Like old battles between Uber and taxi companies or Airbnb vs. hotels, Salt Lake City is now in the middle of a new war between traditional car rental companies and an online car-sharing firm called Turo.
Turo is “operating here at Salt Lake City International illegally. They don’t have an agreement with us to do so,” airport Executive Director Bill Wyatt told the Airport Advisory Board this week. So the City Council is drafting an ordinance that could impose big fines that Wyatt says may drive Turo into signing airport agreements.
Turo uses its online service to connect people who would like to rent out their personal cars with potential customers. This week, for example, it advertised online that 84 cars were available for rent and pickup at Salt Lake City International Airport — from $21 a day for a Chevrolet Spark to $230 a day for a Maserati Ghibli.
The cars are not kept at the airport. The owners and renters make arrangements on where to meet there, exchange information and keys, and send renters on their way.
“It could be exactly the same as when you come to pick up a friend or family member at the airport,” said Steve Webb, senior communications director for Turo.
So the firm argues it isn’t using many airport facilities nor requiring signs or any extra work by airport employees. It says any fees it pays should be much less than a traditional rental car company — more like those paid by Uber and Lyft, said Michelle Peacock, Turo’s vice president for governmental affairs.
But Wyatt says another company, Silvercar by Audi, operates similarly to Turo by sending out Audis from dealerships for pickup by renters. He says it signed an agreement with the airport for a 10 percent transaction fee. He said Turo seeks agreements instead to pay about $2 for trips in and out.
Wyatt said that may violate Federal Aviation Administration fair competition rules for airports, and could generate legal challenges by rental car companies and others that pay higher fees.
“We have broad authority and require anyone doing business at the airport, because it’s an airport, to have a permit with us to do so,” Wyatt said.
But he added that, under current law, citations to Turo users for violation would be misdemeanor criminal charges. “That’s not really our intent,” he said, adding the new city ordinance under consideration would make them civil violations similar to parking tickets.
But the fines under consideration could be huge — $500 or more per violation.
“What we discovered in the early days with Uber and Lyft is that they operated in a very similar fashion. They came in and started doing business,” Wyatt said, until the city fined drivers for operating outside regulations.
“At some point, the dollar amount [from fines] gets high enough that you get their attention, then you can make a deal,” he told the Airport Advisory Board.
Peacock said Turo has been trying to negotiate in good faith with the airport. She said she thought an earlier meeting was productive, and that Wyatt and officials had agreed it is different from traditional car rental companies and should be treated differently.
But later, she said, the city told Turo it instead now figures it “has all the obligations of a rental car company.” As Wyatt told the airport board, “To us, they look a lot like an off-site rental car company,” but is still trying to figure how to classify it.
Peacock said Turo will continue to try to work with the city and will not rule out lawsuit if it proceeds with its high-fine ordinance.
She added, “We know that the rental car industry is in close communication with airports across the country trying very hard to stop us from getting permits from any airport … and we do not yet have a permit with any airport.”
Car rental companies also asked the Utah Legislature in a hearing last May to make Turo pay the same taxes they face — saying it is trying to use purported distinctions to escape tourism and sales taxes along with airport fees.
Mike Taylor, vice president of Budget Rent A Car and president of the Car and Truck Rental and Leasing Association, told lawmakers then that such tax evasion could give Turo or other firms like it a 30 percent to 50 percent price advantage.
Sen. Curt Bramble, R-Provo, has introduced SB190 to outline insurance and business responsibilities for peer-to-peer car rental companies like Turo. Peacock called it “a terrible bill” that says “here is what a peer-to-peer car-sharing company is, and you have to do everything that a rental car rental car company has to do.”
She said it fails to recognize that companies like Turo “don’t own any cars” and are serving individuals “sharing cars to offset the cost of car ownership.”