In the latest salvo in the town's growing feud with Turo, the giant online car-sharing platform, Nantucket Memorial Airport has issued a cease and desist letter to the San Francisco-based company.
Citing a significant financial hit suffered by the airport's three existing car rental companies due to Turo's growing presence and the lack of a formal agreement with the company, airport manager Noah Karberg disclosed the cease and desist order during Wednesday night's Select Board meeting.
The letter, addressed to Turo's head of airport partnerships, emphasized that the company is facilitating car rentals at the airport without permission. Nantucket Memorial Airport is a municipal facility owned by the town that operates as an enterprise fund.
"Since Turo and its hosts have not received authorization by the Airport to operate as of the date of this letter, its activities at the Airport are considered an unlawful trespass for which Turo may be considered responsible," Karberg wrote to Turo's Sean Mayo in the correspondence dated Dec. 1.
The letter was just the latest development in the town's dispute with Turo that began earlier this year when a formal complaint regarding “illegal car rentals” was submitted to the Select Board over the summer by an attorney representing two of the island’s largest rental car businesses: Nantucket Rent-A-Car and Affordable Rentals. The basis for the complaint is a section of the town code - Chapter 58 - which governs rental cars on Nantucket through a medallion system and caps the number of rentals at 700 for the entire island. The regulations require companies to obtain a medallion from the town for each rental car they are operating and establish a fine of $300 per day for any violations.
Attorney John Perten, who represents Nantucket Rent-A-Car and Affordable Rentals, submitted a list to the town of more than 150 individuals renting vehicles through Turo, along with the names of four small rental car companies, alleging they are all renting cars on Nantucket illegally without medallions.
Since September, when the Select Board first publicly discussed the complaint, the Nantucket Police Department has cracked down on the rental car companies operating without medallions but stopped short of going after individual Turo hosts renting their vehicles on Nantucket.
Karberg told the Select Board on Wednesday that the three “brick-and-mortar” rental car operators at the airport - Hertz, Nantucket Island Rent-A-Car, and Windmill Auto - had been significantly impacted by Turo. From April through October, Karberg said, gross revenue from rental cars at the airport was down nearly $800,000 based on 7,000 fewer rental days, a 17 percent drop from prior years.
"My concern is for the continued viability of my incumbent rental car operators," Karberg said. "While airport revenue is a consideration, more important to me is their continued viability as a traditional brick-and-mortar business operating in the terminal and providing a high level of customer service, and being my teammate in the airport's mission to provide a safe and efficient passenger experience."
Despite the cease and desist letter it issued to Turo on Dec. 1, the airport suggested that it was willing to negotiate a formal agreement with the company that would allow its hosts to continue operating at the transportation hub. But that would only be possible if Turo comes to terms with the Select Board regarding its compliance with the existing town bylaw.
"The Commission hopes and expects to find mutually agreeable terms by which Turo can operate at the Airport. However, before entering into such an agreement, Turo must resolve its standing with the Town of Nantucket concerning Chapter 58," Karberg wrote. "Until that resolution is accomplished, the Commission demands that Turo cease facilitating car rentals on the premises of the Airport."
Chapter 58 of the Nantucket town code was adopted in 1988, well before the widespread use of the internet and decades before the creation of car-sharing sites like Turo.
Town manager Libby Gibson told the Select Board on Wednesday that she had instructed the town's law firm, KP Law, to work on the issue. And while town counsel Brian Riley told the board that he had developed a proposal that could clarify the existing Nantucket bylaw to ensure it explicitly covers Turo and other car-sharing operations, he expressed reservations regarding enforcement, and if it would hold up in court.
"It does give me pause about trying to apply this to Turo itself, and perhaps even more so, to an individual who may be using Turo or has an account with Turo to make their car available to a patron on the other side to rent," Riley said. "Does it make that individual a car rental agency? I have my doubts on that and real doubts about whether the town tried to enforce it against individuals with accounts on Turo and started giving them tickets or trying a cease and desist. I don’t have a lot of confidence that a court would agree that people aren’t allowed to use Turo even though the town has this bylaw. I might be wrong, you never know what’s going to happen in court, but I’m not sure people in that status would be held to be a rental agency...We could send a letter to Turo and tell them the whole operation is in violation of the bylaw and please stop doing it. But my guess is, for a relatively small town in Massachusetts, Turo is not going to pay much attention to that."
Even so, Select Board member Matt Fee was adamant that the town should attempt to crack down on individual Turo hosts, emphasizing that they were operating in direct violation of the town bylaw that requires anyone renting a car to have a town-issued medallion.
"I think we should attempt to do what town counsel is suggesting and tighten our regulation so that they are considered bound by Chapter 58," Fee said. At the time the bylaw was adopted in 1988, "I don’t think anyone assumed that you would share your car. No one assumed that...Just because you want to call it something different doesn't make it something different."
Meanwhile, the town is also addressing a citizen petition from Rebecca McCrensky, the owner of one of the vehicle rental companies that had been operating without medallions and was shut down by the police department.
McCrensky is sponsoring a warrant article she calls "equal access to rental vehicle medallions for new local small businesses and Nantucket residents." The warrant article would amend Chap. 58 to prohibit any person, business or corporation from holding more than 20 percent of the total available medallions, add 300 new medallions over the next three years, and require unused medallions to be returned to the town and made available to others.
"The proposed limit would enable new market entrants to run a legally compliant business and provide a pathway for innovation in what is currently a blocked industry on island," McCrensky wrote in her article submission to the town clerk.