businesses should not be given a perceived competitive advantage over traditional rental car businesses through more favorable operational requirements. If P2P carsharing businesses are given more favorable operational terms than traditional rental car businesses, airport operators might impose higher fees for that privilege.

7.2 Regulatory and Legal Strategies

As noted, airports should consider both financial and operational terms when regulating P2P companies and ensure that P2P businesses are not given a competitive advantage over their traditional rental car company competitors. This section discusses in more detail legal and regulatory strategies for achieving those goals.

The litigation involving airports and P2P programs is certainly the most visible and dramatic of the industry’s growing pains. But, despite what the cases in California and Massachusetts might suggest (see the next section), regulation of P2P operation at airports has generally been more collaborative. State legislation concerning P2P operations at airports and elsewhere is discussed in Chapter 6. As explained, airports have for the most part been successful in obtaining court orders confirming their right to regulate P2P carsharing businesses on commercially reasonable terms as well as in reaching settlements with these businesses, resulting in permits that place P2P carsharing businesses on similar footing with traditional rental car businesses. Although at the time this report was being prepared one P2P carsharing business was still in litigation with two airports (Dallas Fort Worth and San Francisco international airports), over the last several years that business has made a concerted effort to settle litigation and enter into permits with airports. In addition, as discussed in Chapter 6 and presented in Table 6-1, a growing number of jurisdictions have enacted or are considering legislation governing the regulation of P2P carsharing businesses. These judicial precedents and evolving legislation will likely minimize the need for future lawsuits and encourage P2P carsharing companies to continue to negotiate permits with airports.

In negotiating permits with P2P businesses, it is important for airports to keep in mind the competitive fairness principle, as well as operational constraints at a given airport. Again, for the reasons discussed, the financial and operational terms that apply to P2P permits should place P2P businesses on similar footing with their traditional rental car business competitors. To offer a simple example, it is suggested that if rental car companies pay a 10 percent gross receipts fee and transport customers by shuttle to a CONRAC, then P2P companies should also pay a 10 percent gross receipts fee and operate from a location accessed by shuttle. If a P2P company operates from a more desirable location, such as a parking lot closer to the terminal, then an airport operator might impose a higher gross receipts fee for that privilege. If the P2P company operates from a less desirable location—for example, rental car companies are in terminal, but P2P customers must take a shuttle—then the airport operator might impose a lower gross receipts fee. An airport may also choose to require P2P companies to pay rent for space at the airport (i.e., for designated parking or pickup spaces), fees associated with the use of shuttles and other common transportation, and other user fees. The financial and operational requirements will vary from airport to airport, but the goal remains the same: to place P2P companies and traditional rental car companies on similar footing, which will serve to maintain and increase non-aeronautical revenues and achieve fair competition.

7.3 Summary of Current Litigation Involving Airport Owners

There have been multiple lawsuits involving P2P carsharing businesses and airport owners, several of which have settled. The lawsuits and their status are summarized as follows:

• Massachusetts Port Authority v. Turo, Inc., 166 N.E.3d 972 (Mass. 2021). In January 2020, a Massachusetts Superior Court granted Massachusetts Port Authority’s (Massport) motion for a preliminary injunction to essentially prohibit Turo from operating on the property of Boston Logan International Airport or from advertising the ability to do so. This case made it to the Supreme Judicial Court (SJC), the highest state court, which upheld all critical components of the injunction. The SJC also rejected Turo’s argument that its activities, conducted largely online, were immune from regulation under Section 230 of the Communications Decency Act (CDA). Following this initial victory for the airport in December 2021, the parties fully briefed summary judgment motions and then reached a settlement in principle. In September 2022, the Massport Board approved the terms of the settlement, which included a $2.5 million penalty payment by Turo and a 6-month, 1-year pilot program that would allow Turo’s users to exchange vehicles at the Logan economy parking garage, effective January 1, 2023. This case and Turo, Inc. v. Superior Court of City and County of San Francisco, discussed subsequently, illustrate that courts are generally willing to rule that airports have the authority to regulate P2P companies’ operations pursuant to airports’ broad authority to regulate and collect fees for commercial activity at the airport.
• Turo, Inc. v. Superior Court of City and County of San Francisco, 80 Cal.App.5th 517 (Cal. App. Ct. 2022). One of the first significant lawsuits involving Turo was filed in San Francisco, where Turo had initially entered into a license agreement for its airport operations and then later refused to renew that agreement. The City of Los Angeles sought to regulate Turo’s operations at its airport by classifying the company as a rental car company under a state statute that allows airports to charge facility fees to such companies. The state appeals court ruled that Turo was not a rental car company for the purposes of the statute, vacating the trial court’s order. The remaining issues in the case concerning regulation of Turo have not yet been resolved, and as of November 30, 2023, the case has been stayed until January 19, 2024.
• Turo, Inc. v. City of Los Angeles, 847 F. App’x 442 (Ninth Cir. 2021). In 2018, Turo initiated a lawsuit against the City of Los Angeles after receiving a series of cease and desist letters from the City of Los Angeles concerning Turo’s unpermitted rental activity at Los Angeles International Airport. The suit asserted, among other issues, an equal protection claim against the City of Los Angeles for the fees it sought to impose on Turo’s airport activities. The City of Los Angeles brought counterclaims against Turo in 2020 and obtained a preliminary injunction ceasing Turo’s airport transactions shortly thereafter. In 2021, the Ninth Circuit Court vacated the injunction on the grounds that the City of Los Angeles had not shown sufficient irreparable harm for the injunction. The case proceeded through extensive discovery and reached a settlement in principle in February 2022. In October 2022, the Board of Airport Commissioners approved the settlement, which included a $5.55 million penalty payment by Turo and a license agreement that would allow Turo’s users to access privately owned off-airport parking lot shuttle buses to conduct airport transactions (i.e., lease vehicles) at these off-airport lots.
• Dallas Fort Worth International Airport Board v. Turo, Inc. (Case No. 352-329488-21) (Tarrant County, Tex.). In October 2021, Dallas Fort Worth International Airports filed a lawsuit against Turo (and later added five of its commercial-level large hosts), seeking to enforce the airport’s ban on unpermitted commercial activity on airport property. In addition to claims similar to those brought by other airport sponsors against Turo, Dallas Fort Worth also sought to enforce state and municipal rental car tax obligations against Turo and its users. Turo filed counterclaims against Dallas Fort Worth that mirrored the counterclaims Turo brought against other airports. The lawsuit was in discovery as of this writing, with a trial date set for April 22, 2024.
• In addition to these lawsuits, Turo has been sued by Tampa International Airport, Nashville International Airport, and Asheville Regional Airport. Each of these cases resulted in a settlement of the claims relatively early in the lawsuit.
• P2P companies may come under increasing pressure from state regulators if there is a rise in major liability cases, like the one settled in New Jersey in July 2023. The settlement concluded

a dispute after a 2015 serious but non-fatal crash. The injured party won $1.14 million in a bench trial, and the defendants sued Turo and Nautilus, Turo’s New Jersey insurer at the time, which paid $900,000 and $700,000, respectively.

7.4 Summary of Relevant Court Decisions

There have been several reported court decisions concerning P2P companies—nearly all involving Turo—operating at airports without a permit. Each decision has occurred relatively early in the life cycle of the lawsuit and focused on discrete legal arguments and issues. Put together, these cases illustrate that courts are generally willing to rule that airports have the authority to regulate P2P companies’ operations pursuant to airports’ broad authority to regulate and collect fees for commercial activity.

Preliminary Injunctions

Two courts—the Central District of California and the Superior Court of Massachusetts—issued preliminary injunctions prohibiting Turo’s operations at Los Angeles International Airport and Boston Logan International Airport, respectively, in 2020. Both injunctions were immediately appealed to the Ninth Circuit and the Massachusetts SJC. In 2021, the Ninth Circuit reversed the injunction for operations at Los Angeles International Airport, and the SJC upheld the injunction for Boston Logan International Airport.

The trial court preliminary injunction decisions are similar. In both venues, the courts focused on the likelihood of the airports succeeding on the merits of their aiding and abetting trespass claims against Turo, and Turo’s CDA defense. And in both decisions, the courts determined that Turo had actively encouraged its users to conduct airport operations even after it knew the airports required a permit for such operations and that the CDA did not apply.

On appeal, the Ninth Circuit reversed the injunction solely on the basis that, as a matter of California state law, the airport was required to demonstrate irreparable harm and had failed to do so because it could be compensated after the fact for any unlawful transactions. In Massachusetts, the SJC upheld the injunction, focusing mainly on Turo’s CDA defense. The SJC determined that the claims against Turo were based on Turo’s own language advertising Boston Logan International Airport as a desirable location for a pickup or drop-off, and that the airport was seeking to hold Turo liable for that language and Turo’s continued facilitation of airport transactions. Hence, the SJC determined that the CDA did not immunize Turo from the lawsuit.

Notwithstanding the differing results at the appellate level, both lawsuits resulted in a settlement wherein Turo paid the airport a penalty payment and entered into a permit authorizing airport transactions.

Treatment as a Rental Car Company

In a lawsuit between the San Francisco International Airport and Turo, a slightly different issue was presented. Los Angeles World Airports and Massport both relied on the airports’ general power to regulate commercial transactions as the basis for their claims against Turo. San Francisco International Airport took a slightly different approach, claiming, inter alia, that Turo was a rental car company under a California statute and was therefore required to pay CFCs for its airport operations. The San Francisco Superior Court issued a summary adjudication decision that Turo did qualify as a rental car company because it was in the business of enabling the public to rent motor vehicles. The court rejected Turo’s argument that, because the company itself does

not own or control the vehicles available for rent on its website, it was not “renting” the vehicles. On appeal, the California Appeals Court reversed that decision, agreeing with Turo’s urged interpretation of the term “rental car company.”

Notably, this decision was solely a determination of a California state law concerning CFCs. The decision does not curtail an airport’s ability to regulate P2P companies as commercial entities, even within California. It does, however, illustrate the risks in attempting to classify a P2P company as a rental car company. Though P2P companies will vigorously dispute that classification, airports can regulate P2P companies without classifying them as rental car companies.

7.5 Types and Amounts of Fees Airport Operators Charge P2P Carsharing Businesses

As described in the section on regulatory and legal strategies, airport operators commonly require P2P carsharing businesses to pay a fee calculated as a percentage of their airport-related gross revenues plus any parking fees incurred by the hosts and by the customers for use of the designated airport parking facility. Generally, airports do not require P2P carsharing businesses to obtain or display permits or decals like those required of other commercial ground transportation businesses.

Each airport operator determines the appropriate percentage fee to charge P2P carsharing companies, considering, among other factors,

• The fees charged traditional rental car companies (e.g., 10 percent of airport-related gross revenues).
• The convenience of P2P handoff locations compared with the locations of traditional rental car ready and return spaces (respectively, spaces where cars that have been cleaned and serviced and are ready to be leased are stored, and spaces where customers drop off “dirty” cars upon their return to the airport).
• The need for traditional rental car company customers to ride a shuttle bus to the CONRAC.
• The ability of P2P companies to provide curbside drop-offs and handoffs, which may warrant fees higher than those charged to traditional rental car companies or which may warrant higher fees based on an applicable ground transportation policy regarding curbside access.
• The unique characteristics of the airport and the passengers the airport serves.