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posted on August 3, 2020

In an effort to promote a more predictable experience for guests, empower them to comparison shop, and sharpen the competitive edge of Turo in the market, Turo will be updating some of the nuts and bolts of the existing distance settings in the Host Hub on Wednesday, August 12.

Guests aren’t accustomed to forecasting their mileage before booking a car, so when they get hit with a hefty additional distance bill after their trip because hosts have very low distance included in their daily price, they can have a jarring and upsetting experience. It’s important for hosts to allow only the distance they’re comfortable with their guests driving, but when hosts set a rockbottom daily price with low distance included and high additional distance fees to game the system, the surprise charge can discourage guests from coming back to the marketplace, which subsequently takes its toll on the broader host community.

Read on for what’s changing, as well as insights into current distance trends to help you evaluate your options as you revisit your distance settings.

Turo will calculate the cost per additional mile

The ability to select additional distance fees lets some hosts charge unreasonable fees for additional distance driven to unsuspecting guests, leading to subpar experiences and alienated customers. To level the playing field and standardize the additional distance calculations so they’re more logically tied to the daily price of the vehicle, the additional distance rate will be calculated when the trip is booked by dividing your daily price by your daily distance included.

This revised calculation makes the price clearer, more transparent, more consistent, and easily understandable by hosts and guests alike, and hosts can flex their additional distance price up and down by adjusting their daily price.

Most vehicles will have 200 miles as a minimum daily distance

Previously, the minimum daily distance option was 100 miles, with additional options in 50-mile increments. After thorough analysis, moving the minimum allowable distance up to 200 miles (in the US & UK; 300 kilometres in Canada) will have a minimal impact on the actual number of miles guests are driving, but will mitigate some of the price-gouging experiences with low distance included and high additional distance rates. 

However, to be mindful of high-value, specialty, and luxury vehicles that fall into the Deluxe and Super Deluxe Class categories, hosts in the US & UK will still have access to the 100- and 150-mile daily distance setting (200 kilometres in Canada), since these valuable vehicles can require a little extra TLC. Hosts in the US and Canada who have a Super Deluxe Class vehicle will unlock an even lower minimum (75 miles in the US, 100 kilometres in Canada) to help safeguard their nuanced and valuable investments.

Our study showed that guests average far fewer miles than the allowance — vehicles that include 100 miles per days are driven an average of 72 miles per day, while vehicles that include 200 miles are drive an average of 93 miles per day, and vehicles that offer 250 or more miles per day are driven an average of 119 miles per day. Increasing the minimum daily distance option to 200 miles will not only give guests much more latitude and ease range anxiety, but also level the playing field for hosts.

Weekly & monthly distances will be calculated using the daily distance included

Another inconsistency that sparks frustration for guests is the discrepancy that can occur between the daily, weekly, and monthly distance included. Currently, hosts can set a daily distance that doesn’t compute with the weekly and monthly distances included — you can offer 200 miles per day, but then only offer 700 miles per week, thus shortchanging the guest 700 miles and causing confusion. At times, a guest can extend their trip, pay for more days, and not get any additional miles to drive during the extension. This counterintuitive experience is silly, so moving forward, the weekly and monthly allowances will be calculated by the daily distance included, enabling a simpler, more intuitive, and logical experience for both hosts and guests. So with the new math in place, a vehicle that includes 200 miles per day would include 1,400 miles per week, and 6,000 miles per month. Hosts concerned about longer trips putting a lot of miles on their cars can consider adjusting their trip length settings to control the mileage potential.

Travel trends & distance analysis

Some keys insights the team gleaned from analyzing existing guest driving behavior can help hosts as they reconsider their approach to their distance settings.

Insight 1: The longer the trip, the shorter the distance traveled per day

Shorter trips tend to get closer to the upper allowance more frequently, whereas longer trips tend to normalize the daily distance traveled, regardless of distance included. We speculate this is because shorter trips are booked for very intentional use cases (e.g. day trips), whereas longer trips tend to be more akin to vacation use cases, where guests have less of a time-bound agenda. Guests who book those shorter trips with lower distance included, you can see below, drive nearly all the miles included since they’re likely booking a car for a bespoke trip that they’re going to drive all in one day. Even a three-day trip averages far fewer miles per day across all buckets.

Insight 2: The more miles offered, the more demand you access

Savvy guests who are hip to the distance restrictions filter for more miles, and actively pursue cars with higher distance allowances. Offering 200 miles opens you up to 88% of guest bookings, and offering up to 500 miles opens you up to 93% of guest bookings. 

Offering unlimited distance, of course, opens up that remaining 7%, plus gives you access to a special badge and filter.

More miles mean more guests

These upcoming changes should improve pricing transparency for guests, level the playing field for hosts, and boost the competitiveness of Turo in the broader market. In today’s world, consumers expect transparency, consistency, and intuitiveness from every product and service they patronize, and marketplaces must rise to the occasion to meet those standards to remain relevant and competitive. Surprise fees tend to discourage customers from coming back, so building a more consistent pricing structure while preserving host control is critical to building a sustainable marketplace.