Airbnb for cars is here; rental car giants are not happy
They have fleets with hundreds of thousands of vehicles and command multibillion-dollar streams of revenue.
But in the rapidly shifting transportation landscape, even the Goliaths of the rental car industry — some of the best-known brands in the world — worry about being left behind.
That may explain why some of the largest rental car companies have spent several years waging a quiet legislative war against startups, led by a company called Turo, that are trying to change the way people rent and own vehicles. Turo is a peer-to-peer car-sharing company — think Airbnb for cars.
Like Uber vs. the taxi industry, this fight is a clash between an oldschool business model and a modern technology platform inspired by the sharing economy.
The traditional model is run by hulking corporate brands that promise safety and predictability. The new model offers a more customized experience.
Airports have become the front line in the battle between carsharing and rental companies. For decades, rental car companies have paid airports on average 10 percent of their gross receipts — an amount worth billions — for the privilege of setting up shop. For ignoring this traditional arrangement and meeting customers at the curb, Turo has been sued by the city of San Francisco and received a cease-and-desist letter from the Maryland Department of Transportation, which operates Baltimore/ Washington International Thurgood Marshall Airport.
“Enterprise Rental Car is a multibillion-dollar company with so many benefits afforded to them, and they are trying to snuff out this tiny little startup that barely has a foothold in Maryland,” Turo’s head of government relations, Michelle Peacock, said. “It doesn’t make any sense.
Without access to vehicle titles and vehicle identification numbers, Turo doesn’t have access to recall notices, Peacock said. And in Maryland, safety recalls don’t prohibit vehicles from being legally driven.
But Rosemary Shahan, president of the Consumers for Auto Reliability, said Turo’s leadership is ignoring the potential disaster that awaits if a single recalled car on the Turo platform results in a deadly crash.
The company should, at the very least, force users to check their VIN before they can join the platform, Shahan said. Often car owners don’t know their vehicle is subject to a recall.
“All it takes is one high-profile crash and their name — that’s what they’ll be known for,” she said. “I hope they can learn from the experience of other companies. Whatever they think they’re saving, it isn’t worth it.”