Technological innovation is changing our lives for the better – driving consumer choice, marketplace competition and convenience unimaginable even a decade ago.
Want to get a meal delivered from your favorite restaurant? Request a ride from Uber or Lyft? Reserve a home via Airbnb or HomeAway? All of this and much more is at our fingertips with a few clicks on a smartphone.
Yet, with each technological advance we witness the same response as whatever legacy industry is being disrupted seeks the government’s assistance in burying the upstarts in red tape, taxes and fees. And all of this while cloaking its anti-competitive actions behind talk of “leveling the playing field” or “protecting consumers.”
Don’t believe it.
We’re seeing this same drama play out again as the car-rental lobby asks the State of Arizona to regulate a new peer-to-peer car sharing service out of existence. App-based companies like Turo and others allow people to make their privately-owned vehicles available for anyone else to reserve via an online platform. The vehicle owner sets the terms and price and the entire transaction occurs via the app, with the technology company taking a percentage.
It’s cashless and convenient. The attraction for consumers is obvious.
For the car sharing host, it’s a chance to earn extra money – $350/month for the average Arizona host on Turo, the largest of the services. Nearly 1 in 5 Turo hosts are veterans or active military members, many of whom list their vehicles on the service while they’re deployed.
What about car sharing users? The services are a new option, and one that may be less expensive and more convenient than visiting a traditional car-rental counter.
Opponents of the new industry, led by the rental car conglomerates, propose legislation that would stop car sharing in its tracks. With SB 1305, they seek to treat each private citizen who lists their vehicle on an app as if they were a car rental company with a massive fleet. Never mind that Turo and similar platforms don’t own any vehicles and are no more a car rental company than Airbnb is a hotel.
Regardless, SB 1305 would heap fees and taxes on car sharing individuals while giving them none of the financial breaks enjoyed by the big rental car providers. Companies like Enterprise, for example, don’t pay sales tax on new vehicles – a tax break that saves them approximately $24 million each year. No such luck for private citizens like you, me and anyone using a car sharing app. As individuals, we pay sales tax at the time of vehicle purchase, as well as annual Vehicle License & Title fees based on the value of the car.
Thankfully, there’s a better way. We’re proud to sponsor and support HB 2559, bipartisan legislation that establishes necessary guidelines in areas such as insurance and public safety, while recognizing car sharing is a new business model with unique attributes and needs.
With HB 2559, Arizona can strike a proper balance that protects both consumers and personal freedom. Let’s continue to welcome the change-makers and innovators improving our world one app at a time. Who knows what they’ll think of next?
State Rep. Travis Grantham is a Republican from Gilbert and the prime sponsor of HB 2559. He was elected in 2016. Rep. Robert Meza is a Democrat from Phoenix. He was elected in 2002.