Turo Sues LAX

Date: 20 JUL 2018posted by Car Rentaledited by WinX

On July 12, Turo filed a lawsuit against the City of Los Angeles over Los Angeles International Airport's (LAX) classification and permitting of the car-sharing company. In a complaint filed with the U.S. Central District Court of California in LA, Turo alleges that LAX and the city are categorizing the car-sharing company as a rental car company. Regarded as a car rental company, Turo transactions taking place at LAX would be subjected to the customary permits, taxes and fees associated with rental companies allowed to operate at the airport.

The San Francisco-based company maintains that its platform is a technology company and not a car rental agency and that California legislature has yet to recognize carsharing as "a new kind of entity, distinct from rental car companies." Turo continues to contend that because they are a separate entity from car rental companies, that they should not be subjected to the gross receipt charge of 10 percent of each booking that gets paid to the airport. Furthermore, Turo contests LAX imposing a customer facility charge on Turo, will only financially support the construction and maintenance of the LAX's future consolidated rental facility (CONRAC) of which Turo will may not benefit from like the car rental companies.

Since Turo doesn't operate or own a fleet of vehicles, and will not be using the CONRAC, Turo argues that "imposing the LAX Facilities Charge on Turo and its users is thus unfair and unlawful... and not rationally related to the purpose for which the fee is being collected." The LAX facilities charge is $7.50 per day for the first five days of a rental. "Our CEO reached out to the CEO of the airport, offered to meet... expressed our desire to create something innovative, a peer-to-peer carsharing permit, our willingness to pay fees, [and] work out how carsharing would work at the airport with them," said Michelle Fang, Turo Chief Legal Officer. "And effectively, they refused to meet with us or have any discussions with us." Fang said that Turo would still prefer to negotiate an appropriate permit and applicable fee structure with LAX, rather than going to trial.

Leave a comment

Please enter your full name

Please enter your question