Maine Car-Sharing Law Could Favor Auto Rental Industry Across U.S.

Bill to Favor Auto Rental industry

Regulations surrounding insurance liability a sticking point with rental rivals

A bill that’s only a signature away from becoming law in Maine could balance the obstacles involved in regulating the auto rental industry. Despite protests from peer-to-peer car-sharing upstarts like Turo and Getaround, the bill, The Motor Vehicle Rental Modernization Act will force such companies to abide by current laws that affect car rental companies like Enterprise, Avis, Hertz and Budget.

Rivals like Turo argue that if the bill passes, they’ll have no choice but to shut down. Their argument is that their business models don’t consider their fleets as rentals. But the passage of the bill through Maine’s state legislature is indicative that lawmakers don’t seem to agree.

The logic among the bill proponents runs along the lines of owners working for a car-sharing company make their vehicles available short-term to clients are actually renting out those vehicles, while avoiding several insurance liability regulations.

Those same regulations are what car rentals must follow. And with the bill almost ready to be signed by Maine Gov. Janet Mills, not only do supporters of the act believe it adds fairness to the field of competition, consumers will also get added protection.

“Consumers are not well served if they get into an accident in a peer-to-peer vehicle, and then discover there is an insurance gap that does not provide sufficient coverage for the driver, occupants, or third parties,” said Sharky Laguana, a spokesperson for the American Car Rental Association, in an interview with Forbes.

Speculation has it that if passed, the law will have shockwaves going across the U.S., as more than 30 other states are pondering the nature of car-sharing and whether they fit into the car rental mosaic.

Regulatory moves notwithstanding, car rental companies have taken it upon themselves to restructure some of their operations to take on the ride-sharing industry, which have started to eat into the market. And most of them are fighting back in a big way, mostly by embracing new technology to meet the needs of a more fickle customer base.

Ground Zero for most of the big players have been in beefing up their apps to introduce a slate of new features, enabling customers to better manage their car rental accounts and take advantage of pick and pay amenities from car interior environmental control to a range of liability coverage options.

The apps have also made customer feedback more immediate, cutting down on the frustration of customers waiting for replies if something is wrong with the vehicle or transaction. More recently, companies like Enterprise and Hertz introduced a number of tiered monthly subscription incentives, while Avis launched on its app a Split My Bill feature enabling clients to better manage how they’d pay for a rental. Car rentals are banking on apps to boost customer contentment in the wake of a 2018 report issued by market research firm J.D. Power. The study revealed that customers that use apps for car rentals of airports had a higher level of satisfaction with service than through other methods.

But whether regulations favoring car rentals eventually take hold, don’t expect this latest wave of innovation to end, particularly when progress is edging closer to artificial intelligence technology, which could further drive the industry towards more wireless connectivity, green-powered vehicles and autonomous transport. As participants have noted, regardless of what encroaches the market, the only constant in the auto rental industry has always been change.

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