Like other disruptive startups, Turo is having to litigate its way to success.
Turo, the Airbnb of cars, is locked in litigation with Los Angeles and San Francisco airports over its business model. The company says it is not rental car company, and should not have to pay rental car fees.
For now, Turo has the airports against the ropes and is gaining support from investors. Of course, it’s always a long, costly road when you have to go to court.
Turo has been working around LAX for years. Through the company’s peer-to-peer network, car owners rent their cars to other drivers and Turo gets a piece of the action.
But the airport is pushing back because Turo doesn’t have a permit to operate a rental car company. Turo has sued to settle the issue.
“Due to this misclassification, the airport expects Turo to obtain a rental car company permit and expects our community to pay anti-competitive fees whenever they choose to exchange cars at or near LAX,” Turo’s Chief Legal Officer Michelle Fang told TechCrunch.
She said companies like Enterprise Rent-a-Car have prodded airports across the country to crack down on Turo. It’s basically Uber v. Taxis all over again.
It’s a little different story at SFO. The city sued first, then Turo sued right back.
A judge denied the city’s demurrer, and the beat goes on. Turo seeks declaratory relief in both airport cases, but as always it will come down to money.
The airports want Turo to pay for permits and fees, and the company wants to get around them. That’s the whole idea with industry-disruptive companies like Turo, Uber and Airbnb.
For now, Turo and its investors are betting on the future. The company raised another $104 million in April.