posted on February 23, 2018
A story of Goliath and thousands of Davids
A few weeks ago, we were stunned to learn of a lawsuit filed against Turo by the San Francisco City Attorney, Dennis Herrera, in an effort to prohibit peer-to-peer car sharing at San Francisco International Airport (SFO). We stand by our initial response that this lawsuit is unjust and inaccurately classifies Turo as a car rental company, and we have now filed a countersuit against San Francisco for unlawful and unconstitutional practices. Among other problems with the city’s positions, only the voters of California can approve a tax on peer-to-peer car sharing, and by attempting to impose the same fee structure as rental car companies on the Turo community, San Francisco is violating Article XIIIC of the California State Constitution, which was amended by Proposition 26 (a.k.a. the “Stop Hidden Taxes Initiative”).
The city’s lawsuit was the culmination of months of dogged efforts by incumbent car rental players, namely Enterprise Rent-A-Car, to quash the peer-to-peer car sharing industry and the thousands of hosts who use Turo to offset the cost of car ownership. Enterprise and their lobbyists argue that Turo is a car rental company, and thus should be regulated like a car rental company.
As the largest rental car company in the world, Enterprise exerts its influence through hundreds of paid lobbyists, expansive political donations, and even its own political action committee¹ to secure lavish tax loopholes and favorable regulatory environments. The billions of dollars of annual tax advantages that the rental car industry has secured for themselves would never be available to the Turo community. These unfair advantages aren’t enough for Enterprise, as they have been lobbying airports and lawmakers across the country — including San Francisco — to limit citizens’ ability to share their cars as they see fit, and this is the most high-profile volley of their national campaign.
Confronting their own obsolescence in the rapidly changing mobility landscape, they’re sinking to bullying tactics to submarine Turo and mire hosts with astronomical fees for sharing their cars. Instead of innovating to keep up, they’re using influence, bought and paid for, to keep the innovators down and to regulate, tax, or litigate Turo out of existence. With Turo, everyone wins but Enterprise.
For years, Turo has tried to collaborate with SFO to create a permitting structure that would be fair to both the airport, which gets over 10% of its annual operating budget from car rental fees, and Turo hosts, who do not rely on the same airport infrastructure — Airtrain, parking lots, rental counters, etc. — that incumbent companies do. But these olive-branch efforts to collaborate constructively and fairly have been rejected by SFO. Instead, Herrera filed the lawsuit to serve the interests of multibillion dollar rental car companies, rather than those of Bay Area residents and the tourism industry in San Francisco. He concedes that his aim is to stop Turo from “charg[ing] lower prices than competitor rental car companies”,² an unabashed and undisguised nod to the special interests that the city is appeasing.
We would be happy to comply with fair regulations that properly categorize Turo and our community the same way California state law does — as a peer-to-peer car sharing platform. As far back as 2010, the California 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.³
It is inaccurate, therefore, to categorize Turo, a technology platform that connects car owners with others who need a car, as a rental car company. Turo hosts are individual, private car owners, sharing their cars to help make ends meet. From the single mom working together with her kids to keep their car ready for action to the creative student working to pay off his student loans, Turo gives everyday people the opportunity to turn a notoriously expensive family cost into an earning engine.
Today, we fight back against Goliath on behalf of the thousands of Davids out there. We stand up for the underdogs striving for a better life. We fight for the innovators who are met with resistance for trying to improve the status quo. We fight for consumers’ rights to share cars in San Francisco and all over the world.
¹ https://www.fec.gov/data/committee/C00219642
² https://www.sfcityattorney.org/2018/01/24/herrera-takes-turo-court-cheating-competition-sfo/
³ Cal. Ins. Code § 11580.24.
Michelle Fang
Michelle is Turo's General Counsel and de facto movie reviewer. Her sassy movie review Slack channel, The Fang Of Justice, is a perennial favorite among the Turo literati.
