Las Vegas entrepreneur and lifelong car enthusiast David S. has had a storied auto career. He started as a lot porter back in the day, moved up over the years until he and his wife, Tina, started their own car dealership, and then scaled up to two. Then one day a couple years ago, Tina booked David a Polaris Slingshot on Turo for his birthday, and a lightbulb went off. “Wow!” he thought to himself, “that’s a decent price, and then I saw how many trips it had, did some back-of-the-envelope math,” and it just clicked. Now he and Tina run a profitable Turo business where they share a portfolio of vivacious, Vegas-friendly vehicles — from his coveted Slingshots, to some stylish Vanderhall Venices and some perennial vacation-favorite muscle cars.
Good business sense
That fabled birthday Slingshot trip launched a new business venture for David. “I have a couple car dealerships, so it just seemed like a good fit for me because I already have the resources, I already have the facilities, I already have a detailer, so it just seemed like it would dovetail pretty perfectly into our existing business,” he reflects. “It has minimal overhead, so we see it as an alternative investment. We do have real estate rental properties, but at the end of the day, with Turo you can make a 50% return on your investment… You can bite-size chunk it. Even a cheaper house is six figures, whereas you can get in with a fairly inexpensive car and just keep adding,” scaling up as your capital allows, he notes.
Now they’re able to lean on their existing physical operations infrastructure, including their employees, to run a well oiled Turo operation that folds pretty seamlessly into their existing day-to-day operations. “I’m definitely a car enthusiast,” he adds, so the opportunity to share a collection of unique, standout vehicles to delighted guests is just icing on the cake of his profitable side venture.
Building business in the times of COVID
David and Tina were fortunate enough to start their Turo endeavor with enough capital, access, and infrastructure to launch the venture during the height of the COVID-19 pandemic in 2020 as an experiment. “We opened during COVID, and we’re wildly profitable, so I can only imagine it’s going to get better as the restrictions relax further,” he said earlier this spring. But despite their success, the Las Vegas market has seen its fair share of distress over the last year and a half.
“I know car dealers all over the west coast and nationwide,” he reflects, “and this is the best time for car sales in the history of car sales… except in Nevada. Everyone’s buying cars, but Nevada is at 30% unemployment — COVID has completely crippled our economy… 95% of bookings are tourists,” he said. Luckily, their careful planning paid off, and after a successful first few months, David and Tina are starting to see business really take off as tourism in Las Vegas continues its furious rebound this summer.
Tips for a profitable business
David’s auto industry insider status is no doubt a competitive advantage, but his wisdom can help any budding Turo entrepreneur embark on their car sharing venture with savvy and mindfulness. The key to profitability, he shares, is “all about the price you pay for the vehicle.” He has a dealer’s license, so he “buys his cars almost exclusively at auction; buying at a discount really helps with profitability” and “it definitely felt like it was a competitive advantage,” he shares. “If your product costs 20-30% less than your competitors, you’re at a pricing advantage.” Coupled with the existing infrastructure, employees, and facilities, and he and Tina were able to reduce their hassle-to-earnings ratio significantly.
And while a dealer’s license is helpful, the key takeaway is buying at a discount so you can reinvest your capital. “One guy can use the profits from his one vehicle and springboard into the second, and then the third, and so on. That’s what I did, but I had the upfront capital.” You can learn more about how to maximize your ROI when buying a car in these handy car buying guides.
In addition to price, he also recommends being discerning with your selection and over-delivering on service. It’s important to “buy the cars right, and buy the right cars,” he notes. A deep enthusiast with a quintessentially Vegas flair for the eye-catching, he loves a headturner. “If you’re doing a base model Ford Edge or something, buy an orange one, make it interesting.” Then, he advises, “take really good photos. Customer service over and over and over. [Being in the car business], we’re used to that above-and-beyond kind of thing. Make [your customer] happy, make a friend, try to get a great review”, and don’t nickel and dime people — “you can’t cut corners and expect to succeed.”
A profitable passion project
David loves cars, and relishes marrying his passion for unique motorcars with his business acumen. Compared to his bread-and-butter businesses, “I really enjoy the Turo stuff. People are just so happy driving these cars,” he muses. And if he can have fun and buy cool cars to share with like-minded enthusiasts, all while diversifying his business venture portfolio and creating additional revenue streams for his family and employees, then it’s a win-win-win all around.