Senate bill would strike car-sharing startups with new taxes, regulations

Senate bill would strike car-sharing startups with new taxes, regulations

With lobbyist backing, lawmakers passed a bill in May aimed at driving out competitors for rental car companies. Gov. Bruce Rauner rejected the bill, but lawmakers could revive it during veto session.

A rejected Senate bill that would have given traditional car rental companies an advantage over car-sharing startups has re-entered lawmakers’ itinerary.

State lawmakers reconvened Nov. 13 for veto session, during which they have the opportunity to override Gov. Bruce Rauner’s veto on a number of bills.

One of the bills marked on Springfield’s veto session calendar is Senate Bill 2641, a proposal that would have imposed new taxes and regulations on peer-to-peer car-sharing services, such as Turo and Getaround, which allow users to rent out their personal cars.

The bill would reclassify those companies as traditional car rental services, subjecting them to the same taxes and regulations as traditional companies. This would come on top of the taxes that already apply to car-sharing companies, but from which traditional companies are exempt, giving the latter an unfair advantage.

Lawmakers had originally drafted SB 2641 as a bill focused on liability laws in the car rental industry. But several additional amendments gave the bill a protectionist overhaul, bringing in provisions aimed at hobbling innovative competitors. Rauner issued an amendatory veto of the bill in August, stating that it would impede progress and innovation. The outgoing governor criticized the lack of transparency with which lawmakers advanced the bill, and proposed new regulations in his veto message more specific to car-sharing services.

SB 2641 enjoyed strong backing from traditional car rental services, such as Hertz and Enterprise Holdings. And at least one lawmaker who voted in support of the bill has since established a professional relationship with Enterprise.

Since resigning from her seat in the General Assembly in September, former state Sen. Pam Althoff, R-McHenry, has registered as a state lobbyist. Among her clients? Enterprise. While serving as a state lawmaker, Althoff received $6,100 in campaign contributions from Enterprise’s political action committee, according to records filed with the Illinois State Board of Elections.

Althoff, who also sits on the McHenry County board, told the Chicago Sun-Times, “I don’t think [it’s], quite frankly, unusual.”

Enterprise contributed $10,000 to the Illinois Democratic Party in 2017, according to the Sun-Times, and donated an additional $10,000 on Oct. 31.

Illinois has a concerning history of responding to new, innovative companies – including UberLyft and Airbnb – with high taxes and needlessly prohibitive regulation. With a state economy already hindered by a lousy business climate, lawmakers would be wise to welcome new business startups, and reject measures such as SB 2641 that protect established companies at consumers’ expense.

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