3 ms·

There are car rental companies, so I would assume that a car rental can cover the cost of a small deprecation on a car.

• amosgewirtz 7y ago
  Exactly right. The rental revenue more than offsets depreciation within 1-3 months on the platform (thought it does depend on the model). The important thing to remember is that a lot of larger car dealers are actually getting better deals on cars from manufacturers than rental car companies. When it comes to luxury cars, the depreciation tends to be steeper up front, so they'll need to be on the platform longer to make up for depreciation. We also take used luxury cars.
• dragonwriter 7y ago
  > There are car rental companies, so I would assume that a car rental can cover the cost of a small deprecation on a car. But can a rental that is simultaneously trying to undercut the incumbents on price while exceeding them in service? That's a harder question. It seems like the big innovation this service is offering is (aside, presumably, from the standard startup initial subsidy of investor cash funding artificially low prices to build position) is leveraging a short-term market fluctuation that leaves dealers with unusual sunk unsaleable inventory costs that are, in effect, subsidizing the rentals from money that the dealer was going to lose anyway, but those go away if either sales pick up or dealers adjust to the new normal of sales levels.