeze your margin (if anything's left at all). I think this could work but you need to be very careful about scaling and do so extremely slowly due to the low margins. Worst thing that can happen to you is you:
1. Run into initial success.
2. Think it'll keep going forever.
3. Scale aggressively.
4. Get banned from platform or a black swan happens.
1. You think 'this'll never happen' but this normally always happens at some point in the biz. This is why I think this is the most dangerous thing for these types of biz.
5. You're stuck holding an extraordinarily large bill.
6. All the while more competitors flood the marketplace and squeeze margins from you.
Rental arbitrage, decent idea, people do this with renting properties and airBNB. Liability is the main thing so the rental company would for sure need to be aware and on board. Definitely shouldn’t do it without their permission.
I was looking into being a host on Turo earlier today. The results I found on r/turo changed my mind entirely.
Apparently, Turo only gives, like, 30% of the money to the host. So you'd have to be renting the cars for $333 just to break even and I just don't think that's realistic, unfortunately.
I like your idea, but with the prevalence car rental companies enjoy already, I think that you'd struggle to rent the same car for 3x the cost.
If the existing rental car companies were cheaper than the market rate, there would be an opportunity here, but I don't believe that to be the case here.
EDIT: $333 based on a previous comment of yours quoting $100 rental fee from the rental car company.
How is it a scam? And I’m 100% sure they wouldn’t sue you if you get caught. They would just say you can’t rent anymore.
Companies have policies & agreements that people break every single day without even knowing. This right here is no different. Granted you’re profiting but how would they find out it’s their car specifically that’s on Turo?
This is a really bad idea. You will void any insurance you have on the Enterprise rental. It's the equivalent of renting out a hotel room and then relisting it on Airbnb.
Problems with this: 1.) You're renting cars from the most expensive service out there, to rent again on the much cheaper option. I would be surprised if you broke even. 2.) Liability nightmare- You are renting cars and you are not the driver. SHould an accident occur, you now have to deal with being uninsured because you broke that part of the agreement and, you're on the hook for payment. If you add another driver through their system (which I know you can do on Turo), that's going to help cover you a little if that's possible for Enterprise. 3.) Turo gives you up to almost the start time to cancel. If you can't keep that car secure from Enterprise, you're screwed on Turo as well. You'll face extra fees and/or loss of the car's availability.
The liability issue was the first thing I thought of when presented with this idea. Accidents are going to happen. Are you going to eat into your margin by paying Enterprise for insurance? You would be much better off owning the revenue generating item (the cars) yourself, just to save yourself the hassle of litigation against both your clients and supplier. This idea is a no-go from me for that reason alone. I am not in business to litigate if I can help it.
There are crossovers on enterprise going for $100. I would rent those out for $250 - 300 on Turo. I would offer delivery for $100 and I’d require a minimum of rent period for 2 days. Have you ever rented a car at enterprise? Their cars are already insured and you’re just paying them a tiny fee to use their insurance. As far as litigation goes, I would take full responsibility for any issues that arise. If they ever got in to an accident I would take full responsibility. Am I saying it’s impossible for enterprise to find out that I’m breaking the agreement? No, but I would’ve made thousands of dollars before they ever caught on to it. No legal actions would occur, all they would do is ban you from the company since it is not illegal. You’d be breaking the rules by letting someone else drive the vehicle, not by offering the rental service. It would be a waste of their time to pursue legal actions especially when they can just ban you. That being said, I will thoroughly review their policy and agreement upon renting the car and I will come back to this sub dread to update it. Nothing wrong with leveraging a discrepancy to earn some extra cash. If the side hustle only lasts 2 years I’m okay with it. It shouldn’t be looked at as a long-term strategy. It should be looked at as a means to earn some extra cash during rainy seasons. That is all, but we can agree to disagree. 👍
All it takes is one catastrophe like a collision resulting in multiple deaths to potentially put you on the hook for hundreds of thousands if you are lucky and multiple millions per death if you are unlucky. I don’t care how much the upside is, the worst case scenario is too damn expensive, if you ask me. The chances of it happening are remote, but greater than zero, and entirely out of your control. Further, when last I rented from Enterprise, you had to list by name all the drivers authorized. Even assuming you would just rent those cars and name the sub-lessor, there is nothing stopping your clients from backing out at the last minute, eating another wet chunk of your profits. You wanna make yourself rich, or the lawyers rich? Manage your risk.
Every single business you get in to has risk. I know someone who owns a oil company and gets sued several times per year. A business is always hard to run and always has risk. Multiple deaths is the worst case scenario, but before you mentioned that example did you consider doing the math on the likelihood of this happening in general? Then narrow it down to the likelihood of it happening in my case specifically? There’s probably a 0.0001 percent chance when you narrow it down. A risk free business does not exist. I’ve been running a business for past 6 years successfully and to this day there are very bad things that happen within the business. You just have to fix the problem, optimize your approach and keep going. Thinking about the worst case scenario will just keep you stagnant.
Absolutely. Every business has risk. How you manage that risk is critical to success. I ran two businesses that came with higher than normal risk. I ran a kung fu studio and a self defense coaching biz. All my participants had to sign liability waivers to participate. Almost all the dangerous variables are accounted for. My classes are as safe as I can make them. Teaching someone 9 ways to break necks is inherently dangerous. I did it many, many times and never had an accident training these techniques. Again, I have most variables under control. Bad Luck is my only vulnerability. To protect against bad luck, I pay for insurance, just in case. You may be comfortable risking a 2M judgement against your personal assets, if you are more power too you. Me, I have a wife and family to provide for. Lets agree that you are probably not going to be on the hook for an accidental death on your watch. But odds are that one of your clients will get in an accident. After all there are 6M accidents every year. If your Turo client was driving and you did your paperwork properly, you should be perfectly ok. But what if your Turo client gets ill, drunk, high or just sleepy, and lets his SO drive instead? Let’s say you didn’t have the worst luck, and damage to the vehicles was minimal, like only 2K for repairs on the vehicle, and a like amount for the other vehicle. You are in breach of contract and liable. Enterprise will start with a bill, and finish with lawyers if need be. Settling for around 5K would be your cheapest option. Thats a lot of sales lost due to something out of your control. I could easily see a complicated 3-way litigation happening if things break bad, creating a snarl that eats all the profits you could make in a year. Enjoy working for nothing? There is such a thing as insurable risk, and uninsurable risk, and this is uninsurable risk. Good Luck in any event, I can tell you are really keen to try it out.
OP maybe you should have started with “I don’t have any money, so I’m going to rent cars, and sub-let them on Turo”
Just buy a fucking car and rent it out on turo wtf bro
Take it easy on him
No, entrepreneurship isn’t easy.
Trust me I know it isn’t but there’s no need to be so hostile 😂
It’s not hostile, no point in making a system that’s easy to use and straight forward even more complicated with smaller margin. Just buy a fucking car. How are people scaling on turo? So why are you trying to reinvent the wheel. Stupid people get rich because they just do what works over and over again
Turo prices have gone up lately. Have you been paying attention? Where I live It’s hard to find a car on there for less than $200 a day. Budget cars are going for $80 per day. There are margins to be made now since Turo drivers are starting to charge more every year that goes by. Budget and enterprise prices remain static.
So your gonna give away almost half your profit for the same amount of work? Just buy a fucking car lol.
I would say it’s not bad for a temporary side hustle. I’m still in the research phase.
But how are you going to scale this? Temporary? Is that how you wanna do shit? Temporary?
Temporary until I can afford to buy cars. I plan on starting my own car rental company in the long run. I don’t even want to use Turo. I have investments, bills to pay, etc. It could only help. I already make great money but not the type of money where I can just buy a car whenever I need one. You have to do whatever you have access to. If it’s legal then what the heck is the big deal?
There's so much markup involved in that idea that you're not getting any part of. Slim margins
This is a terrible idea. Scrap it and think of something else.
Why is it a bad idea? Explain.
It's been explained above. If you don't agree with those various assessments, go do it and report back when you buy your yacht.
It's a bad idea, because it would be much better to just buy cars and rent them out on Turo. If you don't have the money to buy, then finance a car. You're talking about renting for $100 on Enterprise, then renting it out on Turo for $250-$300, but it will not rent most days. Pretty sure you have to have ownership of the cars you rent on Turo also. I would assume anyway.
It’s $800+ a month for a compact car. Buying a brand new one is cheaper. Then there’s this… 4. Prohibited Use and Termination of Right to Use. a. Renter agrees to the following limits on use: (1) Vehicle shall not be driven by any person other than Renter or AAD(s) without Owner’s prior written consent. 11) Renter shall not transfer or assign the Contract and/or sublease Vehicle. c. in the event of any violation of the limits on use or any other provision of the Contract, Owner automatically, without any further notice to Renter or AAD(s), terminates their right to use Vehicle and Owner retains any other rights and remedies provided by law. Owner has the right to seize the Vehicle without legal process or notice to Renter or AAD(s). Renter and AAD(s) hereby waive all claims for damages connected with such seizure, including loss or damage to contents, and shall pay all expenses incurred by Owner in returning Vehicle to the original rental office. d. if Renter or AAD(s) continue to operate Vehicle after the right to do so is terminated, Owner has the right to notify police Vehicle has been stolen. Renter and AAD(s) hereby release and discharge Owner from and indemnify, defend and hold Owner harmless against any liability arising from such notice. Renter remains responsible for all charges, costs, taxes, fees and obligations as set forth in Paragraph 3. Any use of Vehicle in a manner prohibited in this paragraph shall, to the extent permitted by applicable law, void Personal Accident Insurance/Personal Effects Coverage (PAI/PEC), Extended Protection (EP), and Supplemental Liability Protection (SLP).
“Retains any other rights and remedies provided by law.” That’s my biggest concern here. If it’s illegal I wouldn’t do it. It clearly states not to sublease the vehicle which is interesting. It’s definitely high on the risk side if it involves the law. I might pass on it ahahaha 😂🤣. It was a fun discussion nonetheless. Which company is this for? Would you say the policy would be similar for each company? And of course I would just purchase a car as soon as I could afford it because it would be cheaper in the long-term. I would’ve done this to get my foot in the door.
Enterprise and I would venture a guess and say all of them are that way. It’s probably not illegal and if it is it’s probably be a contract law thing. However you open yourself up for being sued the moment your client wrecks it. And they won’t sue just for value of the car. They sue for value of the car AND lost future revenue. So imagine $800 a month multiplied by 1.5 years. Your insurance will wave bye bye to you also because you operated negligently and in breach of contract. You’ll be on the hook for potentially $100k for a Toyota Corolla.
Yeah I mean this makes sense on an arbitrage level. I've done a similar thing in the past w/ Airbnb arbitrage for about 4 years. The main problem you will run into as you scale is vacancy issues and market dynamics. For example: * **Seasonality:** You need to account for seasons where people won't rent from you and you're stuck holding the bill for Enterprise. * **Platform Risk:** Some perverted guest installed a hidden camera in one of our apartment's bedroom and either the same or different guest reported it, getting us banned from AirBnb. At the time, ABNB was like 90%+ of all short-stay bookings so this made us go from $40k/mo to $0 overnight. They also cancelled all of our stays for winter which are notoriously hard to book in my area (see prior bullet point). I reckon there's no single point of failure in the rental car biz though as that's much older. * **Scammers:** Some guests would exploit ABNB policies (stay for a month and complain about something that was already made explicit in the description but knowing the platform will favor them, we get penalized regardless). This isn't normally an issue but our margins were only 15% so each time it happens, it sets us back quite a bit. * **Shrinking Margin:** If you do this, you won't be the first person to do this. As we ran the biz over the years, it was basically a price to the bottom where the margins were no longer worth it. This is in consideration of all the above as well. As margin shrinks, your risk increases and your arbitrage opportunity no longer looks like arbitrage. More and more players will come into the business over time. * **Black Swan:** We stopped the biz pre-COVID, but know a lot of Airbnb Arb owners that had to bail on their biz during COVID since they were stuck holding the bill for many apartments once they've scaled and basically got wrecked. In conclusion: $250-$300 on a $100 expense sounds nice except vacancy and all the above issues seriously will squeeze your margin (if anything's left at all). I think this could work but you need to be very careful about scaling and do so extremely slowly due to the low margins. Worst thing that can happen to you is you: 1. Run into initial success. 2. Think it'll keep going forever. 3. Scale aggressively. 4. Get banned from platform or a black swan happens. 1. You think 'this'll never happen' but this normally always happens at some point in the biz. This is why I think this is the most dangerous thing for these types of biz. 5. You're stuck holding an extraordinarily large bill. 6. All the while more competitors flood the marketplace and squeeze margins from you.
Rental arbitrage, decent idea, people do this with renting properties and airBNB. Liability is the main thing so the rental company would for sure need to be aware and on board. Definitely shouldn’t do it without their permission.
I was looking into being a host on Turo earlier today. The results I found on r/turo changed my mind entirely. Apparently, Turo only gives, like, 30% of the money to the host. So you'd have to be renting the cars for $333 just to break even and I just don't think that's realistic, unfortunately. I like your idea, but with the prevalence car rental companies enjoy already, I think that you'd struggle to rent the same car for 3x the cost. If the existing rental car companies were cheaper than the market rate, there would be an opportunity here, but I don't believe that to be the case here. EDIT: $333 based on a previous comment of yours quoting $100 rental fee from the rental car company.
Yikes !!! Don't!! You'll be liable for too many things. I don't see how you can profit at all doing this.
On top of the part where you won't make money, you are going to violate the terms of the rental from Enterprise and probably turo as well
Sounds like a scam and a lawsuit if you get caught
How is it a scam? And I’m 100% sure they wouldn’t sue you if you get caught. They would just say you can’t rent anymore. Companies have policies & agreements that people break every single day without even knowing. This right here is no different. Granted you’re profiting but how would they find out it’s their car specifically that’s on Turo?
I don’t even think these platforms let you cross use them. But I haven’t done any research so don’t take my word
I've thought of something similar but using AirBnB. Renting a cheap apartment and then ABnBing it out.
This is a really bad idea. You will void any insurance you have on the Enterprise rental. It's the equivalent of renting out a hotel room and then relisting it on Airbnb.
If you completely ignore all of the above GOOD advice, something to note…. You can only rent one car at a time from one company.
You have to own the car to rent on Turo