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Car-sharing showdown

Tuesday, Nov 13, 2018 - Posted by Rich Miller

* Well, that’s one way of looking at it

On Tuesday, lawmakers turn their attention to Springfield for a veto session taking up bills the governor rejected over the summer. One of those is a bipartisan measure extending regulations for car-sharing operators like Turo. The bill would impose regulations similar to those in place for rental-car companies. A source close to lobbying efforts says an override of that bill is expected when the veto session starts.

What it would mean: Lawmakers on both sides are ready to move on without Rauner. This car-sharing bill is an easy first step for Democrats and Republicans as they feel out their new world with a Democrat moving into the governor’s seat. The bill addresses bipartisan ideals: consumer protection and taxation. An override could signal trouble for Rauner on more controversial measures as D’s and R’s start feeling comfortable seeing eye-to-eye on things while the governor operates in lame duck status.

I didn’t realize Politico was selling content ads.

* Hinz

The battle pits Turo and other “ride-sharing” companies—which allow private-car owners to lease their vehicles via a phone app—against Enterprise, Hertz and other firms that rent their own vehicles under regulations and taxation set by the government.

Involved on one side or the other are many of the Capitol’s best-known lobbyists. Included: former gubernatorial campaign manager Chip Englander, former Chicago governmental relations chief Victor Reyes, recently retired state Sen. Pam Althoff and Bob Uhe, the longtime chief counsel to House Speaker Mike Madigan.

Enterprise won the first round in the spring, when lawmakers approved a bill unveiled late in the session to effectively require both sets of companies to be treated the same under the law. The ride-sharers struck back when Gov. Bruce Rauner used his amendatory veto to rewrite the bill, saying the state should not “unintentionally smother” a growing business.

Lawmakers now will decide who wins. Bill advocates appear to have a strong hand to play in the House, which approved the bill in the spring with 78 “aye” votes (71 are needed for an override), but advocates will need to pick up a couple of votes in the Senate if they are to win.

Enterprise argues that traditional firms are at a disadvantage competing against private-owned vehicles that do not face the same regulatory and taxation costs, such as airport access fees.

* Just about every contract lobster in the building is working this bill. And you know things are high stakes when you see oppo

Last spring, then-state Sen. Pam Althoff voted for a bill backed by Enterprise and other rental car companies to impose regulations and taxes on car-sharing services that are gaining popularity, especially with young adults.

Althoff, a McHenry County Republican, was one of the sponsors of the measure, which passed the General Assembly at the end of May but was vetoed Aug. 28 by Gov. Bruce Rauner, who said it would “squelch” progress and innovation.

Althoff left the Illinois Legislature a month later, resigning after more than 15 years, and soon registered as a Springfield lobbyist. Among her first clients? Enterprise.

* Press release from Turo and Getaround, both of which opposed the original bill and supported the governor’s veto…

Enterprise Rent-A-Car is one corporation urging Legislators to override Gov. Bruce Rauner’s veto of a bill that would triple-tax anyone using online peer-to-peer networks to share their car through services like Turo and Getaround. Those residents pay a 6.25% sales tax when they purchase their car. They also pay 4.95% in income taxes on any money they make while sharing their car with others. Now, companies like Enterprise want them to also pay a 5% state tax and upwards of 15% in local taxes each time they share their vehicle.

Rental car companies, meanwhile, are exempt from paying any sales taxes when they purchase their fleets of vehicles – an exemption that costs the State of Illinois nearly $200 million in lost tax revenue every year.

Senate Bill 2641 began as an innocuous bill which, in the final days of the Spring 2018 session, was quietly gutted and replaced with language calling for new taxes. Amid heavy lobbying, it was approved with no public hearings and without testimony before a transportation committee. […]

Nearly 10,000 Illinois residents share their car on Turo and Getaround, making an average of $625 a month. Of those car owners, 96% have two or fewer cars on the platform. This bill suggests residents using car sharing services should pay higher combined taxes than large car rental corporations.

* Did you notice that part about how “96% have two or fewer cars on the platform”? That’s likely because of this problem in Chicago

On the 4700 block of north Kenmore Avenue, in the heart of Chicago’s Uptown neighborhood sits a collection of cars all owned by “Michael O.” — the city’s most successful auto lender on car-sharing platform Turo.

Michael O., who is actually Michael Anthony Oates, according to city paperwork, owns as many as 40 vehicles that he leases out for short-term stints using Turo, a Silicon Valley-based startup that promotes itself as the future of the car rental industry, just as Airbnb has disrupted the hotel and motel industry. […]

Oates’ fleet of mid-line vehicles he rents out on Turo has caused major parking headaches in Uptown, where he parks a portion of his 40 vehicles on a street just two blocks away from the Aragon Ballroom and the Riviera Theatre, and where many residents struggled to find parking even before Oates’ cars showed up.

Ald. James Cappleman (46), who also lives on Kenmore, found out about Oates’ cars a little more than a year ago, when residents began to complain that lock boxes containing keys to the cars began showing up on fences outside of apartment buildings on the street.

* Press release from the bill’s original proponents who are pushing for an override

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. […]

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.

As noted above, the bill passed the House with a veto-proof majority, but it only received 34 votes in the Senate, which is two votes shy. Ten members didn’t vote and seven voted “Present,” so it looks like there’s room for improvement.


  1. - Fav human - Tuesday, Nov 13, 18 @ 10:40 am:

    So if somebody puts a lockbox on my fence can’t I just cut it off??

  2. - wordslinger - Tuesday, Nov 13, 18 @ 10:46 am:

    –Oates’ fleet of mid-line vehicles he rents out on Turo has caused major parking headaches in Uptown, where he parks a portion of his 40 vehicles on a street just two blocks away from the Aragon Ballroom and the Riviera Theatre, and where many residents struggled to find parking even before Oates’ cars showed up.–

    How the heck does he get away with that? No meters or residential permits? Does he have George Costanza moving them throughout the day?

  3. - Cheryl44 - Tuesday, Nov 13, 18 @ 10:48 am:

    I used to use I-Go for the occasional Target/Jewel run when I needed to stock up on stuff. Then Enterprise bought it and shut it down. I haven’t gone with any of the other ones because it’s gotten cheaper to have stuff delivered from Target or Jewel than it is to rent a car from a carshare or from a traditional car rental company.

  4. - lakeside - Tuesday, Nov 13, 18 @ 10:58 am:

    “caused major parking headaches in Uptown, where he parks a portion of his 40 vehicles on a street”

    Why can’t people just be cool? Why not take a second to think about the impact you have on your neighbors? How many perfectly fine ideas are ruined by people just being selfish jerks.

  5. - Anonymous - Tuesday, Nov 13, 18 @ 11:06 am:

    ==Why can’t people just be cool? Why not take a second to think about the impact you have on your neighbors? How many perfectly fine ideas are ruined by people just being selfish jerks.==

    I’d bet 75% of all rules are there because somebody, sometime, was a jerk who went too far and ruined it for everyone else.

  6. - JoanP - Tuesday, Nov 13, 18 @ 12:45 pm:

    @Fav human - read the article. He was told to cut it out, so he moved the lockboxes to the cars’ wheel wells.

    @wordslinger - there won’t be meters if it’s a residential neighborhood. While residential parking permits are a PITA, I wouldn’t be surprised if the residents request that now. So, of course, dude will just find another residential street on which to park. This needs a more robust solution.

  7. - Cheryl44 - Tuesday, Nov 13, 18 @ 12:54 pm:

    I would imagine Broadway is metered in Uptown, but yeah, they don’t meter side streets. Too many residents w/o off street parking.

    I live close enough to a major entertainment venue that my street has residential permit parking only on certain days. I haven’t heard anyone in the neighborhood complain about that.

  8. - Notorious RBG - Tuesday, Nov 13, 18 @ 1:12 pm:

    ==How the heck does he get away with that? No meters or residential permits? Does he have George Costanza moving them throughout the day?==

    I lived and/or worked in Uptown for years, and there were few if any parking restrictions around the Riv and Aaragon. I’ve been out of that area for almost 5 years, so it may have changed, but there were never any meters on Lawrence or Broadway, and the side streets were not zoned for residential parking.

  9. - UptownParker - Tuesday, Nov 13, 18 @ 6:36 pm:

    The street he is parking his car on has permit parking. He is buying permit parking for each car. Totally legal, totally jerk move.

  10. - Da Big Bad Wolf - Wednesday, Nov 14, 18 @ 5:25 am:

    So Michael O didn’t want that sweet deal rental car companies have, no sales taxes on fleets?

  11. - gadai bpkb - Tuesday, Nov 20, 18 @ 6:26 am:

    I am genuinely glad to read this weblog posts which consists of plenty of valuable data, thanks for providing these kinds of information.

Sorry, comments for this post are now closed.

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