The city of San Francisco is suing Turo Inc. for operating without permits at San Francisco International Airport (SFO). Turo is a start up that allows car owners rent out their personal vehicles to other users of their system. San Francisco is accusing Turo of failing to pay the fees required to operate legally at the airport. The airport sees roughly 53 million travelers a year. Other car rental companies that operate within the airport's vicinity are required to register and pay fees to operate.
"Turo's practices contribute to congestion at SFO terminals, deprive SFO of funds needed for its operation and maintenance, and confer on Turo an unfair advantage over similarly situated businesses that operate lawfully and fairly," City Attorney Dennis Herrera said. Turo claims to have over 4 million registered users and operates in more than 5000 cities in North America and Europe. Because Turo operates using a peer to peer model, it allows travelers to find short-term car rentals that are generally cheaper than those of its corporate peers due to lower upkeep costs. Turo rakes in 25 percent of every transaction. Turo is currently valued at around $700 million after the funding from Daimler AG and South Korean conglomerate SK Holdings Co.
The San Francisco start up considers itself an internet marketplace that shouldn't need to pay the same taxes and fees required of traditional car rental companies. The American Car Rental Association, a lobbying group for companies including Enterprise Holding Inc. and Hertz Global Holdings Inc., has been countering and insists lawmakers should eliminate what they consider an unfair loophole. "Turo executives seem to think the rules don't apply to them, Herrera said. "You don't get special treatment just because you claim to be a disruptor. The internet does not provide a free pass from regulations." Turo counters with claiming San Francisco is simply acting in the interest of lobbyists. "It's inappropriate to suggest that Turo should comply with rental-car permits," said Michelle Fang, Turo's general counsel. "This is not in the best interest of citizens who want to make some extra money renting their car. It's in the best interest of Enterprise."