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posted on January 24th, 2018

Turo is stunned to have learned from the press about a lawsuit announced today against Turo from San Francisco International Airport (SFO). SFO is claiming that Turo has “thumbed their nose” at following the rules and getting properly permitted at SFO, a claim that is categorically untrue. For years, Turo has been offering, in good faith, to collaborate with SFO to create a permitting regime appropriate to car sharing, to no avail. Instead, SFO is claiming that Turo is a rental car company and that Turo hosts should be subject to the same permits and fees as rental car companies — otherwise “the playing field is not level”.

Turo is not a rental car company

First of all, Turo is not a rental car company; we do not own a fleet of cars. Everyday car owners like you and me list their privately owned cars on Turo to offset the costs of car ownership, and those in need of a car use Turo to find a car and book directly from the owners. Consumers benefit by having access to more types of cars in more locations at a variety of price points, and car owners benefit by generating extra income when they aren’t using their cars, often offsetting the crippling costs of ownership. Because these are private citizens sharing their private cars, Turo cannot be compelled by SFO to comply with SFO’s permitting framework for rental car companies, which would impose inappropriate, unreasonable, and exorbitant fees on hosts for using airport facilities that they do not use.

Furthermore, this permitting proposal most hurts the people of San Francisco. The median home value here is $1.3 million, and the median rent is $4,400 per month, making it one of the most expensive cities in the United States. By slapping this lawsuit onto Twitter with such fanfare, without even bothering to serve Turo with the lawsuit, City Attorney Dennis Herrera effectively is trying to take a tool away from San Francisco families struggling to make ends meet and tourists visiting to stimulate the San Francisco economy. He is effectively siding with Goliath, namely Enterprise Rent-A-Car, over the thousands of Davids — his own constituents — who leverage the Turo marketplace to maintain their lives in this incredibly expensive city.

Incumbent efforts to stamp out competition

Turo offers consumers more choice and a better experience than rental car companies, and those entrenched corporations such as Enterprise see Turo hosts as a competitive threat. Enterprise is using their network and significant lobbying power to get Turo regulated out of the car sharing market; they’re making huge overtures to stamp out competition and have Turo hosts unfairly taxed and regulated while they themselves have enjoyed hundreds of millions of dollars in tax breaks and bailouts. SFO, however, does not have authority under either the relevant California statutes or its own rules and regulations to regulate Turo as if it were a rental car company. Turo neither owns nor rents out fleets of cars. Turo serves as an online matchmaking platform to facilitate peer-to-peer car sharing — connecting private citizens with other private citizens to share resources.

In 2010, California’s legislature endorsed this innovative “sharing economy” model for cars by amending the California Insurance Code to recognize “personal vehicle sharing programs” as a new kind of entity, separate and distinct from rental car companies.* And California is not alone — Oregon and Washington have enacted similar laws to promote peer-to-peer car sharing and to clarify responsibilities in connection with its operation.**   

For the past year, SFO, beholden to the national rental car companies that contribute over 12% of its annual operating revenue, has ignored the California legislature and demanded that Turo apply for an “off-airport rental car permit” as if it were a rental car company. Such a permitting arrangement would require Turo to charge its community exorbitant fees, effectively preventing them from sharing cars near the airport.

Not only is this demand contrary to California law, but it is manifestly unjust. Many of the fees at issue are specifically designed to finance the infrastructure at airports used by rental car companies — terminal counters, parking lots, Air Train transportation — none of which Turo or its community uses.

In a statement steeped in irony, SFO claims that Turo must submit to this inappropriate permit to protect national, multi-billion-dollar rental car companies like Enterprise from any “unfair advantage.” This is just the latest in a relentless rally of attacks from Enterprise, which has demanded that lawmakers and airports across the country regulate Turo as a rental car company.  

Empowering thousands of Davids over Goliath

Turo is not asking for an unfair advantage and has gotten to where it is today by fighting tooth and nail against an entrenched rental car industry that spends lavishly on lobbying to protect its outdated business model. The only advantage Turo has ever had over companies like Enterprise is that it offers consumers a superior selection and experience by getting better vehicles directly from car owners. To force the Turo community to subsidize Enterprise parking lots and shuttles in the name of an “even playing field” would be nonsensical and antithetical to the principles that make San Francisco the global center of innovation.

As we have said repeatedly through written correspondence, Turo remains at the ready to work with SFO to set up a reasonable permitting structure for Turo hosts that concedes the paradigmatic difference between traditional rental cars and peer-to-peer car sharing, which, to date, have gone unanswered. Turo is happy to cooperate with SFO and other airports to draft a solution that would advance the interests of the airport — not Enterprise Rent-A-Car — and still champion the interests of all those Turo hosts — the city attorney’s own constituents — who benefit from using the Turo marketplace.

We implore SFO to work with us in a calm and rational manner to find a reasonable solution, and we ask our community — in the San Francisco Bay Area and beyond — to sign up for OpenRoad, our hub for public policy advocacy, and help Turo in this fight.

 

*Cal. Ins. Code § 11580.24.
** See Or. Rev. Stat. §§ 742.585–742.600; Wash. Rev. Code §§ 48.175.005–48.175.900.

Michelle is VP, Head of Government Relations at Turo. When she’s not advocating for a favorable regulatory environment for Turo, you might find her with her husband and two children at the SAP Arena cheering on their favorite neighborhood hockey team, the San Jose Sharks.