Turo

In previous posts, we've mocked the City of San Francisco and their ostensible war on transportation. While the City has no desire to enforce laws that might curtail unmitigated vehicle break-ins and there's an active lawsuit against Hertz for a problem caused by the city, there's also the lawsuit filed against Turo for operations at the airport. In existing state law, individuals who list their cars on Turo are defined as participating in a "personal vehicle sharing program", not a rental car transaction. San Francisco wants Turo participants to be treated as rental car companies and they might have help from the California State Legislature, which has the ability to define "rental cars" and is likely to pass one of two new laws this legislative session. L.A. Law was clearly superior to the real-life S.F. Law we insult in our blog!


Turo might adopt The Rock's feelings about state capital Sacramento.

We have to acknowledge Turo puts up with a lot. We know many companies have relocated their headquarters for a lot less than a city filing a lawsuit against the company and trying to make innovation in the industry obsolete. Yet San Francisco-based Turo remains in San Francisco, and members of the California State Legislature ... do their own thing. Insert Assembly Member Laura Friedman, who introduced a bill to make "personal vehicle sharing programs" both a "rental company" and a "rental car company" under California law, with the following rationale

Existing law defines various terms including “rental company” and “rental car company” for purposes of provisions regulating rental passenger vehicle business and usage. Existing law provides various rules and regulations that govern those businesses, including requiring specified disclosures by the company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental company’s use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. In addition, the Consumer Automotive Recall Safety Act in the Vehicle Code prohibits a rental car company with a fleet of 34 or fewer loaner or rental vehicles from loaning, renting, or offering for loan or rent a vehicle subject to a manufacturer’s recall, as specified. A violation of the Vehicle Code is a crime. Existing law also defines “personal vehicle sharing program” as a legal entity qualified to do business in California that is engaged in the business of sharing private passenger vehicles for noncommercial use by individuals within the state.

This bill would provide that specified provisions of law that refer to the terms “rental company,” “rental car companies,” or similar specified terms, are deemed to include personal vehicle sharing programs, as defined. By including personal vehicle sharing programs within those terms, the bill would make personal vehicle ride sharing programs subject to the rules and regulations applicable to rental car businesses, including provisions of the Consumer Automotive Recall Safety Act. 

The law for personal vehicle sharing programs passed in 2010 to promote vehicle sharing might now be obsolete, and the individuals/platforms who rent out a specific vehicle a few days a year would be subjected to the same rules and regulations as traditional rental car companies. The bill is couched as consumer protection -- disclosures, contract provisions, blocking vehicle tracking, fees charged to renters and blocking a recalled vehicle from being rented unless/until the recall is repaired but that brings into play a few interesting notes:

  • It's perfectly fine in California to drive one's own vehicle subject to recall -- even a vehicle that still has lien -- as long as the vehicle's not rented
  • The bill is not completely about protecting individuals; where are the notes about protecting the individual who provides the vehicle? 

We're laypeople but it's clear to us that the proposed legislation is largely about money; three of the four components of code referenced in Friedman's bill are about cash to state or local governments (two of the four sections of code are solely about money).

  • Declaring a company to be "rental company" per 1939.01 means regulation but also that airport concession fees, customer facility charges, and the "voluntary" tourism commission assessment all come into play.
  • Government Code starting at 50470 (specifically 50474) allows local agencies to set fees on "rental car companies".
  • Government Code 13995 is entirely about the "voluntary" tourism assessment one sees on rental car bills.
  • The fourth bit of code cited is specifically about consumer protection and blocking the rental of a car subject to a manufacturer recall.

In addition, the State of California declaring that the "personal vehicle sharing programs" (defined by the State of California) are also "rental companies" and "rental car companies" (also defined by the State of California) obviously would immediately end Turo's pushback in the lawsuit filed by San Francisco. Passing this bill as written means Turo would clearly be treated as a "rental car company" at the airport, which is what San Francisco desires (for revenue purposes). After all, filing a bill to declare companies like Turo are "rental car companies" means existing law declares companies like Turo to be something other than a "rental car company", the grounds for Turo's existing pushback (proving Turo's point while simultaneously making the same point moot).

Yet there's also a competing bill from the same side of the aisle! Assembly Member Evan Low has introduced a bill that would expressly prohibit "personal vehicle sharing programs" as being considered rental cars! So where will California end up on the issue? We have no idea but there's one thing we do know -- if San Francisco gets the ability to throw $20 in taxes on the first hour of a rental from Turo, Getaround, or at a company like Zipcar, the city will definitely do so! There are reasons technology-driven services like Car2Go have sadly avoided that high-tech region entirely.

 

Fees, facility charges, and taxes got you confused and/or down? The Fee Detective can explain. Send your query to feedetective@autoslash.com and we'll feature your question in an upcoming post.

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