SALT LAKE CITY — Two competing proposals, each looking to apply regulations to companies that offer peer-to-peer car rental/sharing services in Utah, appear to be stalled out and unlikely to advance before the end of the Utah legislative session.
A representative from Turo, the company that has been at the center of conversations about the new regulations, told the Deseret News they're underdogs embroiled in a battle against well-established, and well-financed, legacy car rental companies that are looking to protect their territory.
"We see this as a David versus Goliath battle," said Lou Bertuca, Turo's director of government relations. "(Traditional rental car companies) want to use their extensive political connections. It's really about them wanting to eliminate consumer choice and take away a tool that is economically important."
For those not familiar with the service, Turo follows a similar peer-to-peer business model that allows homeowners to rent their spaces out through the Airbnb network or drivers to transport riders in their own cars through networks run by companies like Lyft or Uber. Turo connects vehicle owners who want to make their cars or trucks available for rent via an app-based platform to those in need of a borrowed vehicle.
A Turo spokeswoman said the company has over 2,300 hosts in Utah, and each is earning on average around $250 per month. Nationally, Turo hosts, who rent out their vehicles through the company's network, earn about $625 each month.
Rep. Kim Coleman, R-West Jordan, said she assembled HB354with a group of stakeholders including Turo, the state's largest traditional car rental operator, Enterprise and others, and told a legislative committee on Monday that moving the proposal forward would be critical to all involved.
"We do have a situation that we believe that the parties that have been at the table really need an immediate resolution," Coleman said. "I’m really pleased at how far the parties have come to agree to something. This would reference a national agreement as well as a local agreement to allow these companies to start operating without the threats they’ve been operating under."
Coleman's bill, however, was rejected by the Senate Transportation, Public Utilities, Energy and Technology Standing Committee on a 1-5 vote. Later on Monday, Sen. Curt Bramble, R-Provo, announced on the floor of the Senate he was circling his bill, SB190, and abandoning any attempts to get it approved this session.
"We tried very diligently to bring these disparate business models and taxpayers together to a point where they could agree," Bramble said. "And it was not possible."
Both Bramble and Coleman anticipate the discussion will be picked up during interim meetings and potentially addressed next session.
At issue is arriving at an equitable assessment of taxes and fees that both traditional rental car operators and new, networked operators find fair and reasonable. Coleman noted that traditional operators already enjoy expansive, taxpayer subsidized tax benefits that include an exemption from paying sales tax on the vehicles they purchase, as well as other perks, that amount to around $30 million every year.
The legacy car rental companies say everyone should be treated in a similar fashion and would like to see Turo and others of its ilk on the hook, as they are, for the 9.5 percent tax assessed via the Tourism, Recreation and Convention Facilities Tax and other fees.
Lacking a weigh-in from lawmakers, efforts between the Salt Lake City International Airport and Turo to negotiate a workable deal for the company to operate on airport property may also be shunted to a holding pattern.
Airport Executive Director Bill Wyatt said that, so far, the way Turo has entered the market in Utah is not unlike the path that was traveled when Lyft and Uber, so-called transportation network companies, appeared on the scene and began disrupting another industry that had remained relatively unchanged for decades.
"In the case of the (transportation network companies) the path was not dissimilar," Wyatt said. "They came in and began operating in cities without any kind of permitting or anything at all.
"In time, their business models matured … and they began to find ways to work with various jurisdictions in a manner that was consistent with regulation."
Wyatt said that the failure of the legislature to adopt a definition of what Turo and similar companies are, from a regulatory standpoint, leaves the airport in a difficult position as far as hammering out any kind of agreement with these types of companies.
"Here is the key … the Legislature needs to define the peer-to-peer car sharing model," Wyatt said. "For us to cut a separate deal that would be more or less renumerative, puts us at risk with our existing customer base."
Wyatt noted dozens of rental car agencies operate, under current regulations, at the airport, thought not all have a physical presence on airport property. Collectively, the companies generate about $40 million in revenues for the airport.
Until some version of an operating agreement can be established, Turo hosts can be cited for performing transactions on airport property, like delivering vehicles to renters, and fines for infractions can be as much as $500. Last week, the Salt Lake City Council changed the citations from criminal to civil infractions.1 comment on this story
An Enterprise representative discounted Turo's depiction of itself as "David," noting Turo has millions in venture backing and is likely already one of the bigger rental services in the country. He also said his company was looking forward to continuing to participate in the process of crafting a Utah legislative solution.
"We welcome the opportunity to continue to discuss and develop this legislation in the future," said Ray Wagner, Enterprise's senior vice president for government and public affairs. "It’s important for all consumers and the whole industry of peer-to-peer as well as the traditional rental car companies. We look forward to seeing fair policy for taxation and collection of other fees as they apply to all car rental companies."