Ever since I’ve been in Alaska, the pundits exclaim that we must figure out how to diversify our economy and find new ways for Alaskans to earn money. Today, I want to point out a prime example of why politics as usual works against economic diversification. To the contrary, as soon as we see a new industry arrive, politicians in Juneau immediately pounce with the heavy hand of government to tax, regulate and snuff out new opportunities. In this case, it’s because the legacy industry is threatened by competition.
I’m talking about an innovative, disruptive business model called peer-to-peer car sharing. I’ve got a car, you need a car. A slick app will connect us and we can make it happen for an agreed-upon price. Whoa, whoa, whoa — that’s way too simple an idea. Have Alaskans found a new way to make a few extra dollars off their idle vehicles?
As Alaska faces its toughest economic challenges in a generation, and while 7 million Americans are more than three months behind on their car payments, Alaskans have discovered peer-to-peer car sharing. App-based companies like Turo and others allow people to make their privately-owned vehicles available for anyone to reserve through an online marketplace. In turn, car-sharing guests now have a more affordable and convenient option than a traditional rental car company. And with $1 million in liability coverage, it seems like a win-win for everyone in Alaska.
Unfortunately, the big multi-billion dollar, multinational rental car industry doesn’t feel the same way. Rental car companies like Enterprise Rent-A-Car are backing a bill, House Bill 102, in Juneau that would force the peer-to-peer platforms and their car owners to be treated like a rental car company, essentially gutting the entire idea.
With HB 102, the rental car industry puts forth regulations for a competing industry, the one that it views as its biggest threat. Common sense public policy suggests that lawmakers reach out to and work with stakeholders affected by new laws. Yet the Alaska Legislature is allowing these legacy companies to dictate the rules of the road for an industry they simply don’t want to exist.
Alaska is just Enterprise Rent-A-Car’s most recent playground to strong arm policymakers into preserving their tremendous market dominance — with over 30 similar attempts in other states in the last two years. Enterprise hopes that by enacting HB 102 it will kill the competition and end the threat to its current 56 percent market share. It has the money. It has the connections. But Enterprise is wrong on the issue.
If the state of Alaska wants to put the rules of the road in place for peer-to-peer car sharing, they should work with the participants in that industry — and not the one wanting to wipe it out. Enterprise Rent-A-Car is doing all that they can to stifle innovation, but it’s Alaskans who will end up losing.
Peer-to-peer car sharing is providing economic opportunity for over 700 Alaskans. The average Alaskan host on Turo can make about $300 per month and 1 in 5 Turo hosts are veterans or active military members, many of whom list their vehicles while they’re deployed. We shouldn’t take this opportunity away before it even has a chance to take off.
Please reject HB 102 and invite the peer-to-peer car sharing industry to discuss a proper regulatory framework, without the rental car industry at the table. Let the “Last Frontier” be a voice for technological innovation and economic diversification.
• Erik Scholl lives in Juneau.