80 Cal.App.5th 517
Cal. Ct. App.2022Background
- Turo operates an online peer-to-peer platform where private vehicle owners list passenger cars and third parties rent those specific cars; Turo processes bookings and payments and takes a percentage.
- Turo does not own, lease, or possess the vehicles listed; its terms of service, insurance offerings, and "vehicle protection options" apply contractually between Turo, owners (hosts), and renters (guests).
- The City and the People (via San Francisco City Attorney) sued, alleging Turo operated a rental car business at San Francisco International Airport (SFO) without required permits and fees, and sought enforcement under Government Code § 50474.1.
- Turo cross-complained seeking a declaratory judgment that it is not a "rental car company" under California law; the trial court granted summary adjudication for the City/People that Turo was a rental car company.
- On de novo review, the Court of Appeal interpreted statutory definitions (Civil Code § 1939.01; Vehicle Code § 11752; Insurance Code § 1758.89) requiring a rental company to be "in the business of renting passenger vehicles to the public," and concluded that "renting" as used in those statutes implies ownership or control of the vehicles rented.
- The court reversed: Turo is not a "rental car company" for purposes of Govt. Code § 50474.1, because it does not own or control the vehicles it lists; the writ of mandate was granted and the trial court's summary adjudication was vacated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Turo is a "rental car company" (i.e., "in the business of renting passenger vehicles to the public") for purposes of Gov. Code § 50474.1 | Turo is in the business of renting because it facilitates rentals, processes payments, derives revenue from rental transactions, advertises rentals, and competes with traditional rental companies | Turo does not rent vehicles because it does not own, possess, or control the cars and cannot grant possession/enjoyment; it merely facilitates transactions between owners and renters | Court held Turo is not a rental car company: statutory definitions and related provisions presume ownership or control of vehicles rented, so a company that only facilitates rentals of third-party-owned cars does not qualify |
Key Cases Cited
- MacIsaac v. Waste Management Collection & Recycling, Inc., 134 Cal.App.4th 1076 (statutory interpretation and de novo review authority)
- Skidgel v. California Unemployment Ins. Appeals Bd., 12 Cal.5th 1 (use statutes' plain language to ascertain legislative intent)
- People v. Cole, 38 Cal.4th 964 (harmonize statutory provisions and apply plain meaning)
- Wasatch Property Management v. Degrate, 35 Cal.4th 1111 (use dictionary meanings to ascertain ordinary meaning)
- Sentry Select Ins. Co. v. Fidelity & Guaranty Ins. Co., 46 Cal.4th 204 (discusses being "in the business of renting" and treats ownership/control of vehicles as central)
- Village of Bedford Park v. Expedia, Inc., 876 F.3d 296 (online intermediary not "in the business of renting" hotel rooms because it does not own or control them)
- Travelers Indemnity Co. v. Maryland Casualty Co., 41 Cal.App.4th 1538 (cases treating rental activity as tied to ownership/control of vehicles)
- Philadelphia Indemnity Insurance Co. v. Montes-Harris, 40 Cal.4th 151 (distinguishing insurance obligations tied to rental transactions)