September is one of the best months to visit San Francisco. Little fog and warm days.
My car share earnings in September was similar, a little foggy and warm, but not hot. Here’s how it panned out.
EARNINGS FOR SEPTEMBER 2019 CAR SHARING.
I’m reporting $1,695 in earnings for September on 1.5 vehicles. Remember that my Mustang convertible is a full-time Turo rental whereas my BMW X5 is mostly a weekend rental car.
That was a decrease of 17% from last month. I’ll explain shortly.
Revenue hit a record high of $3,005. Unfortunately, expenses also came in higher than last month at $1,310.
There were two notable events for my September:
- A guest incurred a $700 towing and fine. I wrote about that here.
- This drastically increased my revenue (+18% MoM, month over month)
- Expenses jumped 152% even though most of that was for reimbursements (tows, fines, tolls, fuel, etc.). Accounting note: Moving forward I’ll itemize ‘reimbursed costs’ by using a different category.
- I had the oil changed for both of my vehicles. That total cost was $180.
Utilization for the month was strong. I had 23 rental days for my Mustang which was 2 less than August.
Mileage stayed relatively constant at 3986 miles. The average reservation used only 50% of the allocated miles.
Using last month as a guide I decided to increase my ‘included distance’ to 200 mi/day and 1000 mi/wk. The play here is that this relieves an obstacle from the guest perspective. No need to map out distances before reserving. Guests worry less about exceeding mileage allowances. As the host I can charge a premium.
The bright spot for September was that average revenue per day increased 58% MoM to $93. This is huge. In other words I was able to slightly increase prices while keeping demand or utilization relatively constant.
The excellent 5-star reviews are crucial for charging a premium over competitors. Reviews should be viewed as ‘social currency’. They shouldn’t be underestimated. It’s a clear path to differentiating yourself in the ‘sea of sameness’.
Are you providing excellent customer service? There are clear best practices when it comes to generating 5-star reviews. I’m happy to connect to discuss strategies for standing out from the crowd.
HOW DID I DO?
I missed my earnings goal by about $800. My excuse: some of my September reservations were confirmed early on when my Mustang didn’t have many reviews. As a result, guest’s locked in low daily rates during this ‘review building time’.
Speaking of reviews, they were strong. I received 10 five-star reviews for September, beating my goal of 8.
I implemented higher mileage limits successfully (so far). The majority of my reservations don’t come close to the trip mileage allowance (mileage utilization is still around 50%).
Zero accidents or claims (other than a towing).
THINGS TO WORK ON.
I haven’t had the time to research adding a third vehicle to my fleet. I want to bump this up in my priority list. Winter is coming. SUV’s are popular in my market with Tahoe just four hours east. In fact, as I write this my X5 is on a trip there.
Depreciation is a major cost center with car sharing. I plan to dedicate more research in this direction. My goal is to incorporate depreciation into these monthly results. Right now you can see that I’m just accounting for cash-in and cash-out.
Eccentric and essential ‘extras’. Alliteration aside, I’m planning to be more thoughtful on the extras that I offer. My goal is to increase extras per reservation. I have a few ideas. Expect a full blog post dedicated to just this topic.
Improve vehicle photography. I think there’s room for improvement with my vehicle pictures. I’m a big believer that great pictures help tremendously. I’d like to incorporate more ‘action’ or ‘lifestyle’ imagery in my photos to create more ‘emotion’ from prospective guests. The effect should be more reservations (and hopefully higher average prices).
Goals for Next Month.
Earnings: $1,500 (guiding lower)
I’m guiding lower since my Mustang has a 16-day reservation next month (October). You might think “that’s great, why are you guiding down?”
The issue is that this reservation was made early-on when my car was new, with few reviews and pricing set low (purposefully). In other words, this guest made out since they locked-in really competitive rates. The good news is that my car will be on the road and generating income for at least 16 days of the month.
High utilization rate: 80%+
I’m expecting to add reservations at the end of October. One advantage of a long reservation is that there’s less turnover. This translates into more time that the vehicle can be generating income. And less labor hours on my end!
September was a slight down month but strong fundamentals are showing. Those include high utilization, higher average revenue per day and relatively low mileage utilization. The 5-star reviews continue to roll in. My operations and ‘vehicle turnover’ process is working out well.
While I’m guiding lower for October (see my rationale above) I’m confident that Q4 won’t be a major flop due to seasonality. The SUV should help hedge some of that risk. And the fact that convertibles in Northern California should still perform OK. Barring any unexpected snow that is… stay tuned.
If you’re interested in learning more about car sharing and how you can generate monthly income with your automotive assets please get in touch.
If you’re an experienced host and want to reach the next level with your fleet let’s discuss resources available to you.
Until next time.