FlightCar, a peer-to-peer car rental service for travelers, has relocated to South San Francisco following the expiration of its lease on a Millbrae parking lot last month. The company departs Millbrae amidst a flurry of litigation after the city revoked its conditional use permit, effectively forcing it to shut down its local operation.
FlightCar provides free parking to car owners bound for the airport at a nearby lot as long as they agree to let the startup rent their vehicles out while they are away. Cars are covered by a million dollar insurance policy during the rental period and get a free professional wash when they’re returned. Daily rates are available for renters, who are offered complimentary airport pickup.
The company has attracted roughly $6 million in venture capital from investors such as Airbnb CEO Brian Chesky. But like many of its peers in the so-called sharing economy, FlightCar’s seemingly simple business model has come into conflict with municipal regulations.
In a December lawsuit, the city of Millbrae alleged that FlightCar failed to pay parking taxes and flouted the terms and conditions of its use agreement, starting construction on the lot without a building permit, housing more cars and employees on the property than were allowed, and using a noisy and potentially hazardous generator to supply electricity. Several cars were also reportedly stolen by renters, requiring police intervention.
The Millbrae City Council voted to revoke FlightCar’s conditional use permit after numerous code violations were allegedly observed at the site, a former auto dealership at El Camino Real and Hermosa Avenue.
FlightCar co-founder Kevin Petrovic claims that the company made good-faith efforts to remedy the situation while contending with the challenges of managing a new and changing business.
“We were working as fast as we could on our end to get everything done,” said Petrovic. “We didn’t really know what the needs would be, how many customers there would be, how fast we would grow… Cities don’t like that.”
The startup was still ironing out final modifications at the 39-car Millbrae lot when it commenced operations in August, with up to 100 vehicles entering and exiting each day. At the time its permit was yanked in November, however, all the problems had been fixed, said Petrovic.
“The Planning Commission made its findings and determination despite the fact that the City admitted that FlightCar was at the time (and is currently) compliant with all conditions,” argued a company suit following the revocation.
But City Attorney Joan Cassman said businesses need to address any compliance concerns prior to beginning operations. “You go through the process with the planning commission and the city,” she said. “The city imposes terms and conditions and when you open your business you should be in compliance. You don’t just open the next day.” She declined to comment on the specifics of the ongoing litigation.
While FlightCar awaits the outcome of its claims for damages, it has decamped to an interim lot in South San Francisco. The company hopes to establish a permanent location there that can accommodate up to 140 cars, Petrovic said.