DFW Airport Sues To Protect Avis, Hertz And National From Competing Against Car Sharing Platforms

Car owners renting out their vehicles on Turo and GetAround are facing problems at certain airports. Dallas – Fort Worth filed a lawsuit against Turo in the fall. But Turo is just the platform that connects car owners and renters and takes a fee. Now the airport is going after the people doing the actual transactions by “towing cars on the spot in parking lots.”

The airport complains that individuals renting out their cars aren’t licensed by the airport, “don’t pay airport fees, they don’t collect state rental car taxes or local rental car taxes and remit them to the state.” Rental cars, of course, are a huge revenue driver for the airport (at DFW they generate over $33 million a year, that’s far less than parking but it isn’t nothing).

  • Of course since Turo isn’t doing the same thing as a rental car agency – they are connecting a car owner and someone who wants to rent the car, not owning and storing and renting their own vehicle, the insistence that they do not have car rental agency licensing seems inapposite. Indeed in Texas the law considers peer-to-peer rentals distinct from car rental agencies.

  • The better approach would be to say, what are the actual legitimate concerns with the business? And address those. Instead, DFW airport runs sting “undercover rental operations” to ferret out car owners.

As with Uber a decade ago, car-sharing is facing significant entrenched interests. And those interests cloak themselves in local NIMBY concerns. For instance in Seattle Turo is “clogging crowded urban neighborhoods where parking is already limited” and in Hawaii legislators are considering a ban on the practice because of overtourism (one wonders, if tourists only visit Hawaii when they can rent a car from a local as opposed to a big agency, how the state became so popular in the years before the technology existed).

Airports are protecting big rental car companies, because those rental car companies ‘kick up’ to the airport. Individuals renting cars to arriving passengers don’t pay airports a vig.

Airports build rental car centers which rental chains pay to use. Of course those rental centers are suboptimal for passengers, who frequently have to wait for a bus, schlepp their luggage onto the bus and maybe stop at multiple terminals on the way. People renting their cars out using the Turo platform don’t warehouse those cars on the airport property.

It’s public property, so anyone should be able to enter. But airports can get crowded. An airport has a legitimate interest in keeping traffic on property moving. If they need to manage congestion it’s reasonable to dictate where certain activities can take place. It’s reasonable to recoup costs of providing those facilities. And it’s reasonable to throttle those activities until they have a better solution to manage traffic (e.g. with fees even).

But it’s not reasonable to turn the airport authority, in almost all cases in the U.S. a government body, as a protectionist took for rental car agencies (the way that Taxi and Limousine Commissions have often been captured by the taxi industry and used to protect taxi owners from rideshare).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I get it that DFW wants to do this. But this really isn’t the time, in my opinion. DFW runs out of cars fairly often when I’ve been there (especially on weekends, and especially Hertz). I would imagine Turo has risen in usage down there for that reason in particular. It seems like at the end of the day, this hurts the consumer.

  2. Crony capitalism at it’s finest. They have discovered their real enemy is the consumer.

  3. Oh no I have to get arrested by the Hertz police or I won’t be satisfied
    Say it aint so

  4. If the car sharing platforms were willing to pay the equivalent airport fees that the car rental companies pay (or even some “light” version of them), then there would be no issue. Instead, they fight the airport authorities tooth and nail because they want a competitive advantage over the incumbents. That’s great for them, and maybe lower costs for renters, but it’s hard to make the argument that it’s a fair system.

    It’s therefore unsurprising that there is a backlash from the authorities. Turo and Getaround can either negotiate a solution in each municipality, or they can deal with the consequences of non-compliance. Even Uber and Lyft eventually caved and started paying airport fees and TLC black car fees in NYC, mainly because they didn’t have much of a choice if they wanted to continue doing business in the city.

  5. Why do people support Uber? They blatantly break the laws, wine and dine government officials to get on their good side. They treat the drivers like trash, basically like slave labor.
    It is amazing all the people who say they believe in fair wages, humane working conditions, and who still use Uber. I guess they just have no brains (or no sense of morality. Maybe their hypocrisy meter is broken. Like the US presidents’).

  6. The basic question is whether these “rental” operations (the joint effort of the car owner and Turo) are doing business on the airport premises? The answer is obviously yes. Turo can say they are just putting a renter and owner together, but it is part of the transaction. Airports exist by charging all who do business on airport premises. They are not governmental entities with taxing power who can tax the local population to pay for the airport. Airports need funds to operate and their means involved user fees. The reasonableness of the fees is always at issue, but airportshave the legal right to charge commercial ventures doing business on their premieses. Interesting that you mention Uber. Uber pays fees at most airports for the right to conduct business on airport premises.

  7. Uber may have been breaking the law when it first started, but it sounds like, in Texas at least, Turo isn’t. I’m allowed to rent someone my car. I’m also allowed to park my car in a public garage. I’m not sure there’s a whole lot of gray area here.

  8. Airports actually are governmental bodies at most locations in the US. Only the San Juan airport is currently privatized.

  9. How would the airport “police” dropping off a car? Do they assign “security detail” to see if someone gets out of their car with no luggage and ASSUME they must be using Turo? How do they know you’re not going into the airport to pick someone up? Or arriving for a global entry interview? Or, more simply, how can you determine if someone is dropping off their car for Turo?

  10. “one wonders, if tourists only visit Hawaii when they can rent a car from a local as opposed to a big agency, how the state became so popular in the years before the technology existed”

    Because just a few years ago before pandemic started was way cheaper, used to get Jeeps for around 30 bucks per day from Alamo. When we went to Maui around last Christmas, was being quoted over 1k for smallest car from the big agencies for a 4 day rental!

  11. If the government-backed airport is giving preferential real estate to rental car companies, and personal defense and advocacy, then the government should ALSO be held responsible for the practices of their rental car business partners. This includes any and all false allegations brought against car lessees. If the state wants to play protectionism and corporate favoritism, then they should be held responsible for the things that go wrong with said rental car company. This is precisely why I dislike public-private-partnerships. Taxpayers subsidize looney anti-free market behavior.

  12. In Denver, Turo solved this problem by keeping the cars at a off site parking garage. You just take the bus there and get the car.

  13. DFW airport issues frequently align with the dysfunctional politics in Dallas, although the airport isn’t physically in Dallas. That’s why when smart companies relocate to TX from NY, Illinois, California, etc. they usually move outside of Dallas proper and beyond the reach of the political dimwits that run the city. Anyone care to guess the color of Dallas city politics? These same politics shade the operation of DFW airport.

  14. It sucks that they have to sting the renters, who may not be aware of the violation. I wonder if there is a better way.

    And for everyone who is having a little political diarrhea about DFW or the city or anything else you don’t like without thinking about at all, you may want to look to the feds for the reason.

    Federal Register Vol. 64, No. 30 /Tuesday, February 16, 1999 / Notices
    6. “Each federally assisted airport owner/
    operator is required by statute and grant
    assurance to have an airport fee and
    rental structure that will make the
    airport as self-sustaining as possible
    under the particular airport
    circumstances, in order to minimize the
    airport’s reliance on Federal funds and
    local tax revenues.”

    You want to ensure the airport isn’t being subsidized with federal funding right? Well every FAA supported airport has a responsibility to ensure they charge fair market value for all leases, with only a handful of exceptions (they are very specific so you can look them up in the FR if you want to know). Not even a local FAA office on airport property is zero or nominal rent rate. FAA pays the same as the Cinnabon. I would expect that the deals with rental car companies are similar as they support airport functions (and are often BUILT with FAA grants). Therefore, if the airport operators do not want to lose current and future FAA grant funding, and also be retroactively punished and have to pay grants back, then the airport operators must make all efforts to ensure it is not giving away free stuff, or below fair market value (FMV) on airport property.

    This all stems from the 5190.6b 15-1, and FAA’s Policy and Procedures Concerning the
    Use of Airport Revenue, 64 Fed. Reg. 7696, February 16, 1999, (Revenue Use Policy).

    Oh I just found a more current Federal Register. 79 FR 66282 Page: 66282-66288, from 11/07/2014.

    Authority for the Policy Amendment. This Policy Amendment is published under the authority described in Subtitle VII, part B, chapter 471, section 47122, and the Federal Aviation Administration Authorization Act of 1994, § 112(a), Public Law 103-305, 49 U.S.C. 47107(l)(1) (Aug. 23, 1994).

    This is your learning opportunity to better understand how things around you work.

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