SFO fires legal salvo at transportation startup 

click to enlarge FlightCar
  • Mike Koozmin/The S.F. Examiner
  • Co-founder Kevin Petrovic says FlightCar, which allows drivers to rent out their cars while they're traveling, shouldn't be subject to the same rules as car-rental companies.

San Francisco has filed a lawsuit against a ridesharing company operating at the airport — the latest conflict involving businesses operating in the emerging "sharing economy."

In April, FlightCar was one of six ridesharing and car-sharing companies hit with a cease-and-desist order by San Francisco International Airport, which claimed the new businesses were not regulated and hadn't followed through with the permitting process at the airport. FlightCar continued its normal operations, and after issuing two more cease-and-desist orders, the airport decided to move forward with a lawsuit, according to SFO spokesman Doug Yakel.

Yakel said FlightCar was the first company SFO targeted with a cease-and-desist order, and the business had the most opportunities to comply with its regulations. He also said FlightCar clearly acted as a rental car company and not a ridesharing business.

FlightCar, a Santa Clara-based company, allows travelers at SFO to rent out their cars while they're away from the Bay Area. With a garage in Burlingame, FlightCar arranges for vehicle owners to park their vehicles, which are subsequently rented out to travelers in need of a car. Reservations and accommodations — the company offers free rides between its garage and the airport — are all made though smartphone applications.

SFO's lawsuit, filed by San Francisco City Attorney Dennis Herrera, asserts that even though it's off-site from the airport, FlightCar must pay the requisite fees that other rental car companies face. By ducking fees and permits, FlightCar has an unfair cost advantage over its regulated competitors, the suit alleges.

The airport and the company differ on what kind of service is provided by FlightCar, according to Kevin Petrovic, one of the company's founders. Petrovic considers the company a ridesharing company because it doesn't own any of its vehicles and is unable to advertise at the airport.

Petrovic said the company will continue to operate as normal, despite the lawsuit and the cease-and-desist order. He said FlightCar is in talks with the airport and is hopeful that an agreement can be reached. That could potentially include the company agreeing to some sort of fee structure.

"We don't anticipate needing to change our operations," Petrovic said. "We plan on reaching a resolution with the airport, either in an amicable manner, or if need be, in the legal arena."

The California Public Utilities Commission — which regulates ridesharing companies — first issued cease-and-desist orders against companies including Lyft, Sidecar and Uber in August. The orders were temporarily lifted while the state agency reviews the companies' operations.

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Will Reisman

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