Car Rental Startup Fined for Several Violations
Jane Lu
· 3 min read
The gig and sharing economy has revolutionized several industries. In recent years, this expanded into
car rentals
. While rideshare companies
like Uber and Lyft are quite ubiquitous, renting cars from other individuals is a bit newer. Getaround is one of the most well-known peer-to-peer car rental companies. The company has been mostly successful, but they ran into some legal trouble in Washington, D.C. Here’s what you need to know about the regulations that the company has reportedly violated and the issues that users have with Getaround.
What is Getaround?
Getaround could be described as an Airbnb for cars. Owners can rent out cars they aren’t using on Getaround's app. The concept has been popular since the company's inception. Getaround was the winner of TechCrunch's Startup Battlefield Disrupt in 2011, as reported by
TechCrunch
. Much like Airbnb, the company faces potential liability issues. How does the company handle stolen or damaged vehicles? Are they subject to the same regulations as traditional car rental companies? These issues are related to the recent fine that Getaround received.
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Why was Getaround fined?
MORE: Rental Car Insurance: How Does it Work?
Getaround was fined $950,000 by the D.C. Office of the Attorney General (OAG) for operating without a license and other violations, as reported by TechCrunch. The company reportedly misrepresented its service and misled car owners about its safety features.
The fine is part of a settlement agreement, and the company will also have to implement other changes. This includes paying restitution to customers whose vehicles were stolen or damaged.
Attorney General Karl Racine said, "Gig economy companies must abide by the same rules as their brick-and-mortar counterparts." He added that "They must provide clear and accurate information to consumers, especially about the safety of their services, and they must pay their fair share of taxes like everyone else does."
Getaround agreed to the settlement under an "assurance of voluntary compliance." This means the company doesn't admit any guilt.
How is Getaround potentially misleading consumers?
One of the most serious allegations against Getaround is that the company is misleading consumers. The OAG said that the company had no written policy for complaints regarding theft or vehicle damage. Additionally, users were unable to report safety issues on specific vehicles.
Getaround also failed to disclose the safety limitations on its "Enhanced Security" software feature. This software is meant to immobilize vehicles that aren’t being used. The feature has limitations that car owners and customers weren’t told about.
The OAG claims that Getaround created fake owner profiles. The company has its own fleet of vehicles available for rent. But on the app, they were listed as having private car owners. The company must now disclose its fleet cars clearly in its listings.
A Getaround spokesperson told TechCrunch that the company "categorically disagrees" with the allegations. They added that "the company took immediate corrective action" for safety shortfalls.
If you’re thinking of listing your car on Getaround or a similar app, you’ll want to make sure it’s properly insured. It’s a good idea to research the company’s terms and conditions for insurance coverage.
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