The emerging car-sharing industry and companies such as Turo are already running into barriers in the Dallas area at one of its most important points — airports.
After filing suit against the largest car-sharing company Turo last fall, DFW International Airport is looking to make it harder for operators of car-sharing fleets to operate on its property by towing cars on the spot in parking lots.
Car-sharing companies have seen a boom in the last year as a shortage of rental cars slammed established operators and the sharing economy expanded from housing to swimming pools and backyards for pet owners.
Car-sharing has undergone its own revolution in recent years the same way that companies such as Airbnb have. Home rental websites have evolved from a couch-surfing platform to a network of owners operating 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” that own several cars, sometimes dozens, and can make a profit of more than $1,000 a month per new vehicle, the company said. Turo’s net revenue nearly tripled last year to $330 million, although it’s still operating at a steep loss, common for tech startups.
Competing 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 on the private market.
Dallas’ Nicholas Fennema has expanded his fleet to four cars, all new purchases, since he started working with Turo three years ago. He said his most popular vehicle, a Ford Bronco, can make up to a $4,000 a month profit, easily covering his monthly payments.
“I went from one car, doing it just for fun, to another car and another,” said Fennema, who runs real estate investment properties as a full-time job.
But just like any emerging business model where rules and regulations trail behind, car-sharing is having its own growing pains. Several airports across the country, including DFW Airport, have sued Turo and six operators for doing business on airport property. Airport officials say car-sharing hosts are doing thousands of transactions on airport property without the same regulations and costs that rental car companies or ride-hailing companies pay.
“We have a problem with illegal commercial activities, specifically, professional car renters who own fleets of vehicles and rent cars online and have them delivered here to the airport,” DFW Airport lawyer Paul Tomme said at an airport board meeting Aug. 2. “They don’t have a permit with the airport to do so even though the code requires them to have one, they don’t pay airport fees, 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 pops.”
The lawsuit brought by the airport in Tarrant County court said the six Turo operators named have conducted thousands of vehicle transfers to customers at the airport, transfers that the airport is unable to track because it’s done through Turo’s app.
Rental cars are a big business to the airport, expected to bring in $33.6 million in revenue for the airport this year while parking brings in another $145 million.
It’s not the only place where Turo has run into problems. Turo is facing 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 ruled that San Francisco International Airport cannot compel Turo to get the same kinds of licenses to operate on airport property 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 in the same bucket as multibillion-dollar rental car companies and to try to impose fees that are not suited to the Turo business model (which does not involve any on-premises lots or infrastructure) is improper,” Turo spokeswoman Catherine Mejia said in an email.
Some airports have created frameworks for car-sharing services such as Turo, but neither DFW nor Dallas Love Field has.
“Fair airport access cultivates consumer choice and the assurance that tourism dollars are going back into residents’ pockets,” Mejia said.
Tomme said the airport has identified Turo operators by doing undercover rental operations. If these new rules are approved by the cities of Dallas and Fort Worth, which oversee the airport, they will be able to start towing car-share vehicles in airport parking lots.
Fennema, who is not named in DFW’s lawsuit, said car-sharing hosts face costs to deliver vehicles at the airport. When he first started, Fennema waited for customers outside baggage claim, but that was a hassle because of rules against parking too long and the prospect of delayed flights. The option that he and most users have settled on is to park the car in the garage, where customers can open the vehicle through the app or with a code.
“My parking charges rack up pretty fast,” he said. “We pay $15 a day to park at least.”
Going to the airport can also be “a hassle” because of the time and costs, he said. Even after driving there, car-sharing operators need to take an Uber or bus back to their home. Still, Fennema said airports are an important part of the business because of vacation travelers. Sometimes he hires teenage neighbors to deliver cars, but often he does it himself.
Reviewers have noted that getting a car from Turo often costs about the same as a rental vehicle after fees. Customers can skip the rental counter, but they also face the risk of their Turo host canceling.
Dallas Love Field is limited because Texas law does not classify peer-to-peer car-sharing services as rental car companies, “which creates difficulties with enforcement,” spokeswoman Lauren Rounds said.
“Turo has been responsive to a degree, but there is currently not a solution in place to properly operate or charge for this service,” she said.
After lobbying from Turo and others in the industry, Texas passed a law in 2021 that said peer-to-peer car-sharing companies are distinct from rental car companies.
Love Field has pushed car-sharing hosts to use parking garages to conduct exchanges instead of clogging the pick-up areas outside of baggage claim. That subjects Turo users to fees for garage parking. Curbside pick-up at Love Field is free.
Car-sharing is having its growing pains outside of airports, too.
In Seattle, residents have complained that Turo operators with fleets of dozens of vehicles are clogging crowded urban neighborhoods where parking is already limited, according to The Seattle Times.
Lawmakers in Hawaii proposed a bill this year to ban peer-to-peer car-sharing as the Aloha state faces concerns over too many tourists, according to Hawaii News Now.
Trevor Davis, a junior ROTC teacher in Dallas and retired military recruiter, started listing his car on Turo in 2019 to justify the price of buying a new Nissan Sentra. He has purchased one more new vehicle and two used, all small and mid-sized sedans.
He said he saw a huge increase in demand starting in 2021, when COVID-19 restrictions started dropping but the rental car industry was facing shortages from selling off inventory the year before.
Now he said he can make about $1,000 a month on 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 tends to avoid the airport and now encourages customers to meet at their hotel, avoiding airport parking fees and run-ins with the airport itself.
“In the beginning, I was doing a lot of drop-offs at the airports, and then I noticed a little bit of friction, like you can’t just pull up there and wait,” he said. “Now it’s just easier to find somewhere else to meet.”
