America's Biggest Rental Car Company Is Lobbying to Drive Away Competitors.

Author:Boehm, Eric
 
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THE FIRST TIME New Hampshire State Rep. Sherman Packard (R-Rockingham) heard of the car-sharing startup Turo, it was from a lobbyist. Enterprise Rent-A-Car, Packard says, has a "huge footprint in my community. So they called me up and said, 'Hey, let's be fair about this.'"

To the Enterprise lobbyists, being fair meant forcing Turo--which is basically Airbnb, but for your car--to pay a 9 percent tax, the same one the state charges on hotel rooms, meals, and other tourist expenses, including rental cars. (New Hampshire has no general sales tax.)

The appeal to fairness worked. In January, Packard introduced a bill in the state legislature that would tax and regulate businesses like Turo as if they were rental car companies. Enterprise and its lobbyists had won.

That may seem like a routine dispute between a state government and a disruptive new technology that doesn't easily fit in existing boxes for tax and regulatory purposes. But Packard's bill is just one small part of a national effort by traditional rental car companies to use their political clout against a newcomer that threatens the old business model.

It's a fight that's still happening mostly behind the scenes--at statehouses, in courthouses, and within airport authorities. But it could explode into the mainstream as the peer-to-peer rental model expands beyond Turo and its immediate competitors (see: Maven, Getaround). And at the center of the effort to stunt the competition is the same company that first reached out to Packard: Enterprise Rent-A-Car.

Emails obtained by Reason via open records requests show how lobbyists for Enterprise helped shape public policy at a major airport near Washington, D.C., by calling upon existing relationships with airport officials, state lawmakers, and even Maryland's Secretary of Transportation. The emails reveal both how thoroughly Enterprise and its lobbyists are connected in local politics and how aggressively the rental giant has sought to use its accumulated political muscle to crush an upstart.

TURO'S FIGHT WITH Enterprise has been most visible in San Francisco, where the company has battled the city--and, by proxy, traditional rental car companies--over airport fees.

Those fees constitute 11.5 percent of the annual operating budget at San Francisco International Airport (SFO), according to a lawsuit filed against Turo last year by the city. For several years, Turo held a permit to operate as an "off-airport" rental car company, which required the payment of an $18 fee for every rental contract executed and a 10 percent tax on all rentals. A Turo user who shared her car for $500 and exchanged the keys at SFO would have to pay the airport $68. By comparison, Uber and Lyft pay a mere $3.80 fee for every drop-off or pick-up.

The permit also mandated that Turo users, like all on- and off-airport rental car services, only do business at the airport's rental car center, which requires travelers to leave the main terminal and take a free light rail train. The cost of the train is covered by the rental car fees.

Michelle Peacock, the company's director of government relations, says Turo tried for years to renegotiate the terms of its contract to allow for curbside drop-off and pick-up, which would give the service a leg up over traditional rental car companies. It was never allowed to do so.

In August 2017, Turo allowed its permit with the airport to lapse and went ahead with offering direct drop-off and pickup from the main terminal. That hasn't gone over well...

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