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Twin Cities airport makes way for peer-to-peer car sharing service

26December 2021

Earlier this month, Louis Lidji steered his gleaming late-model Hyundai Sonata to a marked spot deep within the labyrinth of the Red parking ramp at the Minneapolis-St. Paul International Airport.

Lidji parked his car, snapped a few photos of its interior and exterior with his phone, locked the doors and caught a ride back to his home in Eagan. A few hours later, someone he didn’t know arrived at MSP, picked up the Sonata after Lidji, unlocked it remotely using his phone and drove it off the lot — just like any other car rental.

But unlike the usual drill with Hertz, Budget or Enterprise, this is a new way of leasing a car through a service called Turo that MSP officials are embracing — at least for now.

Often called the “Airbnb of car rentals,” Turo is a peer-to-peer car-sharing service that connects owners of personal vehicles to customers through its app or website. San Francisco-based Turo and other car-sharing services such as Getaround, Maven and HyreCar are part of a sharing economy that has exploded over the past two decades.

Airports would seem a natural fit for this emerging service, but many across the country have been slow, or even downright resistant, to welcome Turo.

Lidji, a mortgage banker who works from home, figured he could make money by using the Turo platform to rent his 2020 Sonata, which would otherwise have sat in his garage.

“It’s been really great,” Lidji said. “The car is not going to get used; I don’t need it to get to work. Financially, [Turo rentals] have pretty much paid for the car since I started.”

Founded in 2010, Turo is now available in 5,500 cities in the United States, Canada and United Kingdom, with a “community” of 14 million users and hosts. Airports serve as popular rental portals, but aren’t the only location where vehicle handoffs occur.

Officials at MSP say they knew Turo had been quietly operating at the airport since 2017 on an ad hoc basis, but without paying any concession or access fees like those forked over by traditional rental car companies.

At the time, a lawyer from the Metropolitan Airports Commission (MAC), which operates MSP, sent a letter to Turo Chief Executive Officer Andre Haddad calling for the company to “cease and desist” operations unless it paid appropriate fees and submitted reports regarding its operations. The missive threatened legal action if Turo failed to comply.

By the spring of 2020, the commission asked MAC staff to investigate Turo’s presence at MSP, and an audit commenced last August. MAC officials discovered an average of 32 Turo vehicles were available to rent at MSP each day, with 106 vehicle owners advertising their rental services from the airport. Prices ranged from $30 to $499 a day, with vehicles delivered onsite or through an in-person pickup.

While some airport operators like the MAC have reached agreements with Turo, others have rejected the idea. At Boston’s Logan Airport and the Los Angeles International Airport, the short history of peer-to-peer rentals has included lawsuits filed by both Turo and airports and resulted in Turo bans.

Last fall, the MAC formalized the relationship with Turo by launching a one-year pilot program that leases five spots for vehicle pick-ups on Level 6 of the Red Ramp in Terminal 1.

Turo also has access to the east upper-level roadway at Terminal 1 — the same pick-up zone for Uber and Lyft — for in-person car handoffs. And Turo must pay 10% of gross receipts as a “privilege fee” and submit monthly statements documenting the receipts.

The pilot program will allow the MAC to get a better understanding of how peer-to-peer rentals work, especially if competitors want to set up shop as well.

In a report, MAC officials note that peer-to-peer car rentals are a “disruptor” to the long-standing car-rental industry the same way ride-sharing firms Uber and Lyft upended the taxicab business. When the MAC adopted a legal framework for Uber and Lyft in 2016, it was after many months of often-emotional debate that pitted drivers for ride-sharing services against taxi drivers and operators.

Haddad of Turo said in a statement he was “delighted that MSP officials have taken an innovative step in recognizing the benefits of peer-to-peer car sharing, including meeting consumer demand in Minnesota. Peer-to-peer car sharing not only provides travelers with better options for booking a car, but also gives Minnesotans an opportunity to find financial freedom by hosting their own vehicle on the platform.”

But car-sharing has its critics. The American Car Rental Association (ACRA), a trade association based in Long Lake, N.Y., said companies like Turo should comply with state and federal laws governing insurance, liability, recalls, consumer protection, taxes and fees for operating at airports.

“They’re saying ‘We’re different from car rental companies,'” said ACRA spokesman Greg Scott. “But if you walk like a duck, then you’re a duck.”

The agreement at MSP comes as the COVID-19 pandemic has upended the traditional rental car market. Rental car companies sold off thousands of cars in the wake of declining demand to stay in business. But as vaccinations took hold, and people began to travel again, the dearth of supply sent prices soaring.

Plus, a global microchip shortage has curtailed production of new cars, making it difficult for rental car companies to replenish their supply.

Lidji said he believes the shortage of traditional rental cars has helped boost demand for Turo’s service. And, “with COVID, not knowing when things are going to change, it’s good to have an extra source of money,” he said. He recently bought a Mustang convertible for Turo rentals — which is wildly popular in Minnesota’s warmer months.

Beyond the extra cash, Lidji said he “really enjoys meeting and helping people, that’s a big part of it.” Not surprisingly, users have given Lidji a five-star rating on the Turo app.

This post was originally published on this site

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