Car Rental

California Peer to Peer Legal Framework

California has its own “manual” for Car Rental companies within its Civil Code. In the United States, California has taken the lead in terms of regulation.

California is one of the most advanced states when it comes to Car Rentals. California Civil Code § 1939 serves as a manual for all car rental companies, incumbent and independents on rentals, membership programs, liability and insurance products, charges, and more.

Does CCC § 1939 apply to car sharing or peer to peer rentals? It all comes down to interpretation.

Marketplaces, such as Turo and Getaround have insisted that they are not a car rental company, and that the hosts that own the vehicles should not be held to the same standards as car rental companies, as they otherwise share and not rent cars.

On the other hand, the American Car Rental Association (ACRA) as well as the main national car rental brands (Enterprise, Avis, and Hertz) have stated their position. If a vehicle is provided by one person or entity to another in exchange for money, that constitutes a vehicle rental, even if it’s under a peer to peer concept.

Given the two different opinions above, the applicability to peer to peer transactions from CCC § 1939, as well as any other state or federal provision relevant to car rentals (including in California the recently passed AB391 and the California Vehicle Codes it repeals) would be open to interpretation by a judge or an authority. The current legal framework for peer to peer car sharing today is in the best of scenarios, ambiguous, if not nonexistent.

In our common law legal system, new law can and should be created based on pre existing law, case law, and common practices. Today, there is a lack of regulation and legal framework for the peer to peer car sharing industry.

Big efforts are being made by the marketplaces in this industry to lobby on behalf of the many industry players at both, federal and state levels to create a framework for an incipient industry and business model. Big efforts are also being driven by the traditional car rental industry to ensure that a leveled play field is kept while new laws are proposed and enacted.

When it comes to creating a legal framework for a new industry, all players must be properly included and represented. Mango Strategic Ventures supports and promoted the creation of a new Assembly Bill in California that would serve, in just and fair image of CCC § 1939, as the guidelines in California for both, the operation of peer to peer transactions, and as a rule book in the relationship between three parties, the guest or renter, the host or operator, and the marketplace or booking engine.

Contact us or the author for further information about getting involved in building the California Framework for the Peer to Peer Car Sharing Industry.

Carlos A. Bazan
On behalf of the Transportation Sharing Hosting community

The above information is not intended to, nor does it constitute legal advice. All information presented in this website is the result of investigative and journalistic job, and is for general informational purposes only. The presented information may not be up to date with the latest legal information. The reader should consult an attorney for for any advice with respect to any particular legal matter. No person or entity should act or refrain from acting based on the information presented in this site. Use or access to the information presented in this site does not create any client-attorney relationship. The views expressed at, or through this site, are of the individual authors writing in their individual capacities, not those of Mango Strategic Ventures, Worldwide Leaders Grid, or any parent, holding, subsidiary, or affiliate party. The content provided in this posting is provided “as-is”, and no representation is made as of the accuracy or that the content is error-free.

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