In the past, we have discussed how even a free-market-oriented state like Utah, which prides itself on being a safe harbor for businesses and supportive of innovative and forward-thinking business models, may be failing to live up to the claim. Countless entrepreneurs have experienced run-ins within regulators while trying to do something unique and different.
Historically, companies like Uber, Lyft, Zenefits, Airbnb, Tesla have all had issues in the state when looking to expand their businesses because it was different. The latest example now lies with the Salt Lake City airport and a small peer-to-peer car-sharing company, Avail.
The company launched in Utah in 2019, and similar to Turo, offered a product where travelers could rent out their car while they were not using it to people in need of a car for what was cheaper than a traditional car rental company. Even if the owner of the car did not make any money, at the very least, the car owner could return back from travel with their car cleaned as part of the service and not having to pay a parking fee had they left their car in the airport parking lot. The company partnered with a commercial airport parking and shuttle company to ensure that the model could work.
However, the Salt Lake City Airport did not like this new innovative business model and put an end to Avail’s business May 23 when it required that parking and shuttle service providers stop working with third parties, including peer-to-peer services. This essentially shut down Avail’s ability to operate as a company. The airport undermined their business model and also left many customers scrambling to find last-minute solutions to a problem.
Whenever a new good or service is introduced, there is always going to be a desire to want to control it. The airport wanted Avail to sign a car rental company agreement with them and also pay a 10% fee-sharing agreement. The airport also acknowledges that it is trying to protect its interests, citing the existing car rental companies that have agreements with the airport and that they’re “always looking to preserve their revenue stream.”
For Avail, such an agreement would be mischaracterizing the company and its business model. They do not own the cars — the people on their platform do, and they leverage the platform to offload an asset that is not being used. It is a different and cheaper approach and runs against the traditional model of car rental companies. The airport, when it was redesigned, had an opportunity to construct a facility that would represent the future economy and, instead, elected to go with infrastructure that represented the airports of years past rather than embracing a more forward-looking model that reflects a changing economy.
Representative Robert Spendlove is determined to look for a fair solution to all parties involved. He is working on a bill to be considered this upcoming year that addresses these issues. We look forward to seeing what ideas the Representative comes up with and hope for a solution that embraces innovative ideas and different business models.
