Peer-to-peer car sharing service Turo is the latest “sharing economy” company making waves in Canada. While seemingly operating like a transportation network company (TNC) such as Uber, right down to the way their insurance arrangements work, Turo so far does not seem to be receiving criticism for its system.
If the company manages to settle on a model that all provinces can agree on, it could set a precedent for other similar peer-to-peer sharing businesses to follow.
The company launched its services in Canada on April, operating in Alberta, Ontario, and Quebec. Once its insurance issues have been straightened out, Turo plans to go national with its services.
Turo works by allowing users of its app to lease their cars to other users. Once a user books a rental, the car’s owner receives 75% of the rental cost, with the remaining 25% going to Turo.
The company hopes that through its service, underutilised cars could be put to better use. The peer-to-peer service also gives those who normally cannot afford to purchase an automobile an alternative and affordable way to drive.
“People want the freedom to be driving a car, you still have to know how to drive, but they don't want to own it," Haskayne School of Business professor Debi Andrus told
CTV News in describing Turo’s business model.
From a liability standpoint, such an arrangement can be a headache for insurers, but Turo managed to strike a deal with a major insurer to cover its users.
Intact Financial Corp. has an agreement in place with Turo, making insurance coverage available to Turo users through two of
Intact’s brands:
Intact Insurance and Belair-Direct. Through this deal, every rental is backed by $2 million in auto liability insurance.
Intact’s insurance model for Turo is similar to the arrangements TNCs have. If a car registered to Turo is being used for personal usage, then the owner’s personal insurance coverage is in effect. If the vehicle is either being delivered to a Turo lessee or is being used by a lessee, then Intact’s commercial insurance coverage kicks in.
Other insurers are anticipated to support Turo as more of their customers use the app. In early July, La Capitale General Insurance and its subsidiary, L’Unique General Insurance, allowed their customers to participate in Turo’s peer-to-peer service.
Related stories:
La Capitale customers can now rent Turo cars
Insurance already handled as Turo, self-billed Airbnb of cars launches in Canada
