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HB 2559 Aims to further expand Arizona’s sharing economy

February 25, 2019

Arizona’s sharing economy has become a beacon for other states looking to embrace new and innovative technologies. Often labeled “industry disruptors,” sharing economy platforms such as Airbnb and Uber have revolutionized consumer choices in home-sharing and ride-sharing, respectively. Pioneering peer-to-peer services have presented stiff competition for entrenched industries such as taxi services, hotels, and now rental car companies. One such disruptor is a type of car sharing technology known as peer-to-peer car sharing. People are now using app-based car sharing services to make their personal vehicles available for short-term use to others. Think of it as Airbnb for cars.

Like home-sharing, car sharing has become increasingly popular thanks to new technologies – and it has faced the same strong opposition from its existing competitors. Traditional service providers, including car rental companies, are pushing for the legislature to tax peer-to-peer car sharing services in the same way car rental companies are taxed. However, car rental companies do not pay sales tax on their fleet vehicles, while individuals buying a new car and using peer-to-peer car sharing services pay both sales tax at the purchase of their car and a yearly vehicle licensing tax.

Existing competitors made the very same arguments a few years ago when Uber and Lyft legislation was being considered in Arizona. Supporters of car sharing have the same reply – protectionist behaviors from traditional service providers are not a good reason to box out competition. Ultimately, it’s the consumers who win when more options are provided. These services are not just for city users, either. Users in rural communities can use peer-to-peer car sharing technology to buy groceries or go to doctor’s appointments. This is especially useful for people who cannot afford a car of their own.

There is a better way. Representative Travis Grantham’s HB 2559 will open Arizona to peer-to-peer car sharing by:

  • Establishing a peer-to-peer car sharing statute, recognizing that it is separate and apart from the rental car industry
  • Requires car sharing platforms to carry vehicle liability insurance
  • Gives airports the authority to negotiate with car-sharing platforms individually (the same precedent currently used with Uber and Lyft)

Indeed, several states have enacted legislation to foster, rather than to hamper, this new form of car sharing. Even California embraced this form of car sharing technology back in 2010, leaving Arizona behind in terms of its sharing-economy opportunities. The Arizona legislature should reject legislation that needlessly hinders new technologies and instead adopt HB 2559.

HB 2559 allows Arizona to continue to be a leader in the sharing economy and empowers people to make positive economic use of their private property.



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