Luminati does this too, the provide an SDK to app developers that lets users decide between seeing ads, paying a fee or allowing use of their IP when it's not being used.

how do they do that?

One example is the Hola VPN which, in itself, is a VPN that uses other users' connections to act as a VPN to almost all countries, but they also sell access to this network of IPs via https://luminati.io/.

Basically like Tor, some VPNs route someone else's VPN connection through your VPN client. If I want an IP address in Sweden and someone in Sweden wants a US address some VPN companies would just route our traffic through each other's home addresses (potentially leaving you on the hook for what the other user was doing).

Tor doesn't automatically turn your connection into an exit node when you connect to it.