Emerging car-sharing industry hits roadblocks at DFW airport

The emerging car-sharing industry and companies like Turo are already facing barriers in the Dallas area at one of the most important points: airports.

After filing a lawsuit against the largest car-sharing company Turo last fall, DFW International Airport is seeking to make it harder for car-sharing fleet operators to operate on its property by towing cars on-site in parking lots.

Car-sharing companies have boomed in the past year as rental car shortages have hit established operators and the sharing economy has expanded from homes to swimming pools and backyards for pet owners.

Car sharing has undergone its own revolution in recent years, in the same way that companies like Airbnb have. Rental websites have evolved from a couch surfing platform to a network of owners managing several and sometimes dozens of properties.

San Francisco-based Turo, which filed for an IPO in January, has moved from a service where people share their own cars to a network of “hosts” who own several cars, sometimes dozens, and can turn a profit of more than 1,000 dollars per month for a new vehicle, the company said. Turo’s net income nearly tripled last year to $330 million, though it still operates at the heavy losses common to tech startups.

Rival car-sharing company GetAround announced plans to go public earlier this year through a special-purpose acquisition company valued at about $1.2 billion. That was after raising more than $500 million in the private market.

Nicholas Fenema of Dallas has expanded his fleet to four cars, all new purchases, since he started working with Touro three years ago. He said his most popular vehicle, the Ford Bronco, can bring in up to $4,000 a month in profit, easily covering his monthly payments.

“I went from one car, doing it just for fun, to another car and another,” said Fenema, who manages real estate investment properties as a full-time job.

But like any emerging business model where rules and regulations lag behind, car sharing has its own growing problems. Several airports across the country, including DFW Airport, have sued Turo and six operators for doing business on airport grounds. Airport officials say car-share hosts conduct thousands of transactions at airport properties without the same regulations and costs that car rental or ride-hailing companies pay.

“We have a problem with illegal commercial activities, specifically, professional car rental companies that own fleets and rent cars online and deliver them here at the airport,” DFW Airport attorney Paul Thome said at an Aug. 2 airport board meeting. “They don’t have a permit from the airport to do this, even though the code requires them to have one, they don’t pay airport taxes, they don’t collect state rental car taxes or local rental car taxes and remit them to the state.”

Tomme said the idea is to go after large Turo operators with dozens of vehicles, “not mom and dad.”

The suit, filed by the airport in Tarrant County District Court, says the six Turo operators named made thousands of vehicle transfers to airport customers, transfers the airport could not track because they were made through Turo’s app .

Rental cars are big business for the airport, expected to bring in $33.6 million in revenue for the airport this year, while parking brings in another $145 million.

That’s not the only place Touro has run into trouble. Turo faces similar lawsuits from airport authorities in Massachusetts, Tennessee and Florida, according to the company’s regulatory filings. In California, where Turo is based, state courts have ruled that San Francisco International Airport cannot force Turo to obtain the same types of licenses to operate on airport grounds that rental car companies need.

A spokeswoman for Turo said the company is not a rental car business.

“DFW’s attempt to lump the peer-to-peer car sharing community into the same bucket as the multi-billion dollar rental car companies and try to impose fees that are not appropriate for Turo’s business model (which does not include any local lots or infrastructure) is inappropriate,” Turo spokeswoman Catherine Mejia said in an email.

Some airports have created frameworks for car-sharing services like Turo, but neither DFW nor Dallas Love Field has.

“Equitable airport access cultivates consumer choice and confidence that tourism dollars are put back into residents’ pockets,” Mejia said.

Thome said the airport identified the Turo operators by conducting undercover for-hire operations. If these new rules are approved by the cities of Dallas and Fort Worth, which control the airport, they will be able to start pulling shared cars into airport parking lots.

Fenema, who was not named in the DFW lawsuit, said car-share hosts face costs for delivering vehicles to the airport. When it first started, Fenema waited for customers at baggage claim, but it was a hassle because of rules against parking too long and the prospect of delayed flights. The option he and most users have settled on is to park the car in the garage, where customers can unlock the vehicle through the app or with a code.

“My parking fees are going up pretty quickly,” he said. “We pay at least $15 a day to park.”

Getting to the airport can also be “difficult” because of the time and cost, he said. Even after driving there, rideshare operators must take an Uber or bus back home. Still, Fenema said airports are an important part of the business because of vacationers. Sometimes he hires teenage neighbors to deliver cars, but often he does it himself.

A Silkway West Airlines cargo plane flies over cars parked at Express South at DFW Airport on Monday, Aug. 1, 2022.(Smiley N. Pool / staff photographer)

Reviewers have noted that getting a car from Turo often costs almost the same as a rental vehicle after fees. Customers can skip the rental counter, but they also face the risk of their Turo host being cancelled.

Dallas Love Field is limited because Texas law does not classify peer-to-peer car-sharing services as rental car companies, “which creates enforcement difficulties,” spokeswoman Lauren Rounds said.

“Turo is responding to some extent, but there is currently no solution to properly function or charge for this service,” she said.

After lobbying by Turo and others in the industry, Texas passed a law in 2021 that says peer-to-peer car-sharing companies are different from rental car companies.

Love Field had car-sharing hosts use parking lots to make exchanges instead of congesting non-luggage pickup areas. This subjects Turo users to garage parking fees. Street pickup at Love Field is free.

Car sharing is experiencing growing problems outside of airports as well.

In Seattle, residents have complained that Turo operators with fleets of dozens of vehicles are clogging up crowded city neighborhoods where parking is already limited, according to Seattle Times.

Hawaii lawmakers proposed a bill this year to ban peer-to-peer car sharing as the Aloha State faces concerns about too many tourists, according to Hawaii News Now.

Trevor Davis, a Dallas junior ROTC teacher and retired military recruiter, started registering his car with Turo in 2019 to justify the purchase price of a new Nissan Sentra. He has purchased another new vehicle and two used, all small and medium sedans.

He said he saw a huge increase in demand starting in 2021 when the COVID-19 restrictions began to lift, but the rental car industry faced a shortage of inventory sales the year before.

Now, he said he can make about $1,000 a month from each car, although he doesn’t do it full-time because of his teaching job. Still, he said he makes more than enough to clear car payments and other expenses.

He avoids the airport and now encourages customers to meet at his hotel, avoiding airport parking fees and clashes with the airport itself.

“In the beginning I was doing a lot of pick-ups at airports and then I noticed a bit of friction, like you can’t just stop there and wait,” he said. “Now it’s easier to find somewhere else to meet.”

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