A battle is brewing over the peer-to-peer car rental market in Illinois.
Gov. Bruce Rauner recently issued an amendatory veto, attempting to change a bill that would regulate personal vehicle renters and require them to pay the same taxes as big companies.
“Peer-to-peer car sharing is an innovative new service that simultaneously allows vehicle owners the freedom to realize additional income on an existing household asset, while also affording consumers a new service to meet their mobility needs,” Rauner wrote in his veto message to lawmakers. “Many of the structures this sweeping legislation proposes are ill-suited to thoughtfully regulate this new industry.”
Turo is a peer-to-peer rental marketplace that gives users a way to rent unique cars and allows vehicle owners, called hosts, to list their rides for rent. Michelle Fang is general counsel for the company.
“We’re supportive of regulating peer-to-peer car sharing in Illinois, as is the governor,” Fang said. “But we believe the industry should have had a seat at the table and it shouldn’t have been dictated by Enterprise [Rent-A-Car] through secretive backroom deals.”
Fang said she was frustrated by the speed at which the final language was written and how quickly votes took place, arguing Enterprise lobbyists were encouraging lawmakers to ram the bill through the House and Senate.
“What we saw in Illinois, is that Enterprise basically had a bill totally unrelated to peer-to-peer car sharing,” Fang said. “Then the day before the hearing [they] gutted the bill and replaced it with a regulatory framework for peer-to-peer car sharing and rammed it through without any input or participation from the industry whatsoever.”
State Rep. Grant Wehrli, R-Naperville, chief co-sponsor of the bill in the Illinois House, previously told Illinois News Network that there was nothing unusual about the way the legislation came together.
“My door is always open, my phone numbers are published,” Wehrli said. “No one from Turo reached out to me specifically. There were lobbyists on all sides of this issue working very hard. To say they didn’t have a seat at the table, I would say, is disingenuous, when they had lobbyists actually reaching out to us.”
Rental industry officials argue for a level playing field when it comes to fees and safety regulations. John R. Barrows, with the American Car Rental Association, called the Rauner's action “ponderous.”
“SB 2641 would have extended safety measures that were designed to protect all consumers who rent vehicles in Illinois,” Barrows wrote in a statement. “Now, peer-to-peer car rental providers can define their business model however they choose, so as to avoid both safety laws as well as rental car tax obligations.”
Fang said companies like Enterprise backed the bill to increase costs for the peer-to-peer market, even while they are exempt from paying state taxes when buying new vehicles for their fleet.
“What they’re trying to do is preserve this tax exemption for themselves, but then double- and triple-tax people that use peer-to-peer car sharing,” Fang said. “It’s really an anti-competitive play.”
According to Turo, more than 7,000 Illinois residents currently are sharing their vehicles and about 264,000 citizens have used the service. The average renter is earning $625 dollars each month sharing a car.
“We believe that the lawmakers in Illinois, if they understood what really went on here, they wouldn’t have been supportive of this bill,” Fang said. “We’re hopeful and optimistic we’ll have a good, fair hearing heading into next session.”
The Illinois legislature can now accept the Governor’s changes or vote to override. If no action is taken, the bill will die.