Bipartisan Sponsors of SB 2641 Defend Consumers, Call for Override of Governor's Amendatory Veto

SPRINGFIELD, Ill., Oct. 29, 2018 /PRNewswire/ -- A coalition of bipartisan lawmakers, Illinois car rental operators, consumer advocates, the American Car Rental Association and the Illinois Municipal League are calling on the General Assembly to override Gov. Bruce Rauner's amendatory veto of SB 2641. This legislation would extend common sense regulations to peer-to-peer car rental companies, which allow car owners to rent their personal vehicles to consumers.

Sponsored by Sen. Antonio Muñoz, D-Chicago, Rep. Arthur Turner, D-Chicago, and several Senate and House Republicans, SB 2641 would require peer-to-peer companies to abide by the same customer safety regulations and taxing structure as all other vehicle rental companies operating in Illinois. Because current law is unclear, peer-to-peer companies take the position that certain requirements – such as addressing recall notices – don't apply to them, putting renters and the public at risk.

"We have the opportunity in Illinois to set the standard for safety. Millions of vehicles across the nation are currently operating with unsolved safety recalls. Renting these vehicles out to customers creates hazards for everyone on the road," said Sen. Antonio Muñoz, a retired Chicago police officer.

Sally Greenberg, executive director of the National Consumers League, concurs: "Because peer-to-peer operators are facilitating commercial car rental transactions, they must be held to the same consumer protection standards as any other car rental or car-sharing service."

"This is all about protecting consumers," said Sharky Laguana, founder and chief executive officer of Bandago, a national van rental company with a branch in Chicago, and board member of the American Car Rental Association.  "No matter where someone rents a vehicle, they deserve transparent pricing, peace of mind that it was inspected for safety, and the promise that someone will be there to help should something go wrong."

The legislation would also require peer-to-peer rental services to collect and remit the same taxes as other vehicle rental companies, which they are currently circumventing even though vehicles on their platforms contribute to congestion and roadway wear and tear. While peer-to-peer companies market themselves as a way for individual car owners to make ends meet by renting out their personal vehicles, some have fleets consisting of a dozen or more vehicles.

"State government plays an important role in fostering a fair and competitive environment for the benefit of consumers, including their safety and use of tax payer dollars. Today, peer-to-peer companies use taxpayer-funded public facilities without contributing to the infrastructure. Consumers benefit most when we all contribute our fair share," said Jim East, vice president of government relations for Hertz Corporation.

Further, peer-to-peer rental services try to claim they should not be subject to these regulations because they do not operate like other car rental companies. However, these companies' platforms are centered on renting out vehicles to consumers. In fact, nearly all car rental companies use digital platforms to facilitate transactions online, which is why it doesn't make sense for peer-to-peer companies to demand tax breaks and special exemptions.

"I voted in favor of this legislation last spring because I believe it will protect consumers and includes important safety measures," said Sen. Sue Rezin, R-Morris, a co-sponsor. "My position has not changed."

The Governor's veto of this legislation creates an entirely separate legal framework for peer-to-peer companies. It also pre-empts local control and prevents government bodies from collecting the optional 1 percent local car rental tax from peer-to-peer companies. Preventing municipalities from collecting local sales taxes on peer-to-peer rentals means communities across the state will go without revenue that funds crucial services and programs for residents.

"Municipalities have watched their funds be depleted in recent years, which is why it is imperative that the state not prevent them from collecting this revenue, particularly since it falls in line with industries already being taxed," said Brad Cole, executive director of the Illinois Municipal League.

The legislation would also require peer-to-peer companies to provide consumers with a detailed account of costs upfront, instead of promising low rates at the outset only to leave customers with sticker shock from hidden fees.

"We believe in competition, but this issue simply should not be left to chance," said Jeff Wilder, vice president and general manager of Enterprise Holdings of Chicago. "Peer-to-peer companies should join us and work together to ensure greater consistency, fairness and safety on behalf of the entire industry."

SOURCE American Car Rental Association