The Startup Guide to Build an Airbnb for Car Rental

The Startup Guide to Build an Airbnb for Car Rental

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The sharing economy which promotes a sustainable way of living by providing peers quick access to shared resources is anticipated to achieve remarkable growth in the upcoming years. As per statistics, the sharing economy’s compound annual growth rate (CAGR) is also amongst the highest (28.96% in the forecast period 2023-2028). While Airbnb has been a leading contributor to the sharing economy since 2007, it mostly deals with homestays and real estate rentals. Meaning, that the opportunities to launch P2P marketplaces in other sectors are still wide open

One such P2P rental niche is car rentals. In our recent research, we found out that the overall market size of the car rental industry is an estimated $102 billion in 2024. The car rental industry is also expected to grow at an impressive CAGR of 3.1% in the next five years. Thus, for entrepreneurs aspiring to set foot in the sharing economy, launching a Peer-to-Peer marketplace like Airbnb for car rentals is a lucrative business proposition. Below are some insights you should look into for launching an AirBnb for cars.

Benefits of Renting Cars from Peers

The car rental industry is fragmented into both small-size and large-size car rental businesses. However, the experience of renting from a car rental company and a peer differs a lot. Renting from peers can provide customers with a more personalized rental experience. Some key benefits of renting cars from peers are:

  • Cost Effectiveness: Individual car owners rent out their spare vehicles as a means of generating a side income and preventing their cars from deteriorating over time. Due to this, they are able to rent out their cars at much more affordable prices than private car rental companies.
  • More Sustainable: While renting in itself is considered sustainable, renting out from peers is an even more eco-friendly practice. This is because car rental companies invest in a proper fleet of commercial vehicles whereas peers utilize their spare cars.
  • Scope of Negotiation in Terms: In P2P car rentals, the rental terms and conditions can be negotiated with the car owners. On the other hand, there is no scope for negotiation in the rental agreements of car rental firms. 
  • Feedback Acceptance: P2P rental car owners often rely on repeat customers. Due to this, they are more willing to accept and work on customer feedback.
  • Unique Cars: Car rental companies often have a very similar fleet of cars selected on the basis of market demand. On the other hand, peers can provide you with unique and rare cars as well that you may not find in any rental company’s fleet.

Why Launch an Airbnb for Cars?

Car rental industry insights indicate the increasing demand for car rentals and highlight the rising business opportunities. Along with insights, there are still a few other reasons to invest in a Peer-to-Peer Airbnb-like business model for car rentals.

1. Asset-Light Business Model

Launching an Airbnb for cars is highly asset-light. The term “asset-light business model” refers to those businesses where the business owner is only required to invest in the bare minimum capital. On a P2P car rental marketplace, the marketplace owner is only required to invest in platform costs and business registrations, whereas independent car owners list their own cars. 

Workflow of Airbnb like Car Rental Marketplace 

For a better understanding, look at the following workflow of P2P car rental marketplaces.

  1. Multiple car owners register and list their cars on the marketplace
  2. Customers browse those cars and select the car they prefer
  3. To book a car, customers enter the rental date inputs in the booking calendar and proceed to checkout
  4. During checkout, customers pay the rental fee and submit a security deposit
  5. The car owner handovers the car to the customer via the selected method (pickup or delivery)
  6. On the return of the car, the car owner inspects the car for any damages
  7. In case of any damages, reimbursements are deducted from the customer’s security deposit, and the remaining amount is returned to the customer
  8. On reaching a minimum withdrawal amount, car owners can withdraw their earnings to their bank accounts.

Revenue Generation on P2P Car Rental Business

A P2P car rental marketplace owner can generate revenue via the following ways:

  1. Rental Commission
  2. Featured Listings
  3. Display Ads
  4. Subscription Packages

2. Low Competition

While a majority of websites and marketplaces exist for car rentals, such as Enterprise, Budget, Avis, Alamo and Hertz, they operate predominantly in the B2C sector. For example, nine of the top 10 car rental companies only do B2C car rental operations where independent car owners cannot list their cars. The market scenario is quite similar in almost all parts of the world. This leaves an opportunity to launch a P2P car rental marketplace like Turo and scale up to the level of top players. 

Some P2P car rental players you can take inspiration from are:

  • Turo (the only P2P player in the top 10 car rental companies)
  • Getaround
  • Snappcar
  • GoMore

3. Increase in Car Ownership Rates

Car ownership rates have also increased globally with New Zealand and the US having the maximum number of car registrations. These countries are followed by Poland, Italy, Australia, Canada, and France. In the 90s, consumers used to have one car per house but now this number has increased to multiple cars. In many developed cities, each family member has a personal car and it is also not rare to see an individual own 3-4 cars. 

In such scenarios where a family or person owns multiple cars, the chances of a car being left idle in the garage are very high. Thus, to help car owners monetize such vehicles, entrepreneurs can launch a P2P car rental marketplace. 

4. Inflation

According to the International Monetary Fund, the global inflation rate in 2024 is 5.8%. Due to high inflation rates, many consumers have resorted to doing additional jobs in order to make ends meet. This gave rise to the side hustle mentality. In the US, around 93% of the working population seems to have indulged in a side hustle. 

However, when speaking of car rental, it is not only a side hustle for many people but also a passive income stream where car owners aren’t required to actively participate in business. To cater to the requirements of such car owners, launching an Airbnb for car rentals is a highly profitable business proposition. 

5. All Seasons Business

Another reason to launch a P2P car rental marketplace is that it is a year-round business. Regardless of the season – spring, summer, fall or winters, the demand for car rentals remains consistent. Even during the holidays when other businesses witness a drop, car rental businesses witness an incline. Thus, by investing in a P2P car rental marketplace, you can ensure stable returns throughout the year and create a highly resilient business. 

Leverage All These Benefits by Launching your own Airbnb for Cars

How to Create Airbnb for Cars

After understanding the market statistics, user behavior and opportunities, we can proceed to the technical aspects of creating an Airbnb for car rentals. Here, it is essential to understand the technology you can use to build your marketplace and the features that are required to help you manage P2P car rental operations. 

Step 1: Shortlist the Key Features

To create a P2P rental marketplace for cars, you need to look for certain rent-centric features. These features will also encompass the various use cases of the car rental industry and help you manage an Airbnb for cars. In case of non-availability of these features, look for alternate software or opt for the ones that are fully customizable. 

  • Rental Booking Calendar: An in-built calendar to display car availability to customers and accept rental date inputs. This calendar also prevents double booking and helps in invoicing. 
  • Map View Filter: With the help of a map view search filter, customers can easily search for nearby vehicles. This may help you in increasing your conversion rates and providing a better service to customers.
  • Agreement Management & eSign: For renting out a car, every car owner has different terms and conditions. For example, some may prefer pets in their cars while others don’t. Thus, to sanction any such terms and conditions, you require an agreement management module along with the eSign option. 
  • Rental Security Management: To reimburse any damages to car owners, you can collect rental security deposits from customers. The security deposit amount can also be used to deduct any other charges and the remaining amount remains refundable.
  • Tiered Pricing: To target diverse customer cohorts, it is important to have a tiered pricing module that will help car owners set and levy daily, weekly and monthly rental pricing. Furthermore, an hourly rental system on your marketplace can also be very useful.
  • Request for Quote (RFQ module): Car owners who don’t want to define any fixed pricing for their vehicles can use the RFQ module. This module will help give and negotiate custom price quotes on the P2P car rental platform.
  • Vehicle Comparison: Finding a rental car for trips or daily commuting is difficult. You can simplify the decision-making process for your customers by providing them with a vehicle comparison feature. This feature creates automated comparison tables for selected cars and helps customers find the right cars as per their preferences.
  • Late Cancellations Management: Late cancellations often cause car owners losses in terms of order processing costs, which can include cleaning, servicing, or refueling of the vehicles. To prevent any such losses, you can define tiered cancellation periods and charges. 
  • Late Returns Management: By reserving a car for longer than the booked period, late returns lead to loss in terms of lost opportunity costs for the car owners. Thus, you can also define custom late return periods and applicable charges.
  • Rental Add-ons:  By providing complementary services products and services, such as child seats, WiFi, car fresheners, window shades, etc., car owners can increase their overall ticket size and conversion rates. Thus, a rental add-ons feature is also important for your AirBnb for cars.
  • Maintenance Buffer Period: The selected rental software should allow you to define a maintenance buffer period. This period will start automatically after a customer returns the car and can be used to perform any necessary checks and inspections. Once the maintenance period is over, the car will be automatically synced with the online inventory.
  • Inventory Management: The inventory management system on your car rental software should allow you to track all inventory in real-time. It should alert you on a low fleet count, help manage vehicle unavailability, and provide complete inventory reports.
  • User Management: For managing multiple users, the software should have essential user management features that allow you to check their order history, listed cars, ratings & reviews, and other account-related details. 
  • Commissions Management: For managing your earnings, the software needs a commission management module. This will allow you to set and levy your commission rates on all transactions.
  • Withdrawal Settings: The software should allow you to define the withdrawal threshold amount and minimum withdrawal interval period. It is only after meeting these requirements that car owners should be able to withdraw their earnings to their bank accounts. 
  • Multilingual and Multi-Currency Support: As discussed earlier, multilingual and multi-currency support help you target a diverse audience and simplify business expansion.

Get the Most Versatile Car Rental Software for All your Requirements

Step 2: Select a Software Technology

Based on the selected features, you can move forward to select the right software technology to build your Airbnb for cars. There are multiple software development methods available today. Let’s go through them one by one to understand which method is the most suitable and has all the features required.

1. Bespoke Development

The traditional approach to building any software is bespoke development. It was highly in practice in the 90’s and 2000’s but has lost its prominence today because of newer methods of development. For developing a P2P car rental marketplace, bespoke development may not be the right approach because of the following reasons:

  • It involves finding a development team and paying them hourly development rates. This inflates the overall  cost of development by thousands of dollars
  • As all workflows, features, modules and interfaces are developed from scratch, the overall development timeframe ranges between 2 to 5 years
  • You will also need personnel to coordinate and manage the team of developers and track the progress of the entire project

2. SaaS Software

Software-as-a-Service (SaaS), as the name suggests refers to readymade software that are hosted on the software providers’ own servers and provided as a monthly recurring service. 

SaaS software are also not recommended to create a full-fledged marketplace because of their limited scalability. 

  • Due to their never-ending recurring costs, SaaS solutions are very costly in the long run. To get access to their complete features, you will also need to upgrade to their premium package
  • SaaS software come with limited scalability options. In order to increase the number of listings, transactions and users, you are again required to pay more
  • The majority of SaaS software available in the market either support rental operations or multi-vendor operations but not both

3. Self-Hosted Software

Self-hosted software are also readymade solutions with dedicated features to support rental operations. They are tried and tested for multiple business use cases and because of their vast support and long-term affordability, can be used to develop your Airbnb for car rental.

Some reasons to select self-hosted solutions are:

  • Self-hosted solutions are available at one-time costs and unlike SaaS solutions, have no recurrent pricing
  • There are no restrictions on the number of listings, transactions and user profiles
  • You get access to all features of the software right from the beginning
  • Highly cost-effective in the long term
  • Provide you complete flexibility to select your own hosting server

Step 3: Deploy and Market

Self-hosted and other readymade software can be quickly deployed on your hosting server. Once deployed, do some primary configurations such as setting the marketplace logo, social media handles, contact us page, about us page, homepage banners, footer section, and more. You can also change the theme color and font and make sure that the entire marketplace is ready to onboard car owners. 

After full system-wide configuration, promote your Airbnb for cars for both car owners and customers. To onboard car owners, you can provide them with various incentives. Take a look at this blog to get some idea about the marketing strategies you can implement to attract and onboard car owners. 

For lead generation purposes, initially, you will need to simultaneously invest in paid campaigning and organic marketing. After developing a strong SEO base, you can decrease the expenditure on paid campaigns and rely on word of mouth, social proofing, and SEO rankings. Likewise, you will also need to come up with a markdown strategy to gain traction in the market.

Recommended Car Rental Software- YoRent

Yo!Rent car rental software is meticulously developed after taking into account the minute requirements of car rental businesses. Being a multi-vendor software, it is the industry’s finest marketplace solution for P2P car rental operations. In-built with all essential tools and features that can help you facilitate, manage, and grow your car rental business, Yo!Rent simplifies P2P operations like no other software. Furthermore, due to its unlimited listings, transactions, and user profiles, you can scale and grow your business as much as you want. 

Some reasons to select YoRent are:

  • Comes with all the essential features for car rental operations
  • Rental industry’s leading marketplace solution
  • Pre-integrated with 25+ payment gateways
  • Comes with a lifetime license at a one-time cost
  • Fully scalable and customizable
  • One year of free technical support
  • Highly cost-effective in the long term

Book a One-on-One Personalized Demo for Yo!Rent

Conclusion

The primary areas of attention in launching a P2P car rental startup are selecting the right software technology and timely onboarding of users in lucrative business regions. As more people find out about the benefits of renting out cars from peers, you can expect the entire P2P car rental marketplace model to grow. Due to this and limited competition in numerous regions, it is the right time to capitalize on a P2P car rental marketplace business. Furthermore, because of their asset-light nature, running an Airbnb for car rentals is also highly cost-effective.

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.


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