Arizona Lawmakers at Odds Over Car-Sharing Regulations

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In much the same way Uber turned the taxi industry topsy turvy, car-sharing company Turo has had an impact on the car rental market like never before. It has established players scrambling for a competitive advantage and even the government second-guessing itself in how to even define the industry.

It’s the latter issue that’s raised its head in Arizona as Republican senators are at odds over what type of companies can be deemed car rental agencies. Sen. David Livingston is supporting a bill to treat firms like Turo and Getaround the same way as companies like Enterprise and Hertz. In the opposite corner is Sen. Travis Grantham who claims ride sharing is different from car rentals and should be exempt from legislation affecting the industry.

Livingston has the backing of Enterprise, which wants Turo to be classified as a rental agency. Turo describes itself as a peer-to-peer rental service, which allows car owners to lease out their own vehicles to potential customers in much the same way Airbnb merchants open their residential doors to visitors wanting room and board for a short time.

“So if I rent my car to you and you pay me, I don’t know how that’s not a rental transaction,” said Livingston to the Arizona Capitol Times.

Grantham argues that the definition of a car rental agency doesn’t apply to companies like Turo on grounds that such firms don’t own their own fleet. Those vehicles belong to the car owners who join Turo by opening an account on the company website, where they make their services available. While Grantham is on board with Livingston that policies involving driver safety and insurance are murky when applied to Turo’s peer-to-peer status, he believes that industry leaders like Enterprise are trying to scare off newer companies trying to define the car rental economy.

“This is an existing industry that’s very well established, the rental car companies, trying to regulate a fledgling industry that threatens a little bit of competition,” retorted Grantham to the Arizona Capitol Times. “I think competition is a good thing for the consumer.

Enterprise and other car rental giants might be concerned about a few advantages of Turo, namely its rental prices, ranging from a $20 rental of a bucket of bolts to $200 for something that’s in the luxury class. There’s also fewer hassles in the peer-to-peer transaction, as most of the paperwork, including insurance options, can be done online.

How bills awaiting scrutiny in Arizona may be treated could be a litmus regulatory test that may affect the rest of the continent. But both Grantham and Livingston are likely to agree on at least one thing. It’s yet another turning point in a rapidly-changing car rental industry.

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