It is not often that a small, independent, locally-owned rental agency finds itself sitting before a legislative committee on Utah’s Capitol Hill, but that is where we have found ourselves recently.
The main issue is Turo, a new entrant in Utah’s vehicle rental market. Turo and others claim to be the car rental version of Airbnb, also called “peer-to-peer.” The concept is supposedly that regular folks use an online app to rent their personal cars to other folks just in town for a few days. The reality is more complicated.
I’ve been in business as a car rental agency, independent and locally owned, since 1993. We are small but successful. We specialize in SUVs, trucks and vans. We are a true “little guy,” building a business even without major Silicon Valley funding.
The problem is that Turo believes it should be treated differently than everybody else. They claim they are “disruptive” and new, mimicking Uber and other app-based companies. They believe that makes them special, and that’s where things get sticky. Those of us who deal with onerous airport regulations and burdensome state and local taxes don’t see them as any more special than any of us. We are working on compromise legislation to deal with these issues.
About half of Rugged Rental’s customers come through the airport, so we run a free shuttle service to our location. The airport treats us badly, including charging me some of the same fees as it does agencies located on airport. In 2018, we paid nearly $80,000 in airport fees.
Maybe we are missing something, but we in the vehicle rental business don’t understand why new companies like Turo should get special tax treatment while the rest of us continue to pay the bills.
That said, go ahead and give Turo a huge break on taxes and waive or reduce the fees they pay at the airport … as long as we get the same deal. You want to totally eliminate taxes and fees for Turo? Great, eliminate them for us, as well. A comparison of my company with Turo shows a distinction without a difference. We both rent cars to the public in order to make a profit. We should be treated equally.
Over the past 30 years, Utah’s state and local governments have loaded an incredible tax burden onto the rental car industry. Add in confiscatory airport fees, and the total revenue to various levels of government are staggering.
This situation has made me question my own business model. Maybe I should sidestep taxes and fees by changing what I call my company and using different terminology. Car rental companies at the airport pay almost 40 cents on the dollar to the state, county and city. Turo and others want to skate on the taxes and fees we all pay.
This is our appeal to the Legislature: Please don’t try to influence market decisions by treating one group of competitors — who look and sound different, but as they say, “still swim and quack like a duck” — better than you treat us. A “business model” that depends on operating tax-free is not really a business model, so much as a tax avoidance scheme.6 comments on this story
Something is wrong when you have two groups of companies in the same industry, and for whatever reason, the government decides to treat one group differently than the other. That means one group gets preference. And that is when the government gets into the business of picking winners and losers, putting its thumb on the scale.
I think most of us know deep down that is not the right way to do things. Equalize the burden between our companies and theirs, one way or the other. Let the market decide between us, fair and square.