Car Sharing Firm Turo Pushes Back and Countersues San Francisco

After being hit with a lawsuit last month, Turo stands its ground and countersues the City of San Francisco.

UPDATED Feb 23, 2018 2:35 PM
Car Sharing Firm Turo Pushes Back and Countersues San Francisco

Late last month, The Drive broke the news that the City of San Francisco had filed a lawsuit on behalf of the San Francisco International Airport against well known AirBnB of cars, Turo. San Francisco City Attorney Dennis Herrera claimed that the internet-based car sharing company is getting around the airport's permit system and it needs to be charged the same as rental car companies. Turo, however, stands its ground that it is not a rental company and has countersued the City of San Francisco. 

Turo is suing for unlawful and unconstitutional practices. One of the big items is that San Francisco is violating Article XIIIC of the California State Constitution (Proposition 26), because only the voters of California can approve a tax on peer-to-peer car sharing. Turo claims that the lawsuit against it comes after months of dodging large rental car companies, mainly Enterprise Rent-A-Car, attempting to hold back peer-to-peer car sharing. 

Speaking of Enterprise Rent-A-Car, Turo claims that being one of the largest rental car companies in the world, Enterprise puts the pressure on lawmakers through paid lobbyists, expansive political donations, and even its own political action committee. Enterprise backs bills in states all across the country, bills which can have a negative effect on the peer-to-peer car sharing industry. 

In California, Enterprise was the backer of Bill No. AB 2246, which specifically dealt with peer-to-peer car sharing. In Indiana, Enterprise was the backer of Bill No. SB 242 which dealt with accommodation tax. The language of the bill was attempted to be amended by an Enterprise lobbyist to capture Turo under the tax. In Idaho, Enterprise was the backer of Bill No. HB 517, which requires car sharing and RV sharing platforms to collect sales tax. The same bills suggested to hurt peer-to-peer car sharing occurs elsewhere in the country in Maryland (Bill No. HB1759), in New Hampshire (Bill No. HB1558), and in Maine (Bill No. HP1201), all backed by Enterprise.

I chatted with Michelle Fang, General Counsel at Turo, on the countersuit. She told me that on the point of San Francisco's getting around fees, "we don't not want to pay a fee ... we want it to be a just fee proportionate to the business we are doing." 

We went on to chat about the comparison to the business they handle on the airport grounds compared to the rental car companies. Where the rental car companies may have offices and a location inside the airport, Turo utilizes the airport grounds to arrive and drive away with no need for a staging area. 

SFO wants Turo users to pay an $18 "SFO Facilities Charge" and in addition to that charge a 10 percent tax on every booked vehicle. If a Turo host offers a car for $100, SFO wants to charge $28, whereas other services such as Uber, Lyft, and Taxis which require a staging area only get charged less than $5.