City of San Francisco Sues FlightCar Over Airport Fees

Accused of not complying with San Francisco International Airport’s (SFO) regulations and refusing to pay fees, FlightCar is being sued by the city of San Francisco. On May 31, San Francisco City Attorney Dennis Herrera filed a lawsuit against FlightCar, a car sharing startup that allows travelers to rent out their vehicles in exchange for free parking, a car wash, shuttle service and the opportunity to earn up to $10 per day.

According to the lawsuit, FlightCar has flouted SFO’s permitting and fee requirements for rental car companies. The City contends that FlightCar has an unfair advantage over other rental agencies that comply with the regulations and must pay the appropriate fees – 10% of gross profits and $20 per rental.

Rujul Zaparde, co-founder of FlightCar, said his company, which launched in February, refuses to pay the fees on the assertion that it isn’t a traditional airport car rental agency; it’s a peer-to-peer car sharing company.

“The airport has refused to consider us as anything other than an off-site rental agency,” said Zaparde. “And if that’s the case, then it will be decided in court.”

Operating from an off-airport site, FlightCar customers drop their cars at a lot in Burlingame, Calif., and a limo service takes them to and from the airport. And according to Zaparde, the limos are licensed with the airport and pay the appropriate airport fees for each round trip.

Although FlightCar operates from an off-airport location, it is still considered a car rental company that caters to customers of the airport, according to Doug Yakel, public information officer for SFO.

“This company is competing for the same customer base yet without incurring the costs of their competitors,” said Yakel. “We view that as an unfair business practice.”

And with regulatory agencies like the California Public Utilities Commission still trying to figure out how to regulate shared ride businesses, the airport will continue to enforce its existing rules and fees for all rental companies, said Yakel.

FlightCar has until July 1 to respond to the lawsuit. For an Auto Focus blog on the topic, click here.

By Amy Winter

Comments

  1. Jerry D. [ June 12, 2013 @ 04:04PM ]

    FlightCar came up with a more economical and/or different way to operate.
    They are given fewer privileges at the airport than on-airport car rental companies are provided with by the City.
    Yet the City wants to charge them fees as if they are located on the airport.
    Why they should be charged the same fees as the old style on-airport car companies, (and pay 10% of their profits even over rentals that do not involve airport customers), if they are located well of off the airport, is not clear.
    It comes down to another way of sticking the public with fees for services it doesn’t need and doesn’t receive. The City or the SF airport, wants to charge people even after they are off the airport.
    Paying a bit extra for the privilege of picking up a car right at or very near the airport, I can see having some use. Why I would have to pay the same fees if I make an effort to travel off the airport and then arrange to pick up a car from my brother or any other person who wants to rent me his car off the airport, I find hard to understand.
    It is not an unfair business practice to any on-airport car rental agencies if an off-airport organization has figured out how to fill a void in the transportation needs for people off the airport. Especially not since any on-airport organization can also readily set up such an off-airport branch or organization, if they wish to emulate FlightCar’s business model. That is probably the fear of the City.
    They might lose some revenue, for services they would be no longer providing, and payments from car renters who could no longer be held channeled through a toll booth for the City, for activities they want to conduct off-airport
    It all amounts to taxing people who can provide a less expensive transportation mode, to protect the interest of the traditional on-airport car rental companies or the coffers of the City and the airport.
    FlightCar isn’t even renting its own cars to the traveling public.

  2. Jerry D. [ June 12, 2013 @ 04:05PM ]

    FlightCar came up with a more economical and/or different way to operate.
    They are given fewer privileges at the airport than on-airport car rental companies are provided with by the City.
    Yet the City wants to charge them fees as if they are located on the airport.
    Why they should be charged the same fees as the old style on-airport car companies, (and pay 10% of their profits even over rentals that do not involve airport customers), if they are located well of off the airport, is not clear.
    It comes down to another way of sticking the public with fees for services it doesn’t need and doesn’t receive. The City or the SF airport, wants to charge people even after they are off the airport.
    Paying a bit extra for the privilege of picking up a car right at or very near the airport, I can see having some use. Why I would have to pay the same fees if I make an effort to travel off the airport and then arrange to pick up a car from my brother or any other person who wants to rent me his car off the airport, I find hard to understand.
    It is not an unfair business practice to any on-airport car rental agencies if an off-airport organization has figured out how to fill a void in the transportation needs for people off the airport. Especially not since any on-airport organization can also readily set up such an off-airport branch or organization, if they wish to emulate FlightCar’s business model. That is probably the fear of the City.
    They might lose some revenue, for services they would be no longer providing, and payments from car renters who could no longer be held channeled through a toll booth for the City, for activities they want to conduct off-airport
    It all amounts to taxing people who can provide a less expensive transportation mode, to protect the interest of the traditional on-airport car rental companies or the coffers of the City and the airport.
    FlightCar isn’t even renting its own cars to the traveling public.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

 
 
 
 
 

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Data Metrics Expose the Small Fleet Challenge

For our readers who run small fleets, can you guess what percentage have “fleet” in their job title?

Has Consolidation Killed the Car Rental Entrepreneur?

In the midst of a new round of car rental company buyouts, the successful independent is becoming a rare commodity.

Why Some Residents Don’t Want car2go

A town hall meeting is a good barometer of the growing pains of a new transportation business model.

Job Finder: Access Top Talent. Fill Key Positions.