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Bipartisan Sponsors of SB 2641 Defend Consumers, Push to Override Governor’s Amendatory Veto 

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A coalition of bipartisan lawmakers, Illinois car rental operators, consumer advocates and the Illinois Municipal League called on the General Assembly to override Gov. Bruce Rauner’s amendatory veto of legislation to extend common sense regulations to peer-to-peer car rental companies.

Sponsored by Sen. Antonio Muñoz, Rep. Arthur Turner, and Rep. Grant Wehrli, SB 2641 would require peer-to-peer companies that allow car owners to rent their personal vehicles to consumers to abide by the same customer safety regulations and taxing structure as all other vehicle rental companies operating in Illinois. Because current law is unclear, peer-to-peer companies take the position that certain requirements – such as addressing recall notices – don’t apply to them, putting renters and the public at risk.

“We have the opportunity in Illinois to set the standard for safety. Millions of vehicles across the nation currently are operating with unsolved safety recalls. Renting these vehicles out to customers creates hazards for everyone on the road,” said Sen. Antonio Muñoz, a retired Chicago police officer.

“All car rental companies should be held to the same safety and transparency standards to best protect consumers,” said Greg Scott, government relations representative for the American Car Rental Association. “Customers deserve peace of mind, regardless of where they rent a car.”

The legislation also would require peer-to-peer rental services to collect and remit the same taxes as other vehicle rental companies, which they are currently circumventing even though vehicles on their platforms contribute to congestion and roadway wear and tear. While peer-to-peer companies market themselves as a way for individual car owners to make ends meet by renting out their personal vehicles, some have fleets consisting of a dozen or more vehicles.

“State government plays an important role in fostering a fair and competitive environment for the benefit of consumers, including their safety and use of taxpayer dollars. Today, peer-to-peer companies use taxpayer-funded public facilities without contributing to the infrastructure. Consumers benefit most when we all contribute our fair share,” said Jim East, vice president of government relations for Hertz Corporation.

Further, peer-to-peer rental services try to claim they should not be subject to these regulations because they do not operate like other car rental companies. However, these companies’ platforms are centered on renting vehicles to consumers. In fact, nearly all car rental companies use digital platforms to facilitate transactions online, which is why it doesn’t make sense for peer-to-peer companies to demand tax breaks and special exemptions.

“Government should not pick winners and losers. Fair and limited regulation results in a competitive business climate but, under the current system, peer-to-peer companies have an unfair advantage. This legislation would level the playing field while also decreasing the financial burden on local citizens and businesses,” said Rep. Wehrli.

The Governor’s veto of this legislation creates an entirely separate legal framework for peer-to-peer companies. It also pre-empts local control and prevents government bodies from collecting the optional one percent local car rental tax from peer-to-peer companies. Preventing municipalities from collecting local sales taxes on peer-to-peer rentals means communities across the state will go without revenue that funds crucial services and programs for residents.

“Municipalities have watched their funds be depleted in recent years, which is why it is imperative the state not prevent them from collecting this revenue, particularly since it falls in line with industries already being taxed,” said Brad Cole, executive director of the Illinois Municipal League.

The legislation also would require peer-to-peer companies to provide consumers with a detailed account of costs upfront, instead of promising low rates at the outset, only to leave customers with sticker shock from hidden fees.

“We believe in competition, but this issue simply should not be left to chance,” said Jeff Wilder, vice president and general manager of Enterprise Holdings of Chicago. “Peer-to-peer companies should join us and work together to ensure greater consistency, fairness and safety on behalf of the entire industry.”

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