The change in law will open up a potentially lucrative market, especially in New York City, which has the lowest rate of passenger car ownership in U.S. cities (although this rate has increased slightly since the arrival of Covid-19 in 2020).
“You take the number of people living in the city, compounded by the number of people who need cars, and it’s a really exciting market for us,” said Patrick Notti, vice president of market and operations at Getaround.
Turo and Getaround were driven by shortages and price increases in the traditional rental car market, which some have dubbed the “apocalypse car rental. “
New Yorkers “have faced the worst traditional car rental experience in the country,” Turo CEO Andre Haddad said in a statement welcoming Hochul’s signing of the bill.
None of the startups own the vehicles they lease, acting more like a marketplace. Vehicle owners register through the app or website; transactions are facilitated by a contactless process where cars are automatically unlocked for renters via their phones.
Turo and Getaround already have active cars in the city and elsewhere in New York City, but they must be operated by commercial rental companies or have a commercial insurance plan.
State regulators will complete some rules about the business in the coming months, including how rents will be taxed. Turo hopes to be up and running by the summer, a spokesperson said.
Turo first arrived in New York City as RelayRides, but in 2014 was ordered to cease operations and $ 200,000 fine by the State Department of Financial Services. Regulators said the company broke insurance and advertising laws.
Turo has raised just under $ 470 million from a list of investors that includes IAC and Kleiner Perkins. Getaround is backed by Softbank and has raised $ 570 million, according to figures from Crunchbase.
The state bill signed by Hochul was sponsored by State Senator Neil Breslin, a Democrat representing parts of Albany, and former Harlem Assembly Member Robert Rodriguez, who was appointed in November as Secretary of State for Hochul.
Get the green light
Separated from Airbnb-style carpooling, Zipcar has been offering short-term rental cars through carpooling in the city for more than a decade.
The city’s Transportation Department recently expanded a program that offered 300 designated parking spaces for Zipcar vehicles, concentrated in low- and moderate-income neighborhoods that had previously seen limited car-sharing options. A report on the program, which launched in 2018 , found that it increased the overall diversity among Zipcar users and that carsharing reduced the number of kilometers traveled by vehicle by about 7% among its users.
The upfront costs of owning a private vehicle encourage car use, the report says, while the pay-per-ride ridesharing model forces users to weigh the cost of each ride against other options. , such as public transport or cycling.
Transportation experts hope peer-to-peer companies add another option for the last mile of travel in areas where transit options are limited.
“Carsharing is a proven way to reduce the number of cars and the kilometers traveled by vehicles,” said Felicia Park-Rogers, director of regional infrastructure projects at the Tri-State Transportation Campaign. “They make cars something you access occasionally instead of having to own them for the brief periods that you need them.”
The challenges for the programs, Park-Rogers added, will be to raise awareness and ensure that cars are available throughout the city and not just in the richer and more densely populated areas.
Getaround has a list of local car owners interested in signing up, Notti said, and will work with local garages in the coming weeks to install the necessary equipment for its contactless transactions.
“We’ve spent many years figuring out how to do this right,” Notti said. “In many ways, we were just waiting for the green light to develop. “
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