Rental car companies have been waging a quiet legislative war against start-ups | Hacker News Reader

Rental car companies have been waging a quiet legislative war against start-ups

washingtonpost.com

172 pointstim333160 comments

Over the last year, I've really changed how I think about "tech giants," their competition with other parts of the economy, and what it all means. The realization we'll see 3-5 trillion-dollar tech giants very soon triggered it.

Let's take Thiel's startup = monopoly statement seriously for a minute. He didn't mean monopoly in the traditional/legalistic sense. He meant dominating some niche, so that ordinary "margins trend towards 0" rule doesn't apply. 0-marginal costs helps. Network effects too. MSFT are a platform, distanced from market forces by network effects and lock-in. Google & Amazon are middle-men, aggregators and platforms distanced from market forces by network effects. FB is all network effects.

The reason Uber could raise so much money was because they seemed to have a good chance of "dominating" a market, and playing the middle-man between taxis and passengers everywhere, forever. A 1% chance at a one trillion dollar market cap.. that's worth ten billion.

For a chance at a piece of a thiel-monopoly on cars, investors will happily bankroll big loses. Big enough to sink competition. When you are playing for a trillion-dollar monopoly, losses don't matter.

I dunno what to think of competition like this, at scale. This is a different flavour of capitalism.

In any case, neither side wants normal, textbook laissez faire markets. One side is playing for monopoly. The other side is playing for structural stasis via legislation/regulation.

Lately I've been thinking about economics from an ecology perspective. I think the "other side" of the problem is consolidation and deregulation of the banking industry.

Stagnating markets look like farms, clear-cut native ecosystems replaced with massive monocultures that actively suppress competition using artificial techniques. Building a farm is a gamble. It requires identifying a good crop, large up-front investment in clear-cutting, and ongoing investments in regulating competition. Everything looks like a nail when all you have is a hammer... well, big banks naturally take this path because they have lots of money and connections to political power.

An innovative market is like a jungle, diverse competition of many specialized organisms for innumerable niches... when one species fails, another immediately takes it's place.

Local banks invest in smaller businesses with low-overall risk and consistent ROI. These banks work with the marketplace. They are analogous to fungi in forest ecosystems, which have symbiotic relationships with the trees that serve as the forest's foundation ([1])... a jungle market, with sustainable innovative competition, emerges from networks of small local banks.

We must rigorously defend competition in the banking industry because it shapes the rest of the economy.

[1] Listen to https://www.radiolab.org/story/from-tree-to-shining-tree/ , or if you don't have time skim https://jgi.doe.gov/retracing-roots-fungal-symbioses/

> "I dunno what to think of competition like this, at scale. This is a different flavour of capitalism."

it's not a different flavor, it's simply not capitalism. it's more akin fascism where wealth concentrates in the few, who then turn around and wield that as power through the state. our duty as citizens is to be vigilant against these sorts of concentrations, and counter-act them through democratic, social, and economic means (e.g., the recent sentimental shift regarding facebook).

> "...normal, textbook laissez faire markets..."

"normal" is so highly relativist to be meaningless (and "textbook" is redundant to it), and "laissez faire" is quite ambiguous. markets require rules because people will disagree and get into fights otherwise (if i have a gun, should i be able to shut you down?), so even a free market has regulations.

rather than throwing out such loaded terms, let's debate which regulations will lead to a more stable and fair market. let's favor small businesses over large (e.g., remove corporate welfare and rein in the corporate veil) to minimize corruption and encourage innovation. let's make taxes more progressive (larger businesses benefit disproportionately from government spending, so it's only fair). let's level the playing field, which in a sense is another way of saying let's moderate those network effects.

> This is a different flavour of capitalism.

It’s capitalism outside of time. A company isn’t seen a a slice in time, it’s seen as a cone of futures.

https://upload.wikimedia.org/wikipedia/commons/thumb/1/16/Wo...

@trengriffin has some fascinating tweets on the economics of software companies that speak to this.

This is my favorite:

There is no place in financial accounting for the concept of network effects, or the increase in the value of a resource with its use. This actually implies negative depreciation expense in accounting parlance. the fundamental idea behind the success of digital companies (increasing returns to scale) goes against a basic tenet of financial accounting (assets depreciate with use). For digital companies, the bulk of the cost of building an idea-based platform is reported as an expense

https://hbr.org/2018/02/why-financial-statements-dont-work-f...

https://twitter.com/trengriffin/status/969042566019612677

>playing the middle-man between taxis and passengers everywhere, forever. A 1% chance at a one trillion dollar market cap

Investors in Uber had to be hoping for either a larger than 1% chance, expanding beyond taxis, fundamentally growing the taxi market, or all of the above. The existing taxi market has a total market cap of well under a trillion dollars, even including companies like Uber. The total US stock market only has a combined market cap of about 30 trillion, so I think you're overestimating the number of trillion dollar market cap industries that exist and the extent to which investors are gambling on success having payoffs quite that high.

I don't know... Uber (et al) opened a lot of people to the "lets a hire a driver" mindset. Outside of some major urban centers, the idea of taking a cab was just weird. Uber came a long and suddenly people were taking them everywhere. Not just people who would have otherwise taken a cab, but people who otherwise would have driven themselves.

This is just anecdata from my observations and discussions with others who had similar observations. But it would be interesting to find real numbers on this.

My experience is that outside of "major urban centers," Ubers are pretty thin on the ground. I live about 40 miles outside of Boston and the couple of times I've looked, there's been little or nothing available around me.

Are your local taxi services better than Uber?

I assume they're not very good although I've never used them. But given that Uber doesn't seem to be a practical option, I guess they're better?

True, the actual outcomes and probabilities are complicated, and there are many success scenarios where uber doesn't yield a trillion dollar market cap. I was being simplistic, to demonstrate the principle.

Apple, Amazon & Apple are headed towards that trillion now, so I think this is a possibility, and possibilities drive investment. If the stock market itself stays good, it is almost inevitable one of the three will tip that number soon. Once one does, I'd expect a half dozen within a decade.

On the taxi market cap... This is an interesting one. I agree that uber had their eye on more/bigger opportunities (especially self driving), but ignoring that... The market cap of an industry is not only related to its size. It's related to the margins, lock-in and other attributes of the companies operating within it. Also, debt & capital efficiency. A more competitive market may have lower market caps, because margins are thinner and companies can fail.

IE, while market cap of the industry might be Y, "an uber" dominating that industry might still achieve a market cap of 5Y.

Especially seen from the US: I think that investor thinks that Uber is the future of transport, period. The replacement for buses, local train, taxi, car rental, car ownership.

In that world, cities pour money in Uber instead of their failing bus/metro public services. Car manufacturer and insurer are commodities behind Uber, driving is either automated or as cheap as legally possible, but also commodity behind Uber. Basically Uber would be in control of the totality of money for transporting people semi-locally from A to B, which means the lion share of the margin. That's worth 1 trillion or more, even if Uber does not manage everything.

Me and everyone I know have barely ever taken taxis before the taxi apps arrived. It was a long wait, expensive and quality sucked. And if you hailed a cab on the street, you had two options: expensive or incredibly shitty (unoficial ones).

Now it's common to order an Uber everywhere, few times a day. Open competition brought prices down, short wait removed the barrier, and star feedback have had a very significant effect on quality.

It's not just monopolizing existing market, it's improving it for customers.

"... losses don't matter" unless perhaps it's directly your own money and if you care or consider the opportunity costs, where else could have that money gone?

These are 2 different business models. Centralized one with scale effects and decentralized one where participants take care of different aspects of car maintenance on their own and platform creates network effect. You can't apply the same rules to these systems as regulation mechanisms are different.

Funny bit: we trust Uber's driver rating MORE than the fact that official taxi drivers are "pro" and comply with regulations i.e. the value of this regulation is negligible. So enterprise car rentals need to ask following question: where in the process of making money we forgot about delivering value to customers.

I had to avail myself of cabs on a number of occasions over the years in a backwater town. There were a number of outfits that were all perfectly compliant with the law and regulation and although they were independent cabs they were all dispatched by the same idiots.

In no particular order I was...

- Only picked up an hour late because a different cabbie stopped by the shop I was in front of to shop and took me home after he got his groceries.

- Picked up by a cab that had been in an accident earlier and the steering was in some way totally screwed in a fashion that made the car veer to the side unpredictably when it hit a bump. I thought at first he was blind drunk until he showed me that it took a quarter turn of the wheel to make the wheels turn at all.

- Picked up by a cabbie that was showing his little brother how to maximize revenue by picking up and dropping off as many people as possible along an optimal route while talking about his time in prison along with a colorful story about his friend smuggling cigarettes in his rectum. Kudos for entrepreneurial know how but the trip took waaaay longer than it should have because 5 different people going different places were in the car.

There was one outfit that was technically non compliant after the county I worked in in decided that county specific taxi regulation including requiring outfits to paint their cars was actually going to be a thing. These were the only people that showed up in a reasonable time, provided good service, and actually took a damn card in the cab. They also used to violate the law by dropping me off in the half assed county where I worked.

So long Mr P's taxi and thanks for all the rides.

The regulations that don't keep taxis from ripping people off or threatening their safety but DO ensure that the "investors" in taxi medallions earn some money can collectively burn in the pits of hell.

I haven't used Uber, but I have used Lyft. I wouldn't trust these drivers' ratings. My experience is that the conditions of the cars are generally better but about 20% of the time a driver will be at the wrong spot for pick-up. I've had to cancel and demand a refund way too many times. Also the driving isn't any better than the taxi drivers' I've had.

On the other hand I can get a new, clean, well-maintained and current-year car to myself for an entire day from a rental company for a 25% premium (inclusive of all the taxes and fees) on the cost of a round-trip Lyft between my home and my commute train station. When my family travels the weekly rate on such a vehicle is only about the equivalent of 7-8 such round-trips. That's an incredible value, in my view.

If you're in an area with free parking, the value of Uber/Lyft is substantially reduced. Alternatively, the total cost of rental cars needs to include $ spent on parking during the rental.

Rentals still come out ahead sometimes, which is why it's great we have both options.

That's a great point, and clarifies why I have never used these services. Where I live, I park for free anywhere, or at most $1/hr at a street meter.

Driving is work for me - I don't want to pay extra to do work. Also, a lot of the time you need to ride a bus to get between the airport and the rental car place, which is often a slower and generally worse experience that Uber or Lyft.

You make a good point that the value of regulations for Uber is negligible. Regulatory capture is an understandable motivation by industry but its weird to see the public embrace it. I see a lot of people in this thread complaining about how Uber, AirBNB, and Turo aren't fair to industry. The point of regulation is to protect the public. If they aren't needed for that purpose they should be repealed for existing players. Taxi Medallions artificially constraining the supply of taxis were always a stupid idea regardless of whether Uber and Lyft were created.

Give someone a ride, let them borrow your car, let them stay over at your house while they're on vacatin, have a one night stand with them. Nobody thinks we need government regulations for this stuff. What is it about commerce that scares us so much?

"Give someone a ride, let them borrow your car, let them stay over at your house while they're on vacatin, have a one night stand with them. Nobody thinks we need government regulations for this stuff. What is it about commerce that scares us so much?"

The things you described are usually just one off things, that a friend will occasionally do for another friend. Once you commercialize it, then it starts getting abused. Take AirBnB: You now have a lot of buildings becoming unofficial hotels. Not only are they driving out regular, long term tenants, but the people who are there did not sign up to live near a hotel.

I think what you're describing is a subset of the character of your neighborhood changing in a way you don't like. For example, your neighborhood becomes expensive, or gentrified, or crime filled or you don't like the noisy guy who moves in upstairs from the apartment you're living in. Or the deli you like downstairs closes and is replaced by a hair salon and you didn't sign up for that. These are problems that are part of life, you can't control everything outside of what you own. I wouldn't personally expect to legislate it any more than if my gf broke up with me because of Tinder or FB or something its just life.

> I wouldn't personally expect to legislate it any more than if my gf broke up with me because of Tinder or FB or something its just life

Some of us will do our best to elect reps who will legislate services you like or something its just life.

"You can't apply the same rules to these systems as regulation mechanisms are different."

Why not? From the perspective of society, they're doing the same thing. Thus the implementation detail of being centralized or not doesn't come in to play.

"we trust Uber's driver rating MORE than the fact that official taxi drivers are "pro" and comply with regulations"

Speak for yourself.

The massive success of uber/lyft/etc show that OP is speaking for far more people than him/herself.

Or maybe its the price difference?

It's an interesting question. I take taxis/ride-hail services almost exclusively when traveling on business (and not really all that often) so I pretty much do whatever is more convenient. I wonder what the overall behavior would be if Uber and Lyft were to ~ double their prices overnight.

I used Turo once, during a visit to SF. The owner didn't meet me (it's optional on their part), and the process of "checking out" the car didn't seem any easier than renting a car from Budget. It's an elaborate sequence of taking pictures and uploading them to the Turo app in the right order. The cost was not too different from Budget either.

I used Turo simply because the closest "traditional" rental car office that was open was many miles away; while the Turo car was parked close.

I haven't used Turo since. Usually when I need a car it's because I'm flying somewhere, and getting a rental car at the airport just does not seem difficult to me.

There's one actual great case for Turo: Pre-purchase test drive, especially for oddball stuff.

You can likely find a car very similar to what you're going to buy, and drive it for a weekend. Luxury car dealerships will do this (esp. when you go into very high pricepoints), but they take convincing. For a lot of people, it's a better way to find out that something isn't quite what you wanted, without having to deal with depreciation after the fact.

Though if you want to give a childhood dream a fair shake before actually plunking money down on one (and going through PPI, etc.) Turo is great for that. There's no shortage of high-end sports cars and "common" supercars on the platform, especially in large metro areas.

Rather ambivalent about this tbh. We've seen many times how the online marketplaces initially targeted at grassroots providers evolve into professional domains again. Ebay, Uber, AirBnB, in the end casuals are pushed out and you get fulltime sellers, drivers and purpose rental properties driving the market. Only this time most of the profit ends up with members of a one pool party somewhere in California.

They want to disrupt the market, well be ready to bust your asses this time.

If the established players promote regulation which make it harder for new entrants to gain a foothold, that's cartel-like behavior and it hurts consumers. In general, regulations should promote competition because competition results in better products and services.

The examples you list are all businesses that I wouldn't want to disappear. The problem with these businesses is that software-driven industries have monopoly characteristics, which among other things lead to the concentration of wealth you mention. Consumers would be better off if we had five Ebays or five Ubers or five AirBnBs, but for a variety of reasons this is currently unlikely--the weaponization of patent law, the high up front costs of developing new software, etc.

Patent reform is a relatively straightforward area where better regulations could promote competition within software-driven industries. A more controversial approach (at least in the US, but the EU had no problem with doing this to Microsoft) is compulsory licensing of intellectual property when monopolies have abused their position. If the ultimate goal is to reduce wealth concentration and ownership, we might also consider making it easier for firms to IPO again.

We do have 5 EBays and it sucks IMO. I have to search EBay, autotrader, craigslist(s), Amazon 3PM, AliExpress, BringATrailer, FChat/RennList, Etsy, Tindie, and others to get the whole market for whatever random thing I'm looking for.

For lodging, it's AirBnB, VRBO, TripAdvisor, Priceline, hotels.com, Expedia, trivago, and 15 others that I'm not thinking of, half of which are owned by one of the others.

Uber has Lyft and other smaller competitors as well.

Users go to where the vibrant market is; they aren't, in general, helped by having the market sharded for arbitrary reasons. Even back to the days of Trajan's Forum, local produce markets, or modern-day "Auto Mile"s, consumers seem to prefer the convenience of one place over many.

> If the established players promote regulation which make it harder for new entrants to gain a foothold, that's cartel-like behavior and it hurts consumers.

It's called level playing field and it's not catered to multinationals in particular. There is no shortage of independent car rentals and hotels around the world. In fact am writing this from a non-chain beach condo and there's a mom&pops car rental maybe 250 meters away. Somehow they are able to comply to a few simple regulations, it is a bit dramatic to paint comparatively huge centralized corporations as victims of oligopolies here.

> in the end casuals are pushed out and you get fulltime sellers, drivers and purpose rental properties driving the market.

Have casuals been pushed out of Uber? Maybe my market is weird, but I tend to talk to every Uber driver I have and I take a lot of them: I'd say less than 50% are full-time drivers.

Really? I don't recall meeting an Uber driver who didn't do it all the time.

I think GP's point is valid. To start with, it's beneficial and fair that lots of little people can rent out their cars for some extra change. But when it ends up being a loophole to sidestepping existing rules to make essentially the same service with fewer rules, it's worth paying extra attention to. Not saying it needs to be outlawed, just that it's not obvious what to do.

It'd be very easy to have legislation that regulates small-timers (only owns one or two cars, rents it out less than 30% of the time, etc.) differently from professional operators, even if they advertise on the same platform.

Some jurisdictions have started doing this for AirBnb.

we already have too much of this type of regulation which does just what you state, keeping small timers out to benefit the established interests. occupational licensing sounds beneficial to the public as a whole and at one time it was but once established businesses found they could use it to block competition its original focus was lost.

It really clobbers low income workers and fattens pockets of companies which "train" for licenses and the like. Nearly a third of all jobs are regulated as such and many are prohibited to former convicts which is yet another road block. You can end up spending more money gaining your license to braid hair than serve as an EMT.

I'm proposing the opposite: regulate big operators more heavily than small-time amateurs.

If you want to rent out a spare room in your own house a few weekends a year, the government probably doesn't need to be very involved in that. On the other hand, if you're a company that owns 50 condos and lists them all on Airbnb, you should be carrying insurance, you should be subject to inspection for bedbugs, etc.

Sure, I'm not disagreeing with the point as you state it. I was just surprised by the claim that casuals are pushed out.

Afer accounting for their costs, Uber drivers don't make much money. As a casual gig a lot of people with other sources of income have probably found it's not worth their time. If you have no other options, working 80 hours/week as an uber driver might make you enough to eeek out a living.

I'm not speculating from first principles as to what might be happening, I'm saying what I've seen from a fairly large sample over the years. Though again, it's limited to my market (SF).

My country has no Uber service, so I use it on foreign trips. Initially everyone seemed amateur, now it feels full of pro drivers. But of course could be market specifics, and I don't chat up with every driver too.

Depends on time of day. I tend to meet causa Uber drivers late nights and weekends. Day tend to be full time drivers. Quite a few are recent immigrants. At various stages of job searching. Full time? Yes. Professional? Definite no.

It seems like you're make a subjective value judgement on what 'professional' is. If they are making money, they are a professional.

No, you are confusing occupation with profession. Most of the drivers I have ridden with would not consider being a driver their profession. Some were retired accountants, others were freshly arrived immigrants saving up for school.

A UPS, longhaul or UberXL may consider driving this their profession. As for ridesharing very few were professionals.

Right, which would belie the notion that casuals are pushed out.

eBay, Uber, and AirBnB are all great. Much better experiences than what was available before.

Taxi company that isn't a taxi company. Hotel company that isn't a hotel company. And now, car rental company that isn't a car rental company. And, as always, all the regulations are somehow bad.

The PR person compares this to lead paint certification, but I'd argue that the bulk rented apartments need that too. Instead they're fighting sales tax on the rentals. Besides this, cars are far more dangerous to others when maintenance gets lax.

Few would claim that all regulations are bad. But regulations often age badly. Regulators and the companies they regulate are both motivated to freeze the state of the industry over time. So when new technologies like smartphones allow doing something better, the regulations often prohibit it (as they did with taxis.) Established players don't want change because change costs money, and regulators aren't motivated to make changes either.

What we see is that unregulated industries (say, dog-walking on demand) can quickly adopt the new technology, while regulated ones like car rental have trouble.

Car rental should be much better with smartphones. I should be able to get a car brought to the airport in front of baggage claim. The fact that I have to schlep my luggage on shuttle buses to a rental area is an artifact of a business model that no longer makes sense. But if we wait for the incumbents to do it, it could take any amount of time.

>The fact that I have to schlep my luggage on shuttle buses to a rental area is an artifact of a business model that no longer makes sense.

Well, it's also an artifact of the reality that the rental volume at major airports is such that the activity needs to be moved well away from baggage claim. Honestly, I don't find car rentals to be that big a deal. I have priority cards for a couple of companies so I basically take the bus/train, grab a car, and checkout at the gate. Admittedly, I don't usually have much luggage.

I should be able to get a car brought to the airport in front of baggage claim.

You can. It's called concierge rental car service or valet rental car service at those airports that offer it, and it tends to be extremely pricey. It's not offered for the masses because it would make the already horrific congestion at Arrivals even worse, which is the primary reason that the rental car area is usually a bit away from the airport itself.

The maintenance argument doesn't make sense to me. Yeah, it sure would be bad if all these cars which are already driving around constantly and represent the overwhelming majority of all vehicles & mileage weren't professionally maintained by a big corporation, there oughta be a law against that!

The maintenance argument is barely noticeable in statistics. If it were a noteworthy factor you'd likely see insurance companies offering discounts for passing some sort of inspection in states without an annual safety inspection.

You really have to start making bold claims about the validity of the data before mechanical failure is a meaningful portion of what causes car crashes.

Anecdotally the only people I know who have used Turo are young people - Turo doesn't have a you must be 25 or a young driver surcharge policy for driving if aged between 21 and 25, which is typically the case at a conventional car rental desk in the US.

Personally I would feel pretty uncomfortable if greeted by the private vehicle owner when picking up a rental (I know this doesn't apply to all vehicles on Turo) - people are often extremely attached to their personal vehicles in my experience. At least at the rental desk the staff could care less what I choose to use the rental for, or how I drive it.

> people are often extremely attached to their personal vehicles

And for good reason. Cars are expensive to maintain even when driven and cared for responsibly. No idea what would be considered a reasonable listing price on Turo, but to hand my keys over to a 21 year old stranger in town for a weekend vacation, I dunno... maybe I'd do it for >$100/day.

Fancier cars on turo do however have age restrictions. I was looking into renting a model s and it has 30 years as the min age

There have been many comments here in the past about how sticking a digital intermediary into a traditional business model doesn’t somehow magically absolve you of regulations on that business model.

This article doesn’t actually present any unique obligations on Turo (the rental car Airbnb). As far as this article presents, the legislation is to explicitly make clear that if Turo is going to work in the rental car space, they can’t just ignore regulatory burdens that all their competitors are subject to.

I see no problem here.

Do you also feel that Uber and Lyft should constrained from day 1 not to operate without following all the regulations for taxi services like a requirement to have a medallion and to only allow drivers who have undergone an extensive background check?

Do you also feel that Airbnb, if it is going to work in the room rental space, should be required to comply with all of the regulations for the hotel industry (including collecting of hotel tax, posting of room rates on a placard affixed to the door, and installation of better-than-consumer-grade fire suppression systems)?

It sounds good to say "innovators can do whatever they like but need to follow the same rules as everyone else". But perhaps the existing rules are specifically tuned to the existing business model and will not be rewritten to support another business model unless that business model has been proven in practice. Or perhaps the existing rules are just excessively restrictive.

I see your point, but I think it's fundamentally flawed: I think the very reason we can look at this and go, "it's just rental cars with an app" is because it's not all that innovative. Beyond that, these regulations exist for a reason, and if they're going to be argued against then it's on the part of the "innovator" to build a business model that distances them, in granular operational detail, sufficiently far from the old model to make those regulations irrelevant.

e.g., Do I also feel that if someone creates an airbnb for food production that they should still be required to comply with all the regulations of the food prep industry? Yes, I do. They're still putting food in people's mouths, and the bulk of the regulations exist to protect people who are eating strangers' food. IF their business model is so divorced from the old restaurant model that the risks the regulation addresses no longer exist, I'd be more sympathetic, but I've yet to see that be the case.

In this case, for instance: I'm interacting with you, the app, and buying a ride. You're selling me a ride. For the same reason we have food safety regs, you're required to make sure your fleet is safe and up-to-date. Why, precisely, would you be exempt from that just because you source your fleet differently than a traditional rental car company? There's nothing about the app/service that negates that concern. The business, in the relevant respect, is the same - so why should they get a free pass on the regs? Because they've chosen a different model for sourcing cars?

Fundamentally, no one is owed a business model. IF your business model is "same old business, peer sourced supplies, and an app" - that is to say, in most functional respects the same business that is already regulated - then yes, you should be subject to those regulations. The very fact that these business are so very easily slotted into existing regs is because they're so similar to existing businesses. AirBnB didn't have trouble with regs when it was actually people letting spare rooms; it ran into trouble with regs when a large percentage of their rooms came through single owners of multiple dwellings dedicated to airbnb. That is, when they became a hotel.

I dunno, you're sort of assuming that all regulations are equally important for safety, I think most people would agree some regulations are only there to protect existing businesses from competition. But all regulations have to be followed, so what do startups do about that?

When AirBnB and Uber started they ignored all the regulations except the ones they wanted.. and it wasn't that bad. It was just, do you trust that a random person will let you sleep in their house or give you a ride without having a bad experience. All the existing regulations that applied said "no, of course you need taxes to pay inspectors and check all these boxes to protect people", but it turned out... yeah, you could just let people do their thing and it would turn out ok and not cost that much.

Doing the same thing slightly differently and claiming the regulations don't apply is risky, but ultimately whether you win or not is if you can deliver better service for lower prices safely. If so, the public will back you and you'll eventually be allowed to operate but with some negotiated subset of regulations that will emphasize the safety parts (because the public likes those) and limit most of the anti-competitive stuff (because the public hates those parts). That's exactly what happened with Uber and AirBnb. There's really no other way to change regulations these days.

I think we need companies like that to come along and show just how badly entrenched businesses can regulate their way to being protected against competitors and capture higher prices.

If there's one thing I've learned from Uber and AirBnB, it's that if you say "less regulation for micro-businesses in Field X" the huge multinationals in Field X will declare they're not _actually_ in Field X, they're just brokers directing customers to the 5,000 micro-businesses that provide services.

Have you learned that you wish Uber and AirBNB were strangled by regulation before they got off the ground?

Have you learned that most major hotel chains actually operate like AirBnB, i.e., individual hotels are operated individually but marketed under the same brand?

When you understand how the hotel industry works, you suddenly realize that AirBnB is really no different from Hilton or Best Western after all.

I feel that's just hyperbole. Collecting hotel taxes, for instance, would not have affected AirBnB one bit.

Then lobby to change the rules. Don't ignore the rules just because you feel you're special.

Lol if it was up to you we'd still using candles to protect the waxing industry.

Or enforcing that every lightbulb has real wax included.

Turos method of peer to peer car trading cannot be subject to the exact same rules as rental cars its absurd. Can you imagine if you had to enforce every uber driver to buy a 100000 dollar medallion.

> Turos method of peer to peer car trading cannot be subject to the exact same rules as rental cars its absurd. Can you imagine if you had to enforce every uber driver to buy a 100000 dollar medallion.

That's an obviously nonsensical argument. The more relevant argument was when Uber was fighting the notion that it's drivers should have auto insurance that actually provides liability protection for it's passengers when they get hurt.

Rental cars aren't cabs, which is why Turo isn't as successful as Uber. There's no medallion problem -- a fairly robust competitive market exists, with 3-6 rental vendors at any significant airport and standalone outlets everywhere else. Pricing is driven by depreciation + overhead. Bigger customers are getting contract rates from companies like Enterprise for as little as $29/day. Hell, Home Depot will rent you a pickup truck for $19 in my area.

The closest thing to the medallion issue is the right of the airport to demand a piece of the action for commercial activty on their property. That's a different issue -- even companies that flout the law like ride-sharing companies give in to airport operator's power over activities that take place on their property. In my area, Uber cannot pick up fares at our airport, and Lyft agrees to pay the transaction fee.

First, attacking someone for an opinion with "Lol" is rarely a way to encourage civilized discussions.

Second, instead of presenting analogies to other industries, why not state what regulations you think are absurd in this instance?

Nope but Turo needs to be sued into oblivion as an intermediately if it does not enforce whatever is the local regulation on XYZ.

All arguments that "we are just a provider of a bazaar space" fall apart the moment Turo does anything other than sell a spot on their listing service - operator of a food court could claim ignorance that the stalls are used for selling oxy only if it does not market itself as "Come here to get your oxy!"

I was rooting for disruption for a while, but after signing up for one of the loyalty programs I mostly just don't care anymore. My major gripes have been fixed, I can just walk up and take a car at most airports and unless there's a major event going on the pricing is very cheap.

I can't imagine wanting to go through the hassle of something like Turo unless I was trying to rent an unusual car for a special occasion. The last thing I want to do after getting off a plane is jump through hoops.

Update: I should also add there are often promo codes available on the likes of Retail Me Not that can make things even cheaper. Combine with a loyalty program which results in frequent upgrades and it's a great combo. I recently drove a brand new BMW X5 for a week for something like $30 a day after fees.

> My major gripes have been fixed, I can just walk up and take a car at most airports

Maybe we have very different patterns of flying, but this has never been my experience. It's always exactly the opposite: there's a line of ten families at the rental desk, each person takes at least ten minutes (!) to process, and the desk has one, maybe two people, for a total of half an hour in line or more. It's so phenomenally aggravating once you've finally gotten off the plane and just want to get to your hotel that it has left me with no sympathy for these rental companies whatsoever.

Which I suppose is the real brilliance of both Uber and Turo: if you're going to disrupt an industry by breaking the law, pick a business that absolutely no one is going to go to bat for. Despite how brazenly illegal Uber was in many cases, nobody cared because the taxis were just that awful.

It's possible that things will turn out differently for Turo now that people are wise to Uber's game, but the rental companies would still do well to remember that one of the things that helps these illegal disruptors prosper is when people are so sick of the status quo that they happily turn a blind eye to the law-breaking. Make your business suck less, and then maybe people might actually stick up for you.

> It's always exactly the opposite: there's a line of ten families at the rental desk, each person takes at least ten minutes (!) to process, and the desk has one, maybe two people, for a total of half an hour in line or more.

That was me until I signed up for the loyalty program (it's free, like frequent flier programs). Now at most airports I just go right to the vehicle (they email the parking spot number) or special booth in the parking lot or choose any vehicle in a special lane. Not only do you not have to wait behind families, but you don't go through that whole pitch where they try and sell you insurance and gas.

Someone tell me what I'm missing.

From this article it seems that the appeal for renters is that it's a more friendly process to rent from Turo than e.g. Hertz. A renter doesn't care if the car is owned by average Joe or by Hertz.

So can't Hertz and others simply fight this by improving their renting process? What's stopping Hertz from coming up with an app and completely destroy Turo? They already have the cars, they already have the distribution, they already have the compliance. Now just get an app.

It is a lot more than that. I have spent last month doing quite a bit of sporadic rentals and it is a pain in the neck.

(a) pricing is not transparent what so ever. I can get estimated price but I cannot get the total out of the door price. It makes zero sense in 2018.

(b) i can never get a car that I am "ordering". I fail to understand why a Zipcar can do it, but neither Hertz nor Enterprise nor Budget can. If I'm getting an Tahoe, which is expensive which you claimed you have, I'm baffled why the barely coherent employee thinks that a minivan is a "similar vehicle".

(c) daily insurance scams - luckily it does not apply to me because $25/trip premium insurance via Amex is easy, automated and just pure awesome but oh my god people who do not know about it are just getting screwed.

(d) And finally... why is it that I still cannot search all the locations within a certain area for the cars and prices that I need? Why do I have to repeat the searches for the twenty Hertz in NYC when with a Zipcar or Maven i can just scroll through the map or get a list?

If rental car companies were to fix this 99% people like me won't be likely to use "peer-to-peer" because there's nothing worse than driving someone's non-standard, modified, coolant-gauge-may-not-actually-work car.

Can't agree more about (b). Last september around a long weekend here on the east coast of US, I had "booked" an SUV since I was planning a road trip with my extended family. In addition to booking it online, I had also called up the office a few days in advance to let them know that I will be picking up the car at 4 pm after my workday is done. When I reached there, I was offered a pickup truck and was told "cars are never guaranteed". I agreed to take any car that can take 5 people and even after that it took then 3 hours to arrange a mid-size sedan for me. What is the point of taking reservations if you cannot honor them? The model is seriously broken and in need of disruption.

If a car company guaranteed a specific vehicle, they'd probably have to charge a premium and have stricter cancellation policies (which most don't have at all now). With SUVs in particular, I find pricing is all over the map if you try to reserve one in advance and, as you say, it's not guaranteed. I find that I have the most luck just using National's Emerald Aisle which lets me pick the car I want when I get to the airport. But it's still not guaranteed--though I've always been able to get an SUV when I've wanted one.

I get the people cancel all the time and hence they need to account for it. But in this case I had specifically called them in advance that I will be there to pick up my car and they had confirmed with me that my reservation is good. They still couldn't come through after that.

I don't mind they holding on to my credit card when I make the reservation if by doing that they can guarantee a better quality of service.

It's fair to say that the majors (which are pretty much the only ones renting at airport locations) are optimized for the 95% use case. They work fine most of the time but, in my experience, are pretty much incapable of dealing with anything outside of the usual "system."

In addition to not being able to guarantee a specific vehicle--even with a deposit--I had an issue with Avis a few years back where they were utterly unable to extend a rental to bridge it to another reservation I had already made, i.e. they couldn't take two one week reservations with a week in between and turn it into a 3-week reservation.

Zipcar and Maven manage to do it just fine.

https://www.youtube.com/watch?v=4T2GmGSNvaM

:) Almost 30 years later they still don't know how to "hold" a reservation

Thanks for this. Could you explain (c)? I don't understand what you mean.

Regarding the rest, it sounds like they got used to offering a poor service because they don't have enough competition or something. You might have a point there, but for a competitor to take advantage of that they just need to execute better on those points. They don't really need to source their cars from average Joes...

I'm not saying that Hertz isn't shit, I'm just saying that I don't understand how where the cars are sourced from is a real differentiating point. EDIT: I just re-read your last line and it seems you agree.

The "waivers" for coverage that one needs to get not to get sodomized in an event of an accident require one to be someone very familiar with all kinds of statues or spending nearly $70-$100 a day to be able to cover a premium sedan or above ( did you know that Impala is a premium sedan? )

No, credit card automatic policies do not cover even top 10 issues that you would have in event of an accident - they at most cover loss of revenue provision and some of the damage to the vehicle you are renting.

The only reasonable insurance that you can get is Amex premium insurance which is $25/trip (not a day) and covers everything.

Edit: Over years I tried Citi, HSBC, BOA, Chase and even CapOne "premium insurances" - they all were garbage with a list of exclusions longer than most of TOS policies on shady websites.

I feel like your original phrasing is a little ambiguous. To say they are a scam sounds like they are fraudulent, but they are not (as you clearly understand), they are in all but a handful of cases a necessity.

Of course they are scams:

It is illegal to sell insurance by non-licensed sales people - see Zenefits. It is illegal to claim that something is insurance or describe it as insurance when it is not. If paperwork says it is "waiver" but someone who makes me sign for it says it is "insurance" they are committing a crime and if a company actively encourages such behavior the company is engaging in a criminal activity

All I'm saying is if anyone reads this and is one day standing at a rental station considering the liability waiver and remembers someone referring it to a scam, they might wholesale dismiss it. People do it all the time because there seems to be a widespread belief that credit cards cover everything.

Insurance, waiver, whatever, it will save your ass if you purchase it when you need it and one should seriously understand whether they need it or not. It's that value that makes me question whether one should call it a scam.

Rental car companies always try to sell you liability coverage for accidents and damage for about $25/day. Almost every major credit card already includes the coverage for free, so when you opt into the rental coverage, you're needlessly paying a significant premium for something you likely already have.

This is not true. _Most_ cards do _not_ cover at fault general liability, most cover the damage to the car and that's usually secondary coverage, which is to say if you have insurance already, you will have to utilize that first in case a claim is required.

If you fall asleep and drive a car into a house or hit a pedestrian, you better have to have some third party liability coverage. If you have car insurance already you probably have this coverage, but if you don't... you don't.

This is a pretty complicated topic and I've done some deep dives into it and found it's not as clear cut as most people seem to believe. What kind of card you have matters, whether you have insurance already matters and even with both of those you need to understand what exactly is covered by who and when. If you don't have insurance you should always get liability. If you don't have insurance and rent a lot you should call up Progressive or National and request a quote for non-owner liability coverage.

What one shouldn't do is go around telling people to waive all coverage and that rental car insurance is a scam.

Rental companies will also hit you for "loss of use" while their damaged car is being repaired. This will likely be claimed at $hundreds/day. Most personal auto insurance and even many credit card liability plans will not cover this. I have a State Farm Visa for the sole reason that if I rent a car using that card I am fully covered including for loss of use.

> Rental companies will also hit you for "loss of use" while their damaged car is being repaired. This will likely be claimed at $hundreds/day.

This is much more than the cost to the consumer of renting the car. How can they possibly defend it?

Thank you for the correction. Unfortunately I can't edit my original comment to highlight that anymore. I've certainly always rented whilst having primary coverage from my normal auto insurance and so the distinction wasn't especially important for me. That said (and again, I was incorrect in my first post), some/many credit cards /do/ offer primary insurance coverage for rentals, and anyone renting a car should definitely take the time to check before getting to the rental counter!

Not really. Credit card coverage is secondary insurance, which means that your automotive liability insurance is the primary. Some cards offer primary coverage, usually for a fee or with a fee-based credit card.

That's problematic if you don't have insurance, or if you are in a risk category where some accident or damage to a vehicle will result in policy cancellation or a rate hike with your personal insurance. Some personal policies have different limits or gotchas for incidents related to business travel as well.

The other replies to your question seem to focus on insurance coverage via credit cards.

If you have a standard auto policy for a vehicle at home, you should also check whether it covers rentals. A lot of policies will cover you while driving "non-owned" vehicles for personal use with the same coverage limits/deductibles as your own vehicle.

We have to live in the world we have. We should strangle car sharing in its cradle because even after decades of mediocre service a competitor could come along and complete doesn't sound like a sound strategy.

> We have to live in the world we have. We should strangle car sharing in its cradle because even after decades of mediocre service a competitor could come along and complete doesn't sound like a sound strategy.

I don't think sarcasm helps having a productive conversation.

Also, straw-man: I wasn't arguing we should strangle anything.

Hertz actually owns cars and has to follow the law. The "startup" methodology is to shift everything to schmuck who owns the car.

Presumably, if the car owners can rent the cars for less than Hertz, and Hertz has the buying power and scale to buy and maintain thousands of cars for less money than you or I, these individual car owners are either eating costs due their own ignorance, or failing to do things like maintain them properly or follow the relevant law.

Hertz does not own cars. One of gazillion of Hertz affiliated companies owns cars that Hertz markets and rents to customers.

The marketing and rental process is stuck in the early nineties.

Hertz operates both Hertz-owned facilities (usually airport facilities) and franchised facilities (usually neighborhood facilities).

Hertz actually owns its cars, at least at its Hertz-owned facilities. http://ir.hertz.com/2014-11-14-Hertz-Announces-New-U-S-Renta...

Pop quiz:

which one do you think is hertz in NYS?

HERTZ LOCAL EDITION CORP.

HERTZ LOCAL EDITION TRANSPORTING, INC.

HERTZ MANAGEMENT & EQUITIES CORP.

HERTZ MARKETING, INC.

HERTZ NY LLC

HERTZ REALTY INC.

HERTZ SYSTEM, INC.

HERTZ TECHNOLOGIES, INC.

HERTZ TECHNOLOGY (DELAWARE)

HERTZ TRANSPORTING, INC.

HERTZ USA INC

HERTZ VAN LINES INC.

HERTZ VEHICLE FINANCING LLC

HERTZ VEHICLES LLC

Companies using different legal entities for risk or tax purposes is common in any area of business with lots of tangible assets. Whatever the Hertz holding company is, it controls everything. There's no meaningful comparison to a startup with random people owning title to cars.

Same thing when you walk into a CVS. "CVS Elm Street, LLC" isn't meaningfully distinguishable from CVS/Caremark, the parent.

They do this for liability purposes, not for tax purposes so it is exactly the same. The goal is to separate the revenue obtained from renting cars from the cars that are being rented so in event of a lawsuit the biggest assets (cars) are protected.

> Same thing when you walk into a CVS. "CVS Elm Street, LLC" isn't meaningfully distinguishable from CVS/Caremark, the parent.

Very very very different. What you are describing here is done for the tax purposes to segregate revenues subjected to different tax rules to guarantee that BlahTown which has one CVS in it and one CVS right outside of it cannot claim CVS needs to pay 1% on the sales done from a CVS outside of BlahTown.

Well, you just said it yourself, the average user doesn't see a difference. Turo and Hertz are providing the same service. Hence, Turo should be beholden to the same regulations as Hertz.

I mean, this just seems like common sense.

I imagine at airports Hertz and the like have quite a lot of overhead for a rental office, fees to work from the airport and the like. It would be hard for Hertz to get rid of that.

Having a commercial pickup/dropoff of cars occur where people stop to pick up grandma is certainly something airports can’t allow while at the same time charging the rental car companies big money to operate from the airport.

While very hard to address, it shouldn’t be harder to address than it is to address the problem of unlicensed taxis at airport arrival. And if the example from the article involved the person renting the car having to meet the renter at a McDonalds parking 5km from the airport, it wouldn’t sound as attractive.

Sure, that's true. The way I think of it is that the rental office cost is their cost of customer acquisition.

So the real advantage is that once you get an app install the first time you don't have to keep paying for new customers.

Which brings me back, shouldn't an app be something that Hertz should be working on in addition to everything else they've already done?

But the airport is also where most of the customers are.

Having rented a number of cars recently I can attest that this is an industry that is in major need of disruption. Renting a car today at any car rental company I know of is phenomenally inefficient:

1. Long rental lines at airports. 2. Asking for information that could be provided ahead of time via apps. 3. Having to make your way to the car rental facility.

What I would like and I would be willing to pay a premium for is order the car of my choice via an app. Have said car delivered to my location by a driver that then takes Lyft/Uber back to headquarters. Also it seems like the car rental companies could benefit from economies of scale by having a small number of large lots instead of numerous little lots peppered throughout a geographic area. If this existed, I would use it all the time as I only need occasional use of a car.

If you aren't pre-registered on the rental car company's website (give them a DL # and a credit card in advance), you're missing out. Most of my car rental experiences at larger locations have gone pretty painlessly like this:

1. Walk straight past large slow line up people at front desk

2. Show my driver's license to someone at the fast pickup counter

3. Get keys (may take an extra 30 seconds if I ask for an upgrade)

4. Leave

Some rental car places leave the keys in the car, so you can check your email to go straight to whichever car is yours or just grab any one that's available

Sign up for the frequent renter program and it fixes all of these problems. When I rent with Budget with their FasTracks program, I either just pick the car I want off the lot and they bill appropriately when I leave the lot, or if I've chosen my vehicle ahead of time, I check a screen that tells me what spot to go to to find it and drive away. No lines, no giving them information at a ticket counter, they have all of it already.

Check out SilverCar. They are mostly app based.

SilverCar sounds promising, but from my research you still have to travel somewhere to get the car. I want the car to come to me. :-)

SilverCar is amazing. Traditional rental agencies look like garbage in comparison. SilverCar also has shuttles at most major airports so you don't have to go far.

You might be looking for Skurt. Although now that I Google them, it appears they've either re-branded as or been acquired by Fair.

I have mixed feelings about this. Uber is a horrible company but they created real competition for a lazy industry that sorely needed some.

Turo is doing the same. When I wanted to rent a Tesla for a few days Turo was the only viable option. The majors all wanted around $1000/day; I found one on Turo for a little over $100 and the free fuel brought that down to around $80. It was a delightful experience.

The majors are really in the business of mass-market utilitarian rental. And they mostly do a competent job of that. To the degree they offer anything outside that framework, they do tend to charge a huge premium if they offer the option at all. (For example, good luck renting a 4WD Jeep.)

I would question the wisdom of someone renting their Tesla out like this but that's their decision.

From what I've noticed here in Los Angeles, Turo is exploiting the greymarket of wildcat car dealers. There are lots of people here that own 10+ late model economy cars at any one time and there are areas where you'll see 5-6 cars on the street with For Sale signs.

A friend of mine who's car was totaled used Turo for a month or so until she bought the car from the guy.

This is the first thing that occurred to me after browsing the cars available in my area. Nearly all of them look like they are listed by boutique / independent used car dealers (like the one I drive by every day: http://imgur.com/J3yi9qL.png ).

This is interesting given that...

Title 13 California Code of Regulations, section 260.02 states: (B) Former taxicabs, rental vehicles, publicly owned vehicles, insurance salvage vehicles and revived salvage vehicles shall be clearly identified as such if the previous status is known to the seller.

If the used car lot owner is renting-out his cars on Turo, it seems like they are required to disclosed this to potential buyers. I highly doubt this is happening.

Just like Airbnb is a hotel business, Uber is a taxi business (meaning a ride-for-hire business and nothing else) having a car rental business is having a car rental business regardless of whether the cars are “shared” or whether there is an app involved.

And just like Uber has to follow any regulations surrounding rides for hire (regarding taxes, insurance, accessibility, right to deny service, ...), so must this company with regulations surrounding car rental.

I don’t see how making sure startups don’t get away with some loophole is a “legislative war”. It’s no different from cities where Hotels say AirBnb should pay hotel taxes and have hotel level fire security.

If the regulations surrounding the established market is too rigid then address that. But don’t “revolutionize” markets by using some loophole and an app.

Your examples aren't helping to prove your point though. It makes zero sense to require single-family houses or duplexes to have hotel level security. Requiring a homeowner to retrofit sprinklers and fire doors, or provide 24-hour video surveillance or an onsite security guard?

A hotel is fundamentally different sort of facility than my house. Insisting they be regulated the same is pure rent-seeking on the part of the hotel industry.

If you rent it out you are a hotel. Or, possibly, a landlord (which comes with different but quite burdensome regulations in most countries).

What a lot of these startups do is expose areas of markets that may be too rigidly regulated. Perhaps the reasonable level of regulation for Airbnb renting is just working smoke detectors, a basic escape plan map and good insurance? Perhaps most of the remaining hotel regulations could be lifted? It’s very likely that the advent of “not quite hotels” and “not quite taxi” calls for new regulation. But what the established players “war” against is newcomers completely dodging regulation on account of being “not a hotel”, “not a landlord” or “not a taxi”.

> "If you rent it out you are a hotel"

This kind of semantic conflation isn't helpful. A house, rented or not, has almost nothing in common with a typical hotel with dozens of rooms and unrelated guests, complicated egress paths, commercial kitchens, industrial services and controls, etc.

It absolutely makes sense to require hotels to have automatic fire suppression systems, heavy fire doors in every room, video surveillance, or 24-hour guards. And then there's ADA, a whole other conversation.

Hotels aren't pushing for hotel regs to be applied to houses out of some even-handed desire to prevent loopholes. The AH&LA is a cartel trying to have their competition outlawed.

> Hotels aren't pushing for hotel regs to be applied to houses out of some even-handed desire to prevent loopholes. The AH&LA is a cartel trying to have their competition outlawed.

Sure, but the opposite is equally true. AirBNB, Uber, and others aren't blatantly lying about their core business out of some even-handed desire to prevent loopholes. They're doing it exclusively to illegally escape regulation -- regulations their competitors are all bound to by law. They're trying to replace a cartel with their cartel.

The question to the public at large is: would you rather have an existing cartel that is subject to regulation, or a new cartel that also believes it is above the law.

You make it sound like the regulations somehow bind and constrain the existing cartels. Another point of view is that the regulations are the mechanism by which the cartels keep competitors out.

I'd rather have "above the law" cartels than "makes the law" cartels.

When I say “hotel” I didn’t mean some particular category of operation - I meant “commercially by-the-night rented rooms”. Such as a 2-room inn above an English pub, or any 1-room B&B on the French countryside.

Obviously the regulations that should apply for a person renting out a single apartment on AirBnB shouldn’t be more burdensome than the very simplest Inn/B&B.

You've staked out a reasonable position here. But the Hoteliers' cartel doesn't share your position. In public they're careful to say things such as they only want the Hotel Fire Safety Act to be applied evenly, but in practice they're all too happy to push laws and regs design to kill all short term rentals by enforcing maximal regs on them. Take Tennessee, for example, where sympathetic authorities have declared that all short term rentals must be equipped with fire sprinklers [https://www.memphisdailynews.com/news/2015/jan/3/cities-acro...]. There's likely a lot more of this nonsense to come.

Almost nothing in this article seems unreasonable. If I give you money for your goods for X amount of time, that is renting. You are engaged in commerce and fall under the laws and regulations of commerce. Not sure why it’s being called a war. None of the legislators have called for an outright ban.

It is reasonable insofar as the regulations are not set-up to protect the incumbents. With a little lee-way for regulations not being that needed for the new business model.

However, it seems clear to me that requiring turo renters to enter the VIN of their car to check for recalls is just reasonable regulation. The same goes for having the cars be inspected yearly. Now, any laws for the actual pick-up process are a different beast, but non of those are mentioned in the article.

Note that the example of turo wanting to make it illegal for car-owners to register cars with a recall seems like they are just trying to push these costs away. In the end, it is the responsibility of the rental company that their cars are safe. If the company deems signed statements from car owners sufficient due-diligence, that is their choice. If they do not trust such statements, the solution is to demand more in your due-diligence, not to make it illegal to 'lie' on these statements. That presumes that turo already has it in their TOS for car-owners that cars are required to be un-recalled. If not, adding that should be their first step. Immediately going for legislation when you can just amend contracts is a massive over-reach.

What really happens here is foreign companies monopolizing local black/grey markets. Unlicensed taxis or rental properties were a thing before the internet. Just that municipalities know how to deal with them; they went in stupor when global billion dollar companies started doing that too, giving it a whiff of legality but not really. Governments are notoriously slow to react to changes in ecosystem, and in this case it's other businesses pushing back, in a way that should make any free market advocate proud.

I think enforcing by legislative means the profit-sharing system traditional players have with the airports is completely unreasonable. They go out as far as to call it a safety issue.

Yes, the playing field is not level, but that's what competition means: the sharing companies have found a way to go around the onerous taxes imposed by airports and there is almost nothing the airport can do to stop a private individual drop a car in it's short term parking lot for another individual. There's no safety or congestion issue, it's the entire point of the short time parking spaces.

There's no obvious reason why airports charging people who use the airport as a transportation hub is unreasonable or onerous by definition.

For a completely private airport that builds its own road and transit infrastructure, sure. Most real airports have massive public investment and infrastructure and enjoy a strong local monopoly - with the specific purpose of acting like a public transportation hub.

Therefore, any charge that moves from services provided, on a needs basis, to an indiscriminate tax, on a per person basis, can be seen as onerous in light of the public investment.

But if there's a precedent that people landing in the airport and renting cars pay a tax why should some companies be able to avoid it and not others. This argument is nonsensical.

Maybe a sane government would simply decide what level of income/property tax is required to provide whatever level of service rather than passing 192 other individual taxes such that a given consumer doesn't even know the exact figure they paid this year without an accountant and a spreadsheet.

Because the new players don't need the services airports provide. Which turns into a tax or a monopoly rent, there is a long a list of such "precedents" that the market and regulators shut down.

If they don't need the service the airport provides they can meet people arriving on planes somewhere that's not an airport. Otherwise it seems to me that they need the service the airport provides.

The service the airport provides is the fact that lots of people are there. In other news if I meet you in starbucks to buy a laptop from craigslist they aren't getting a cut.

If they meet the car at Walmart do we expect the walton family to get a cut? If they drop the car off at their home do we expect the HOA to get a cut?

At some point we could acknowledge that the airport isn't a party to the transaction.

> In other news if I meet you in starbucks to buy a laptop from craigslist they aren't getting a cut.

Starbucks has decided that a fairly open access policy for non-customers conducting other business is a net positive for their business. Many businesses have different policies because they have different actual or perceived business dynamics. Also note that most Starbucks do place limits on this, as people who mistake them for zero-cost unlimited co-working space tend to discover.

Yes, if you set up a commercial for-profit business selling things, or delivering rental cars, in a Starbucks or Walmart parking lot they would certainly expect a cut, or otherwise stop you from doing it. This concept is spectacularly non confusing.

Meanwhile in reality people seem to be dealing drugs regularly in walmart parking lots and I bought my Craigslist laptop in a coffee shop. I didn't give the coffee shop a cut and I'm pretty sure the shady characters meeting in the walmart parking lot aren't giving the waltons a cut.

> > But if there's a precedent that people landing in the airport and renting cars pay a tax

> Which turns into a tax

A tax turns into a tax? Tell me more about this theory...

There are to reasons airports need to charge rental companies if we ignore 'they are abusing their local monopoly'.

The first is congestion due to the pick-up process. Clearly, this affects both the new players and the old players. The second reason is land-use by the parking lots in which available cars are stored. This doesn't affect the new players. Now, airports might be charging for both, and simply be afraid that the cash-cow of charging reasonably for the land-use of parking lots is going to disappear.

For a real answer, you'd need to actually compare the difference in cost between congestion and land-use.

Frequently, the rental car facilities are some distance from the airport, and the airport is just gatekeeping a bus service to the off-site rental facility. I don't think that land that facility lies on is a very scarce resource.

Having a driver meet you with a car at the terminal is a much better experience IMO, whether it's a taxi, a Lyft, or a rental. If the pickup area is too congested, the airport should address that problem directly with a toll to access that area. A targeted ban that happens to help incumbents in a particular industry doesn't seem like the best way.

I don't understand the appeal of Turo. I hate car rentals, but can't believe renting from a random to be a superior experience to them.

SilverCar on the other hand, is amazing. They just need better accessibility at airports.

Although car rental user experience is not perfect, it gets the job done well enough. Not every type of business in the world needs VC funding, react.js SPA, chatbot and "sharing economy".

Ctrl-F "insurance" - no results. If I use a startup to lend my car to someone, and they're involved in an accident, whose insurance covers it?

The reason I rent from Enterprise is that I don't have to worry about insurance or breakdowns. My financial loss is set at £100 maximum and the cars are nearly always brand new so unlikely to breakdown.

To start using some unregulated operation like 'AirBnB for cars' I would need do be paying virtually nothing as an incentive. And, from the examples I've seen so far, this is no way the case.

I must be super unlucky. I find their maintenance well below par. They're the only company that attempts to rent me cars/vans with: oil service lights, bald tires, cracked windscreens. This isn't limited to a single branch either.

Also £100 is not their standard excess, so you're paying for the reduced liability. (Also, they like to tell you every time in the hard sell that the £1,000 excess is for each and every incident and the full amount will be taken immediately... ?! Not sure how true that is)

However, they have the most branches in the UK of any rental company, so they're often extremely convenient.

Never had the hard sell, tbh, but I find the standard £1,000 excess a bit too much of a risk. Having rented a dozen or so times my only damage, thus far, has been a scratch on the door which, likely, only cost £100 to fix?

In theory then, I'd be better off taking the bigger risk but there is also Murphy's law to consider.

Maybe I have been lucky but I've found them to be much better than the alternatives and a lot more laid back about stuff like fuel levels and return times.

There are other companies (like https://www.carhireexcess.co.uk/) who will insure against that £1000 excess for very little money.

Why on earth would you expect something for nothing? Presumably the policy you carry is your own business and will become theirs in case of an accident.

Because, why should I pay more or less the same to drive an older, less reliable car with the added worry that I could be liable for expensive repairs?

I don't drive much these days so I don't want the hassle of having a transferable insurance policy.

What I'm really saying is I'm happy with renting from an established company and it's going to take more than a small cost saving to tempt me away.

I'm not sure why you expect WaPo to go into the weeds like this. If you want to learn about Turo's insurance policy, go to Turo's website. It is quite easy to find: https://turo.com/insurance

The answer to your question depends on where you are.

From Getaround, though I imagine Turo works similarly:

> Our insurance program provides auto insurance to cover renters and vehicles that meet our Eligibility Requirements. Coverage applies for the duration of each rental, from start to finish, and includes liability, collision and comprehensive (e.g., fire, auto theft, vandalism) coverage.

https://www.getaround.com/terms/insurance

When playing poker, if you don’t know who the sucker at the table is, it’s you

Ignoring the irrelevance of this comment to the parent, this is a bizarre aphorism.

Why is it so hard to believe that the players at a poker table couldn't be evenly matched?

How is it irrelevant?

If you don't know who's insurance covers it and no-one will tell you, it's safe to assume that you are the one who will be liable.

How feasible is it that companies like Turo can route around this issue by offering things other than cars to rent/lease from their owners? Like, if that F150 came with a bunch of shovels for schlepping soil, for example ... or if the Tesla came with a tour guide in the passenger seat?

Wouldn't that make the whole "a duck by any other name" more of a "well, its a platypus really" kind of issue?

Or are there regulations which preclude this kind of bundling of services?

Taking on a CARtel will never be an easy process.

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