Major Rental Car Companies Want Car Sharing Services to Be Equally Regulated

Rental car companies get $3 billion in tax breaks, a Turo host gets none. 

Danny Korecki

Big rental car companies such as Hertz and Enterprise want state and local governments to regulate car sharers who may only share their personal cars for a couple of days a year. 

These rental car companies, including Enterprise, Avis, Budget, and Hertz, have secured their own $3 billion in annual sales tax exemptions, and Enterprise, one of the largest rental car companies in the world, has pressured lawmakers by backing bills requiring car-sharers to charge rental car taxes and fees in a number of U.S. states.

At the beginning of this year, The Drive reported that car sharing firm Turo going up against the City of San Francisco. The City of San Francisco claimed that Turo should be treated the same as car rental companies. Turo countersued.

"Turo hosts have an economic disadvantage compared to giant rental car companies. NetChoice estimates that rental companies avoid paying $3.2 billion annually in state sales taxes, while Turo estimates that [its] hosts have paid over $450 million in state sales taxes when they purchased their personal vehicles," Michelle Peacock, VP and Head of Government Relations at Turo told The Drive.

So the City of San Francisco wants Turo to be charged the same as a car rental company and big-name car rental companies like Enterprise want Turo to be charged the same as a car rental company, but are they going to share the $3 billion in annual tax benefits given to those big rental companies?

Beyond the fact that an online car sharing site owns no cars or fleet, a line in the sand on taxes may help lawmakers differentiate between a car rental firm and a car sharing firm. Only time will tell.