Turo files lawsuit against Los Angeles in car-sharing battle at LAX

Peer-to-peer car-sharing marketplace Turo has filed a lawsuit against the city of Los Angeles Airport in a preemptive strike aimed at defending the ability of its users to rent out their personal cars at Los Angeles International Airport.

Turo filed the lawsuit Thursday in the U.S. Central District Court of California in Los Angeles. The city is not able to comment on ongoing litigation, Alex Comisar, press secretary for LA Mayor Eric Garcetti said.

The Turo lawsuit has not yet been served on Los Angeles World Airports, so we have not been able to review the specifics, a spokesperson from LAX said.

Turo contends in its lawsuit that LAX has misclassified its peer-to-peer car-sharing platform as a rental car company. Turo argues that California's car-sharing law is clear and notes that it doesn't own or operate a fleet of vehicles or use the airport's facilities that traditional rental car companies do.

"Due to this misclassification, the airport expects Turo to obtain a rental car company permit and expects our community to pay anti-competitive fees whenever they choose to exchange cars at or near LAX," Turo Chief Legal Officer Michelle Fang told TechCrunch. "We've seen firsthand how rental car giants Enterprise Rent-a-Car have prodded airports across the country, including LAX, to attack our community, including our users' rights to choose transportation options other than rental cars and to share their own cars to supplement their income."

Fang said LAX has repeatedly refused to even come to the table despite efforts to negotiate. But because LAX considers Turo a commercial operation, the company is supposed to have a permit.

Turo has operated without a permit for two years, a violation of the city's ordinance.

Turo says in the lawsuit that it has reached out to LAX officials in an effort to develop an appropriate fee structure. The company is open to paying a fee that is in line with how ride-hailing companies are charged.

"The fees need to be proportionate for the way that the ground transportation is being used," Fang said, adding that rental car companies need parking lots and shuttles and other infrastructure at airports. "The use to LAX is much more comparable to TNCs and limos and taxis than it is to rental cars."

The company decided to take action after it viewed email messages between the car rental company Enterprise Holdings and city officials that discussed an impending lawsuit against Turo. Enterprise has yet to respond to a request for comment on the lawsuit.

The lawsuit against Los Angeles marks further escalation of a battle between Turo and established car rental companies that aim to protect their domains.

Earlier this year, San Francisco sued Turo for allegedly ignoring fee requirements and other rules at San Francisco International Airport. The city's lawsuit argued that Turo’s users have added to airport traffic congestion and that its operation at the airport without paying fees gives it an unfair advantage against competitors.

Turo countersued San Francisco, saying the city was trying to classify it as a traditional rental car company. That lawsuit was thrown out by the court earlier this month.

Turo closed a $104 million Series D round in April. The company has raised $205 million to date.