Saturday, June 29, 2013

So much for free enterprise...

Teens Start Rental Car Company That Undercuts Avis And Hertz. Get Sued By City Of San Francisco For “Unfair Business Practices.”

Said three teenagers to themselves last year: “Yeah, sure, we could go to college. But wouldn’t it be more fun to up-end the airport rental car business?”

They opted for the latter.

So positive were they that they had happened on a better business model than Hertz or Avis, that they turned their backs, respectively, on Harvard, Princeton and MIT — the three institutions to which they had gained (or been offered) admission.

The idea was this: At every major airport, acres of cars sit idle, left parked by owners who have jetted off. Why couldn’t these same cars be rented to arriving travelers? Rates could be dramatically cheaper than those charged by traditional car rental companies, since, under this model, the rental company wouldn’t have to pay for or maintain the fleet.

Owners would have a fourfold incentive to participate: free parking, a free car wash, a cut of the rental fee and a guarantee their car would be waiting for them when they returned…

How Flight Car Works:

…Foes of FlightCar, however, have started to shoot back.

It’s easy to see how traditional rental companies might not be amused to have their prices undercut. But San Francisco International is crying foul, as well.

Doug Yakel, public information officer for SFO, tells ABC News that FlightCar refuses to play by the rules that govern other rental car companies. It doesn’t pay the same fees, he says, and it doesn’t abide by the same regulations…

…For example, SFO wants FlightCar to pay it 10 percent of its gross profit and a $20 fee for each rental car transaction — the same as what the airport gets from every other rental car company.

The fact that FlightCar operates from a base outside airport property, Yakel says, makes no difference: SFO has three other rental companies that also operate off-property. According to the complaint, those three paid SFO over $2 million in fees in 2012. FlightCar, too, should pay, thinks Yakel…


No comments:

Post a Comment