Would you share your car with a stranger?

With about 1,400 models on the platform, Turo, which entered the Canadian market in 2016 and also operates in the U.S., U.K., Australia and France, promises a variety of options for any driver. But Cedric Mathieu, senior vice-president in charge of Turo Canada, also believes the company promises a solution to driving’s terrible inefficiencies. Just five per cent of a car’s life is spent on the road, he says. The rest of the time? It’s parked.

“Turo was built on a very simple but ambitious mission,” Mathieu tells the Star, “and that’s to put the world’s 1.5 billion cars to better use.”

Yet car use in Toronto appears to have hit its limits. Walk by any major intersection on a weekday evening, and it feels like there simply isn’t an extra car length to be found. How would getting those otherwise parked cars on the road improve that? Mathieu spoke to the Star last week:

A lot of people get nervous about allowing even a friend to drive their car. How do you convince people to lend their cars to total strangers?

In a post-pandemic economy, we’ve seen people struggle with a high cost of living, as well as a general rise in self-employment or entrepreneurship. I think those two trends have pushed more and more Canadians to list their cars on the platform. Some of them are doing it to just offset the cost of ownership, because it’s hard to make your payments on everything, whether it’s financing, or paying for insurance or parking.

So some car owners are joining the Turo platform to do that. But others have been joining the platform to build up a business through sharing their cars on the platform. We call them Power Hosts, and they’ve been an essential ingredient to our success over the past few years.

We do a couple of different things to convince people that Turo is a safe and real economic opportunity, but the most important is providing insurance, and providing an experience for the host that will make them feel confident that whatever happens to the car on the platform, they will be covered. We offer $2-million worth of liability coverage as part of every trip on the platform. The host has a choice of protection plans, including one with no deductible at all. They know their personal insurance is not going to be on the hook for whatever happens during a trip.

Are you a tech company, or an insurance company? It sounds like you’re a bit of both.

We’re definitely not an insurance company. But insurance is a key part of the Turo business model. It’s a key aspect of creating trust in the platform. We partner with insurance companies — we have a great partnership with Economical, and ICBC in British Columbia.

You’ve mentioned Turo is supposed to appeal to tourists, but also city dwellers. How big a demographic is the latter?

When you look at the overall distribution of trips, especially in Canada, we have a pretty even mix of international travellers, domestic travellers and local travellers. That’s interesting, in itself, because the average booking time on Turo is around three to four days on average. We’re not talking someone just booking a car from point A to point B to run some errands.

I think it’s really about getting access to a car to run errands for the whole weekend, or get away from the city and go to the cottage, or another short weekend getaway. I think that’s really the use-case we see for local city dwellers — using Turo as a way to replace car ownership.

Car insurance has become very expensive over the last year. How does that affect the way you do business?

Managing risk is a key part of our business. We do a lot internally to make sure that we manage risk, and price for risk, in a way that enables the company to achieve its goals. That means doing a number of things when screening guests in general and making sure that people booking cars on the platform can be trusted. We verify their identity, validate their driver’s licence, and go way beyond that. We have an internal model called the Turo Risk Score that helps us predict the likelihood of an accident happening.

So who doesn’t get to use Turo?

There are simple cut-offs. You have to be 23 to be able to rent. You have to have, of course, a valid driver’s licence. There are other parameters that could affect your ability to book a car on the platform, but it isn’t a black-and-white case.

Over the last couple of summers, car rental companies got rid of much of their fleets. Last year, we had a massive backlog of car parts, and car rental prices went through the roof. Did that happen on Turo? Do you expect things to change in the next couple of years?

We’re a long way from the supply crunch of the COVID years between 2020 and 2022. We’ve seen a normalization of the market, both in terms of supply and pricing in 2023, but I think supply levels overall are still lower than pre-pandemic years, with some significant disparities depending on the geography. I think that’s leading to higher prices for consumers still in some markets, at certain times of year.

At Turo, it’s been a bit of a different story with our more flexible and less capital-intensive peer-to-peer model. I think our host community has been able to adapt and react to evolving market conditions way more quickly that the traditional car rental industry has been able to. The pricing you see on the platform tends to be correlated with the overall market, but, I think, without as many variations that we’ve seen on the market in the past three years.

You mentioned Turo has 1,400 different models. What’s the weirdest or most interesting car you’ve seen?

One that comes to mind that’s still on the platform is the DeLorean from “Back to the Future,” with all of the additions from the movie. You can get anything from Ferraris to Lamborghinis to classic cars.

Ride-sharing companies have been found to worsen congestion in major cities. Now, Turo isn’t a ride-share company — but are there similar problems with car-sharing?

It’s something I think a lot about. The way I see it is that peer-to-peer car-sharing is creating more efficiency in the system by going beyond the single-car ownership model. From that standpoint, it helps decrease the number of cars on the streets, because it’s all about increasing utilization of cars that are already in existence.

We’re trying to create a world where Toronto’s cars are being used 10 to 15 per cent of the time, instead of being used about four per cent of the time. They’re already taking too much space in the city, and you wouldn’t have to add more cars every year to city streets that are already overcrowded. You’re making better use of existing cars in circulation. From that standpoint, I think car-sharing offers a great solution.

If Toronto roads are already this congested, and cars are only using them four per cent of the time, wouldn’t increasing that number make congestion worse because it adds more traffic jams or congestion?

I think it’s a fair point, but I think you have to think about not just cars in circulation, but also the number of cars in the city, and the amount of space used by parked cars. All of those cars parked on the side of the road are also taking space, even though they’re not actually driving. I think we have to take a system-wide approach to thinking about the situation as a whole.

If we live in a world where the utilization of cars is 10 per cent of the time, rather than five per cent, you technically need half as many cars in the world. Of course, it’s a long process, and something that takes a lot of time to unfold, but that’s how I’m thinking about it. I think that’s what makes the mission even more exciting. It’s going to design a better and more efficient solution for the future.

This interview has been edited for length and clarity.