In January, the city of San Francisco made the unusual move to sue a new technology company. Turo, an application company that allows people to rent their personal cars, had not paid the fees required to operate legally at the OFS airport, the city claimed. Turo states that it should not be subject to the same regulations as the leased car rental companies. And today Turo responded by contravening the city.
The city says that Turo is disobeying the established rules to keep people safe and maintain a level playing field. Turo states that the city is bringing water to established rental companies such as Enterprise and Hertz.
It's a climb in a turf battle of months
It is an escalation in a territorial battle that confronts traditional vehicle rental services with upstart mobility companies that seek to disrupt their business model, which probably sounds familiar to anyone who has followed Uber's rise to dominance in the past. years. Like Uber, Turo states that it is a technological platform that helps car owners earn extra money by "sharing" their vehicles with other people. Uber finally had to admit that it was more than just a neutral software provider; Turo still uses that distinction with pride.
Turo, which claims around 4 million users in more than 5,000 cities in North America and Europe and has been dubbed "Airbnb for Cars," says it attracts travelers because they can find cheaper short-term car rentals. than those of their corporate peers. Drivers also avoid waiting in the lines to pick up their cars. The company, formerly known as RelayRides, has raised money from Daimler AG and currently has a value of $ 700 million.
Turo, which has a cut of 25 percent of each transaction, allows its users to know and exchange passwords. Often these meetings take place at airports, which causes this last legal battle. "Turo and our community are being perceived as a major threat to the dominant market power they have to rent cars," Michelle Fang, Turo's general counsel, told The Verge.
"They" refers to Enterprise Rent-a-Car, the 67-year-old rental company based in Clayton, Missouri. Fang says that Enterprise, along with the American Car Rental Association, is spearheading a national effort to pass state legislation hostile to Turo's business. "They see us as an existential threat," he says, citing bills filed in Missouri, Maryland, New Hampshire, Maine, West Virginia, Indiana and California that would tax companies like Turo as if it were a car rental company.
"They see us as an existential threat"
But city officials say that Turo wants special treatment that has not been won. "Turo executives seem to think that the rules do not apply to them," city attorney Dennis Herrera said in a statement last month. "They seem to think that traffic congestion is a foreign problem, and that your company does not need to pay its fair share for the public facilities that it is benefiting from." You could not be more wrong ".
Turo users like the varied selection of cars available on the platform, say the hosts. One user, who asked to remain anonymous, tells The Verge that most of the people who rented their 2012 Volkswagen GTI have had a VW in the past and enjoy talking to other owners.
She says the departures from the airport in SFO represent approximately 70 percent of the transactions she makes in Turo. "The rents covered not only the payment of my car but also my insurance," he adds.
Photo of Amelia Holowaty Krales / The Verge
Fang argues that Turo is nothing like a car rental business, and should not be regulated as such. "We do not own a fleet of cars, we do not have any of these physical locations," she says. "We are in the business of providing an Internet platform, we are definitely not a car rental company."
Can Turo get away with the same argument that Uber tried to do for so many years? Maybe, because unlike Uber, it does not seem, at least not on the surface, that Turo shares Uber's goal of dominating the total market. Fang also points out that, unlike Uber, who routinely ignored attempts by regulators to end it, Turo has been trying to negotiate a solution with SFO for months, but the airport has refused to come to the table. "We're not a car rental company, we do not think it's appropriate," she says. "But we are willing to reach some kind of commitment."
When facing Turo, the car rental industry runs the risk of being trapped in the past. Car rental companies have struggled to keep their stock prices on the rise as vehicle ownership models evolve and "mobility" has become the buzzword du jour. But they have not necessarily been hunched over. Avis reached an agreement with Waymo de Alphabet to clean and maintain the cars without driver of the technological giant. Hertz is renting cars for stand-alone tests from Apple. And Enterprise is also trying to position itself as one of the first to adopt vehicles without a driver.
"The relations with the airport that we have are extremely important for us"
In a statement, Enterprise says that while it is "open to new ideas and innovation," it also believes in fair competition. "Today, we continue to evaluate all new mobility ideas, including how to manage an autonomous fleet," a spokesperson said in an email. "However, we believe that the playing field should be level and fair to all those involved in ground transportation, and that is especially true when it comes to safety issues, such as designations of designated airports, as well as any legal restrictions related to the removal of vehicles from the manufacturer ".
That echoes the comments that Fang said he heard Enterprise lobbyists press for passage of legislation that restricts Turo's business. "In one of the face-to-face meetings, we heard an Enterprise Lobbyist say, 'We just want a level playing field,'" he said. "The irony is that the field is completely tilted to its advantage."
Other car rental companies say they will be watching the legal battle between Turo and SFO. The chief of innovation at Avis Budget Group, Arthur Orduña, told The Verge that it helped to clarify why car rental companies protect both their airport territory.
"The relations with the airport that we have are extremely important for us," says Orduña. "Manage and maintain those relationships now and in the future, especially as we evolve and our fleets evolve, as we move forward to [autonomous vehicles] that is something that we have to work closely with the municipalities that own and manage the majority of the airports "
He adds, "Very interested in seeing how this develops."