The Travel Troubleshooter - Sharing Companies Take Over a Share of the Travel Industry

gavelChristopher Elliott, The Travel Troubleshooter, July 16, 2013

Instead of paying $18 a day to park at San Francisco International Airport last month, Daniel Denegre tried something new. He handed the keys to his Hyundai Accent to a start-up company called FlightCar, which offered "free" parking at an off-airport lot in Burlingame, Calif., and an opportunity to earn up to $20 a day by renting his vehicle to someone else.

"If I can find a way to reduce the burden of leaving my car at the airport and make it profitable, I'm game," says Denegre, an independent film producer from San Francisco. Even though no one rented his car, he didn't pay a dime to park. "To me, the convenience is amazing."

But city officials have another word for it: illegal. In a lawsuit filed earlier this year, the San Francisco city attorney's office said that FlightCar is running an "unlawful and unfair operation." It says that the company, which is part rental car company, part parking lot catering operation, lacks the necessary permits to do business at the airport.

The office is seeking unspecified damages and penalties of up to $2,500 per violation.

FlightCar is just the latest travel-related "sharing" company to run afoul of the law. Earlier this year, a judge ruled that a New York rental offered through Airbnb, a website that lets homeowners offer their residences as temporary rentals, violated a 2010 law that bans apartment residents from renting their spaces for less than 30 days.

Airbnb has promised to support an appeal of the ruling.

Taken together, these court challenges raise a bigger question: When it comes to travel, is sharing always the safe - or even the right - choice? Airbnb and FlightCar are just two outliers in the $3.5-billion-a-year "sharing" economy, which includes both travel businesses such as Zipcar, which rents cars in mostly urban areas and is owned by Avis Budget, and peer-to-peer car rental companies such as RelayRides, which already operates at more than 170 airports nationwide.

A FlightCar representative says that the answer is obvious: The park-and-rent choice is not only safe, but it's also the future. The company has received "overwhelming" support from the community since being sued by San Francisco, with its listings rising from 1,000 to 1,400 between mid-May and mid-June. It also expects to prevail in court later this summer, because the company claims that it isn't subject to the same regulations as a traditional rental car company.

"We are operating within existing city and airport regulations," says Rujul Zaparde, FlightCar's chief executive. "People seem to understand that FlightCar is creating jobs and contributing income to the city and that this dispute is purely about the airport wanting more money. We are disrupting two industries that haven't changed in decades, so we expect challenges like these."

(Christopher Elliott is the author of "Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals" (Wiley). He's also the ombudsman for National Geographic Traveler magazine and the co-founder of the Consumer Travel Alliance, a nonprofit organization that advocates for travelers. Read more tips on his blog, or e-mail him at [email protected]. Christopher Elliott receives a great deal of reader mail, and though he answers them as quickly as possible, your story may not be published for several months because of a backlog of cases.)