Car rental startup Turo lays off 15% of workforce after halting IPO plans amid market uncertainty

Turo, the San Francisco-based peer-to-peer car rental startup often described as the “Airbnb for cars,” has laid off around 150 employees, roughly 15% of its team, after shelving plans to go public.

The news, first reported by Bloomberg, comes as Turo tries to trim costs and stay afloat in a tough funding climate. Like many startups, Turo had been eyeing the public markets to raise fresh capital. But those plans have now been put on hold as investor appetite cools for tech companies still trying to prove they can turn a profit.

“Due to ongoing economic uncertainty and in order to strengthen our position for long-term growth, Turo has made the very difficult decision to reduce the size of our team by approximately 15%,” a Turi spokesperson told Bloomberg.

Founded in 2009, Turo built its model around letting everyday car owners rent out their vehicles to others. It’s raised over $500 million from firms like Kleiner Perkins and IAC and hit a valuation of $1.5 billion during its last funding round in 2022. But the momentum has slowed. Between inflation, rising interest rates, and a more cautious investment environment, Turo is recalibrating.

People familiar with the matter say leadership decided to walk away from the IPO for now, citing tougher market conditions and skepticism from investors about long-term profitability. Internally, the layoffs were framed as part of a broader effort to restructure and sharpen focus on sustainability.

Social posts on X echoed Bloomberg’s reporting, noting the layoffs and drawing comparisons to others in the mobility space like Uber and Airbnb, which have also had to deal with shifting investor expectations in recent years.

Turo’s platform relies on a commission model, connecting car owners with renters and taking a cut of each booking. While the idea is appealing, the startup faces serious competition from traditional rental players like Hertz and Enterprise. At the same time, it has to deal with tricky issues around insurance, host reliability, and maintenance — all of which put pressure on margins and growth.

The Wall Street Journal noted that Turo’s decision reflects a larger pullback across tech, especially among startups that had been aiming to go public over the past year. With stock markets still shaky, companies without consistent earnings are being told to get leaner and prove they can survive.

Turo hasn’t made any official public statements on the layoffs or IPO freeze. A spokesperson told TechCrunch the company is still focused on “delivering value to its community of hosts and guests” and staying committed to innovation in car sharing, though there’s no new timeline for revisiting the IPO.

For now, Turo joins a growing list of tech startups hitting the brakes and tightening up operations. According to the layoff tracking site Layoffs.FYI, at least 93 tech companies have eliminated 23,505 jobs so far this year.

The path ahead likely involves refining its approach, finding ways to stay competitive, and convincing investors it has the legs to go the distance.