Although it had to share headlines with a deadly pandemic and hotly contested presidential campaign, America’s ongoing struggle against racism was also a major story in 2020. And that includes over at the peer-to-peer car-sharing company Turo. "To be honest with you, we've had some really incredibly vocal and charismatic Black leaders within Turo who shared with us some really insightful data about the lack of access to capital, the average black American, and how that community, generally speaking, is really at a disadvantage in terms of accessing capital compared to any other community in the US," explained Turo CEO Andre Haddad.
Which is why Turo created a pilot program called the Seed Initiative. The company has teamed up with microloan provider Kiva to provide interest-free loans of up to $15,000 to fund Black entrepreneurs in 14 US cities so that they can use the platform to start car rental businesses. Successful applicants can crowdfund up to $7,500 on Kiva, which Turo will match dollar for dollar.
"I've always been enamored by the impact that our platform has on anyone who becomes a host [the term for someone who loans out vehicles on Turo]—the fact that they can start turning the car away from just being a depreciating cost center into an asset that generates cash and helps pay for itself," Haddad said. "But in order to be able to participate and create that economic value, you have first to have a car. And unfortunately, there are lots of people who just can't afford to even buy a car, and therefore can't even access the marketplace," he told me recently by phone.
Vernon Byers of Atlanta is a serial entrepreneur who's applied to the Seed Initiative. "I decided to join Turo because it provides a great service and opportunity for the community and entrepreneurs," Byers told me by email. "The Seed Initiative is a thrilling process as you get to share your vision with a successful and supportive collective who are excited to see you succeed," he wrote.
“How can I take the business to the next level?”
Miami-based entrepreneur Dennis Brown is one of the first people to receive funding through the Seed Initiative. "It was perfect timing, because at the time I was strategizing, 'OK, how can I get more vehicles—how can I take the business to the next level?'" Brown told me. He's been renting out his Chevrolet Camaro on Turo, bringing in between $750 and $1,000 a month in the process. But now, he plans to add something a bit more accessible to his fleet "for the crew that wants to explore Miami—there's three or four of them, but they want to get a car that, you know, they can all fit in," Brown said.
As part of the approval process, Turo's staff help applicants decide on a suitable vehicle. "I was talking with the person from Turo, who sent me a list of the top-performing cars," said Santo Alima, who works for Capital One in Florida. "That's one of the reason I picked it. Also, Nissan has a deal where they do an extended warranty," Alima told me.
Nissan is working with Turo to provide three years of free maintenance for Seed Initiative hosts; although applicants aren't restricted to the Japanese brand, Byers also plans, like Alima, to purchase a Nissan.
"We're being much more involved with these particular entrepreneurs because we want to make sure that they benefit from all of the data and the infrastructure that we built," Haddad told me. "We want to make sure that these newly minted entrepreneurs are really successful; we want to make sure that this experience is really a very positive one for them," Haddad said.
For now, Turo is investing $1 million in the Seed Initiative—enough to fund more than 130 new hosts. "For us, we're still a small company, and that's a lot of money," Haddad said to me. "But we hope that as we get bigger and as the initiative shows good traction, that there's a lot of appetite for these loans and also good repayment rates. If those two metrics show good performance, I think certainly I will be very motivated to expand the pilot into a much bigger program, maybe even an ongoing program," Haddad said.
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