Lurento – The “Booking.com” for luxury and sports cars.
When it comes to renting exotic cars, most clients face a very wide range of websites and offers to sift through before finding the product or offer they wished for. But – one can have it way easier by renting on “Lurento”, a new marketplace for luxury and sports cars that launched in 2016 in Tallinn, Estonia. Lurento simplifies the booking process and indicates all rates and additional fees that can arise for security deposit, extra miles or additional drivers. We talked to founder Mihailo Dhoric about his young business and asked him about his experiences entering the German market and why Tallinn is a great city for rising startups in Europe.
Mihailo, why does Germany need a marketplace for renting luxury cars?
Germany has a lot of small car rental companies with exotic fleets, but no online aggregator or large company that make renting cars easy. If you want to rent a specific car or find the best deals, you have to browse a number of websites and either email or call to check the availability, car details, and rates. Imagine searching for a perfect hotel without a site like Booking.com. There is a lot of time wasted, and a lot of good offers missed. With Lurento, small operators can market their services worldwide at no additional cost and better utilize their fleets while clients can easily book any car they want.
There is also a trust issue. Exotic car rental businesses are associated with a lot of risks — like theft and fraud. This leads to higher rates and more friction. From the customer’s perspective, paying high rates means higher expectations; but the quality of service and the vehicle conditions can vary greatly. Hidden charges, issues with rental deposits, and getting old or “similar” cars are common.
In November 2016 you started your business in Tallinn. You have since expanded into Germany. Can you talk about what the German market looks like and what the process has been like?
Compared to other markets we serve and considering the market size, our business operations in Germany are still limited. We only have around 300 cars available. When big companies are entering a new market, a lot of planning is involved — market research, strategy, and so on. We entered the German market unprepared. Our clients were asking for cars and car rental companies wanted to join the marketplace. So here we are. But now we need more resources for further expansion. It’s not just about technology, translations, and administration. Lurento is a managed marketplace — each company that joins has to be vetted and we’re still a small team. There is an interesting fact about the German market. While companies in Italy, Spain, and France are used to travelers and international clients, most German companies are primarily dealing with locals. So there is a huge opportunity for growth.
And what does your sales strategy look like?
Our main focus is on luxury travelers; both leisure and business, as well as sports car enthusiasts. In addition, a number of travel and boutique agencies are using our services. It’s popular to say “global from day one” but in our case that was only natural. The first adopters were Americans, and now we have customers from 50 countries, with 30% of customers coming from the EU. Our selling proposition is straightforward: we offer the same rates as our suppliers and provide a hassle-free way of renting a luxury car.
What challenges does the German market present and in what ways is it easier compared to other European markets?
Sixt is very strong and has great offers in DACH. While Sixt is not our direct competitor, it presents a viable alternative for price-sensitive customers. Otherwise, there is not much difference. Small companies and clients are facing the same problems everywhere in Europe and around the world. What I like about the German market is its dynamics. We are seeing new micro operators every month, handpicked fleets, and passionate business owners.
How many models and vendors do you currently have available?
We have about 80 suppliers in Europe and UAE offering about 1400 cars in Italy, Spain, France, Germany, Switzerland, Monaco, and Dubai. I’m not sure about the number of models. We have around 150, ranging from Mini Cooper to Lamborghini to Rolls Royce. Some of the models offered on Lurento can’t be found anywhere else, like the Porsche 918 Spyder, Ferrari 458 Speciale, and newer models like the Lamborghini Huracan Performante and Ferrari GTC4Lusso. Of course, our clients usually book the more popular and affordable cars like Ferrari 488, Porsche 911, BMW M4, high-end Mercedes cars, and Range Rover models.
How do you ensure the integrity of the rental companies that join Lurento?
We travel a lot — especially our partner relations manager, Milan. Every company that joins Lurento has to be vetted. We are growing fast so sometimes we can’t check every company immediately, but it’s never more than two to three months before we carry out an on-site inspection. In addition, we maintain personal relations with business owners which helps us to deliver the best possible service to our customers. Our customer’s feedback and reviews also play an essential role.
If the company receives a lot of negative reviews, or is not able to deliver the service as specified, that company will be removed from our marketplace. So far a few companies have been removed, either due to bad business practices or their inability to deliver the service as specified.
Who is your target audience in Germany? Could this change in the coming months or years?
They’re mostly travelers spending their holidays in the Mediterranean region and Dubai but also sports car enthusiasts renting in Germany. We still need to offer more benefits to locals renting from nearby companies. That includes better offers, a German language interface, and a membership or loyalty program.
The rates will slowly go down as we grow so more people will be able to afford our services. However, Lurento is a value-added marketplace, and our mission is to provide a premium service, so we’re not going to compete with the sharing economy or budget car rental services.
Although your founding team comes from Serbia, you decided on Tallinn as your base of operation. How would you rate the city — and Estonia in general — as a startup location?
We started Lurento with and existing US company because we already had experience with running a business in the US. However, I quickly decided to register in Tallinn as it was much easier to work with our suppliers through an EU company. I love Tallinn. It’s an interesting and vibrant city given its size. What Estonians have done in just a couple of years is incredible. They’ve managed to create an entire ecosystem for a digital economy. Now it’s easier to run your business if you register in Tallinn than it would be in London or Delaware. I don’t know what our tax advisor will say in a year or two, but that will not change the fact that Tallinn is one of the best European cities for digital entrepreneurs.
What would you have liked to know before you set up your startup?
Hiring people for a startup is quite different than hiring for positions in an established company. Before Lurento, I was a partner in a digital marketing agency, so I invited a few people I’ve worked with before to join me. Back in the agency, I was their manager and they’re used to my help and support. But running a startup is quite different. Being experienced for a specific role is not enough. Things are changing everyday so you need to adapt quickly. You have to be your own manager and find creative ways to solve problems. So a startup requires a team of people capable of doing things they’ve never done before. You have team members, not employees. And it’s much harder to say goodbye to your teammate, but it has to be done sometimes and you can’t hesitate.
What was the deciding factor that led you to make the transition into this business?
Back in 2015, a friend of mine from Canada asked me to help his friend in Austria with his marketing efforts. His friend just bought a fleet of high-end sports cars. Having experience with travel and ground transport — I worked for Groundlink from 2010 to 2012 — it sounded interesting so I got involved. I didn’t know a lot about the high-end car rental industry, so we talked about the business every day.
I learned about the fragmented market, trust issues, high costs of marketing, fraud and theft, types of clients, mobility, and of course about exotic cars. This niche market was stuck in the 90s. I was always passionate about digital marketing, product development, and luxury travel so I couldn’t resist the opportunity.
How great is your own passion for luxury cars? Do you rent any of the cars offered yourself?
I like big cars and SUVs, especially the Range Rover Sport and Mercedes G Class. My co-founder, Rade, is passionate about sports cars like the Ferrari and Porsche. We have a few friends who are company owners, so we can try new models for free. That’s a nice fringe benefit.
Thank you Mihailo for the interview! If you’re interested in renting an exotic car, find it on Lurento.