See how Salt Lake City’s new airport dead-ended a Utah car-sharing company

Airport officials want to regulate Avail as a car rental business, but the peer-to-peer vehicle service warns blurring that line will “backfire across the country.”

Just days before the busy Memorial Day travel weekend, the revamped Salt Lake City International Airport hit the brakes on the car-sharing service Avail.

Launched in Utah in 2019, the company quickly became a disruptor of the car rental industry nationwide. Travelers flying out of the airport can park their car with Avail for free while they’re gone, and passengers flying into Utah can borrow the car for less than a traditional rental. The person loaning out the car either makes a few bucks on the side, or at least comes home to a sparkling clean vehicle and no parking fee.

Avail partners with a commercial airport parking and shuttle company to make everything work. But the Salt Lake City airport put an end to Avail’s business May 23, when it required that partner to stop working with third parties, including peer-to-peer services.

“We had to make a lot of cancellations,” said Avail CEO Mike Osborn. “A whole bunch of customers are scrambling at the last minute, and prices are just crazy right now.”

Demand for travel is surging as people get vaccinated and destinations ease restrictions.

That trend, coupled with a vehicle shortage from the pandemic, made Avail one of the few affordable choices for a temporary set of wheels. And with the car-sharing company now offline in Utah, its customers are not happy.

“I just got an email saying that they are canceling our reservation, and that we cannot park with them,” one customer wrote in a May 23 Yelp review. “I had to go find other parking, and pay for it. Avail is a scam company that will leave you hanging last minute.”

Osborn said it’s no coincidence the airport shut down his business ahead of a peak travel period. He suspects the powerful car rental industry lobbied against Avail.

“We know these companies really well; we know how aggressive they are,” Osborn said. “We’ve seen them in every market try to influence airport officials.”

The CEO added that the 14 other Avail-serviced airports — including Denver, Phoenix and Los Angeles — are more open to innovation.

A competitive edge?

Shane Andreasen, a director at the Salt Lake City airport, said his office has been trying since Avail’s beginnings to get it to sign a car rental operating agreement.

“They don’t view themselves as a rental car company, and they so far have refused to sign our agreement,” Andreasen said. “We have an obligation to treat similarly situated tenants the same. ... We can’t give one of them a competitive advantage over the other, and that’s really what they’re looking for.”

The airport currently has nine car rental companies on-site. Those companies competed in a bidding process and received 10-year contracts.

“With those terms comes a really high level of service and also a high expense,” Andreasen said. “They rent the facilities from us. They pay a significant amount of rent, so we’re always looking to preserve their revenue stream.”

The airport also allows six car rental companies to operate off-site, with a shuttle service, via permit.

“They pay 10% of gross revenues to access the airport,” Andreasen said. “And that’s industry standard across the country.”

Avail’s business model attempts to skirt car rental fee requirements, he added, creating an unfair business environment.

Osborn said the airport’s requirements instead place an unfair burden on his business. He already pays taxes to the city for cars that stay overnight at his partner parking lot, as well as a vehicle use fee every time a shuttle takes his customers to the airport.

Asking Avail to pay an additional 10% of its revenues to the airport, he argued, is like being taxed twice.

“That’s the crux of it here,” Osborn said. “... The model for rental cars did not contemplate also a parking element.”

He especially bristled at the notion of signing a permit labeling Avail as a car rental company instead of a car-sharing service.

“As soon as we blur that distinction, then that backfires across the country,” Osborn said. “Lawyers tell me it’s real important.”

Seeking a legislative fix

The debate over car sharing isn’t limited to Utah. Earlier this spring, the Massachusetts Supreme Judicial Court ruled against Turo, a company with a similar model to Avail, after the operators of the Boston Logan International Airport alleged the company illegally avoided paying car rental fees.

Some airports are willing to explore pilot programs with car-sharing companies. Denver International is allowing Avail to operate, at least for now, on a daily $10 per parking stall fee plus 5% of the company’s local revenue, according to the Denverite news site.

The car-sharing clash harks to the “Wild West” days when ride-hailing platforms like Uber and Lyft began piling up cars in airport pickup lanes several years ago.

After ironing out some regulations and a fee structure, the peer-to-peer service was allowed to continue. Ride sharing now accounts for 70% of commercial trips to and from the Salt Lake City airport, and the facility has been heavily redesigned to accommodate Uber and Lyft.

Now, with car-sharing again transforming the way people get around, Salt Lake City airport officials and Avail operators are looking to the Utah Legislature to sort out the ensuing mess.

“Nothing’s sticking. I think a lot of airports are waiting for this to be handled legislatively,” Andreasen said. “... We’d like it resolved sooner rather than later.”

Rep. Robert Spendlove, R-Sandy, said he’s working on a bill for the next legislative session that would strike a compromise between car-sharing platforms, car rental companies and the airport regulating them.

“We’re trying to figure out how to level the playing field, to keep everyone on the same page,” Spendlove said. “It’s not an easy thing to do, but I’m committed to find a solution.”