Washington, D.C. – Today, NetChoice welcomes the news that Turo, an online platform enabling people to share their personal cars with others, has countersued the city of San Francisco over attempts to treat and tax the startup as if it were a car rental company.
“This is yet another example of an entrenched cartel boxing-out a new competitor, just to limit consumer choice and keep prices high,” said Steve DelBianco, President of NetChoice. “If the city could force Turo owners to pay these exorbitant airport fees, then it could likewise impose the fee on anyone driving into SFO to pick up friends or family. That’s ridiculous, but so is the aim of this lawsuit.”
Unlike car rental companies, Turo is not in the business of renting passenger vehicles to the public – it owns no fleet of cars to rent. This distinction between a peer-to-peer car sharing platform and a car rental company has been observed by the State of California in its creation of a personal vehicle sharing framework in AB 1871. It has also been recognized by the U.S. Department of Transportation which has observed that “peer-to-peer” car sharing programs are distinct from rental car companies. But, the city is ignoring this distinction with a tax that violates California law and the state’s constitution.
“Turo is not remotely like Enterprise or Hertz,” concluded Steve DelBianco. “The big rental companies convinced California tax authorities to let them avoid half a billion dollars annually in sales taxes on their fleet purchases. That lost tax revenue could go a long way to help airports such as SFO pay for services and infrastructure.”