Maui Turo owners pivot to keep up with growing car rental supply
Maui residents with vehicles listed under Turo are finding problems getting the same attention they had over the summer even with the largest vacation rental supply in the state.
“The problem was getting other cars at the time at a fair value,” said Adam Sachs, 57, a co-operator of a Turo fleet and serial entrepreneur on Maui.
The Turo boom came during a Hawai‘i rental car shortage when rentals were diminished by more than 40% since the beginning of the pandemic while demand for rental cars also soared.
As a result, Turo had their largest period of growth on Maui during May, June and July.
Many jumped on the opportunity when the summer craze started, which now has left over 200 vehicles still up for rent on Turo on the Valley Isle.
A Turo operator who requested anonymity said she listed a used SUV she bought in July, but as of late, her listing hasn’t been performing.
“The high prices have really come down and the market is really saturated now,” she said.
Sachs said he recognized the opportunity to fill an empty spot in the market after Governor Ige lifted the mandatory quarantine protocol, but has since reduced his fleet size because prices have dropped.
He recalled buying into the idea after his significant other put her Toyota on the app in May, saying she’d ‘walk if it meant the $100-$125 a day’.
The Turning Point
Since the summer has ended, reports have surfaced on Maui revealing uncertainty in Turo’s future and returns that have been cut in half.
“If you asked me would you go into the business blindly today, I’d say, ‘No’, and I would also say that if you have just one or two hours, ‘probably not worth doing it’,” said Sachs. “If you can go in and get six cars that were newer cars that were something that our agencies didn’t have, you could potentially make a few bucks, but you’re not going to get rich.”
Some former Turo operators on Maui have even started listing their cars online, leaving behind what was once a viable business idea.
“In July, we were able to rent a small SUV for $125 a day. Right now, we’re lucky if we can get $60 a day — that same vehicle,” said Sachs. “It’s just not worth the effort.”
The anonymous Turo operator echoed Sachs’ claim, saying that she couldn’t stand to lower her price to $60 just to skate by, so instead, she treats the car as her own.
“If I didn’t think I would use it as a personal car or if I’d be unhappy if I got stuck with it, I personally wouldn’t have bought it,” she said.
Sachs initially leased a fleet of six vehicles for Turo, though he knew the success would be short-lived once car rentals replenished.
Sachs currently owns a “small fleet” of niche vehicles listed on Turo.
“[It] can be a real challenge. You might be sitting with the car for a week or two without it going out, and you still know if you’re financing those cars, you’ve got payments to make,” he said.
Sachs recognized that while Turo would not replace rental cars, it would provide for those who want the “experience” of riding in a nice car on Maui.
As Turo’s top vehicle index suggests, the return on investment for cars in the 30K – 50K price range is expected to be higher than more expensive vehicles. It’s a rather small mold to fit into affordable and niche at the same time.
The Bright Side
Sachs and other Turo operators predict there could still be green pastures ahead for Turo operators on Maui, but not before some changes.
One issue has been airport access for pickups and dropoffs.
“We’re cracking down harder on illegal rental cars and Turo cars,” said Maui Airports District Manager Marvin Moniz.
While Kahului airport (OGG) restricts commercial vehicles to park in their lots, a disconnect between the rule and enforcement and dissemination of the rule has caused some tension.
“I mean, where are you not supposed to park?” responded one Turo operator who requested to remain anonymous. “There are no signs.”
Many Turo operators still find ways to park in the airport even though the rule is in place, and many don’t agree with the rule at all.
“It’s just not right that independent operators are having a difficult time competing, but that…that’s the real world, and I can deal with the real world. Just when you say I can’t park at the airport. That’s a problem,” said Sachs.
Uber drivers had similar prohibitions because they posed as direct competition to the taxi industry, but Uber’s legal team worked closely with airport authorities to permit customers to reserve rides at over 600 airports, according to its website. Uber reported trips to and from airports represented 12% of its gross bookings in Q3 of 2021.
As operators on Turo and other car-sharing platforms navigate the changing market on Maui, many also fear that their local governments stand on the side of major rental car companies instead of putting the money in the pockets of local residents.