by Turo
posted on July 22, 2024
From the 3rd of September, it will be easier for all Turo hosts to price vehicles competitively to maximise earnings, thanks to dynamic pricing, a new algorithm designed by our data scientists.
Until now, your listings had a static recommended price for you to consider. We’ve listened to your feedback that this tool doesn’t always accurately reflect your market dynamics or adjust to weekly demand, including weekends.
Once dynamic pricing has launched, all hosts will see prices updated to the dynamic pricing recommendations tailored to each vehicle. Rest assured, hosts are still in control. While dynamic pricing will suggest the default price, hosts can adjust prices using the calendar in the “Trips” tab to fit individual utilisation goals.
How dynamic pricing works
Dynamic pricing is a new, sophisticated pricing algorithm that is updated daily based on the latest supply and demand data, to give the best possible pricing recommendations.
Dynamic pricing uses current market data to try and calculate the best price for a car on a given day, maximising earnings by finding the optimal price. This price is based on the vehicle’s price and the probability it will be booked. The goal is to find the sweet spot where the price is as high as possible while the vehicle is still likely to be booked.
Dynamic pricing considers the following information:
- Your vehicle’s make, model, fair market value, and other car-related factors.
- Past booked prices and utilisation for your vehicle and similar vehicles.
- Supply and demand forecasts for your local market, factoring in daily demand patterns and seasonal trends.
- Other proprietary factors.
You’re in control
You can always change prices set by dynamic pricing. If you think the price should be different based on your local market knowledge or utilisation goals, you can easily change it for a specific day or as many days as you want in the calendar in the “Trips” tab.
For example, if there’s a special event in your location that you think will increase demand but dynamic pricing hasn’t recommended higher prices, you can change your prices to what you think is more appropriate during the event.
This kind of fine-tuning, changing specific prices, is a little bit like Tesla’s self-driving technology. The car does most of the work for you, but you still need to keep your hands on the wheel.
Look ahead with the new “Future prices” chart
To provide you with a better overview of how dynamic pricing fluctuates over time, look out for the launch of the new “Future prices” chart, which will show the dynamic pricing for the next 90 days. Prices are updated daily, and you’ll see how dynamic pricing changes over time and how it compares to any custom prices you’ve set, offering useful pricing insights.
Why we’re introducing dynamic pricing
Until now, you were presented with a single static price for your listing, which didn’t fluctuate with seasonal or daily demand patterns. Keeping the same price year-round can prevent hosts from maximising earnings because of under- or overpricing. Let’s go through the scenarios to understand more.
Hosts who underprice can miss out on earnings
In some pockets of the UK, hosts list vehicles to be competitively priced against comparable cars. Sometimes, this causes widespread underpricing and has a negative impact on all hosts in that market. This race to the bottom is problematic since hosts in these markets are collectively leaving money on the table.
Hosts who overprice can miss out on bookings
When hosts set their own prices, there can be a tendency to set prices too high, which leads to missing out on bookings and earning less every month.
Dynamic pricing addresses both of these problems since it requires hosts to be more thoughtful about when they adjust their prices up or down. Because dynamic pricing sets recommended prices as the default, it’ll help all hosts better maximise their earnings while hitting their optimal utilisation rate.
The need-to-knows about dynamic pricing
- Dynamic pricing sets the default prices for all hosts, requiring hosts to be more thoughtful about when to change prices and avoid leaving money on the table.
- Hosts remain in control and can still change prices using their calendar.
- The update includes more tools, like the “Future prices” chart, in addition to booked price trends to help hosts make well-informed pricing decisions.
- Prices automatically adjust to reflect market dynamics, meaning your vehicles will be able to earn even more if there’s higher demand.
- The algorithm uses new vehicle catalogue data with more accurate vehicle information, including make, model, fair market value and more, so pricing recommendations are as accurate as possible.
- The data is updated daily, ensuring it’s responsive and up to date.
What will dynamic pricing look like?
As part of this update, the individual vehicle calendars will be removed. To simplify host workflow, the calendar in the “Trips” tab will offer a centralised place to manage an entire portfolio, including viewing dynamic pricing and managing pricing, trips, and vehicle availability.
In addition to accessing dynamic pricing, the calendar in the “Trips” tab is your go-to spot for pricing tools like monthly booked price trends and the future prices chart, as well as trip info for each vehicle.
Share your thoughts
We’d love to hear your feedback on how you think these changes might impact you and what we can do to support you better. Please complete this short survey to share your thoughts on these changes.
