Author Danny Vinik

Flightcar: Rent Out Your Car While It Sits at the Airport

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A startup out of San Fransisco is looking to revolutionize traveling to and from the airport. The service is actually pretty intuitive: instead of just leaving your car parked at the airport, rent it out to fellow travellers. It’s pretty simple. You list your car online and drop it off at the Flightcar station at the airport. Renters see your car listed on the Flightcar website and can book it for whatever days they need (that you list as available). The startup checks the renter’s driving history, cleans the car and insures it up to $1 million in damages. The company even cleans it afterwards and pays for parking. Of course, the service takes a chunk of money from each rental, but a traveller can still make $5-$20 per day from renting their car instead of paying costly parking rates. The rental prices are cheaper than most rental car agencies so the renter saves money as well.

Unfortunately, it’s running into some legal hurdles.

Other rental car companies are furious that Flightcar operates as a rental car company without following any of the regulations and San Francisco has taken it upon itself to go after the startup:

The city has filed a lawsuit against FlightCar, hoping to shut it down until it complies with the regulations, including conducting pick-ups and drop-offs at a special area, paying 10 percent of gross profits to the airport and paying a $20 per rental transaction.

This is utter crap. Flightcar is very much like a rental car company except for two major differences: it pays for parking and doesn’t use airport land.

Rental car companies must operate in specific locations to avoid confusion and prevent traffic jams at airports. These firms have dozens of cars and must keep them near the gate so that travellers can rent a vehicle quickly without waiting. This requires that all of those cars be nearby and readily available. In exchange for giving them space to have those cars close by, the airport demands 10% of the gross profits and a $20/rental transaction fee. That’s the price of doing business.

But Flightcar doesn’t need to enter into that transaction. Instead of having all of its cars readily available in one location, it pays for airport parking, communicates with its customers in advance and meets them at the gate with their car when they arrive. No traffic jams. No need for an agreement between the airport and the company.

The firm has already taken care of the possible liability issues by insuring cars for up to $1,000,000 in damages. It checks renters’ driving history before they are given the car and makes sure the vehicle is clean. The company will undoubtedly run into obstacles as it grows in size. Bringing cars from the parking lot to the curb is labor-intensive, especially compared to a rental car company which needs just a couple of people to check travellers in and give them the keys to their car. And Flightcar cannot right now rent cars to people right when they arrive. It must be done in advance online, limiting the firm’s customer base.

This is a perfect example of the “sharing economy.” Travellers save money on parking and a make a bit renting out their cars. Renters save money too. The company takes a cut from each transaction to make the business profitable. Cars are used more efficiently as they don’t sit around in parking spots for the duration of the traveller’s trip. That opens up more parking for other customers. Everyone wins – except the entrenched interests of the rental car companies. They lose and they aren’t going down without a fight.

So, while Flightcar will have to overcome a number of structural issues as it continues to grow, there’s no reason for San Francisco to step in and try to shut down the company. It’s not doing anything illegal. Like the lawsuit against Airbnb, the case against Flightcar is yet another example of a city sticking up for its business interests and not for its people.

Libertarian Populism Can Be Popular

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There’s been some discussion in the blogosphere recently on “libertarian populism.” AEI’s Tim Carney published a list on Monday of policy solutions that libertarian populists should push towards the general public, including breaking up the big banks, ending corporate welfare, cleaning up the tax code, reducing the payroll tax and a couple other things. Carney writes that the goal is to “turn to the working class as the swing population that can deliver elections” and to do so, conservatives must “[o]ffer populist policies that mesh with free-market principles, and don’t be afraid to admit that the game is rigged in favor of the wealthy and the well-connected.”

I’m not a conservative or a libertarian so I don’t want to jump too deep into this debate which doesn’t involve me, but I’m very partial to Carney’s ideas. I would add in one other major one, that certainly falls under the libertarian mindset: reforming our intellectual property laws. All of these policies are focused on helping the working class. Shouldn’t that be a great way to garner support from them?

Ramesh Ponnuru doesn’t think so:

I’m sympathetic to most of the items on Carney’s list — and those on the list that fellow populist Conn Carroll has compiled. Taken together, though, they do not seem to amount to a winning political platform. A Republican party that took on the U.S. Export-Import Bank might improve its image a bit, but how many Americans really care enough about the issue to change their votes based on it? Nor does freeing the food trucks seem like it would win many votes, however right it might be as a policy matter.

The libertarian populists sometimes seem to make the same political mistake as left-wing populists: Assuming that because most voters distrust big business and do not believe they share its interests, they are therefore looking for the politician who will most vocally take it on.

Ponnuru is right that most voters don’t care at all about the Export-Import Bank. You can say that about most of Carney’s proposals (with the exception of the payroll tax reduction – which Ponnuru points out). But this isn’t about one specific proposal. It’s about the image of libertarian populism.

Obamacare has been the lead news story for years now, but a fifth of the country still doesn’t know about the individual mandate.. Few know about the regulations in Dodd-Frank or what was in the Stimulus. They hear about policies once in a while, but don’t follow DC closely. Ezra Klein has been preaching this for a while now. Political and policy analysts focus way too much on the political impact of certain policies or proposal. The public doesn’t follow this stuff.

What matters is the general image of the party and right now, Americans believe it caters towards the wealthy. This image won’t change over night and is going to take a concerted effort across the entire policy spectrum. Carney’s ideas are a great start. If libertarians in Congress (ahem – Rand Paul) came out with a major policy platform with these ideas and messaged it as a conservative manifesto to improve the lives of working class Americans, it would be greeted with open arms by huge swaths of people.

Most Americans are not going to hear about the details of how Paul wants to end corporate welfare or break up the big banks. But just hearing that he’s promoting such policies would prove that libertarians are looking out for the interests of main street. It can’t end there though. Libertarian populists must continue to push free-market policies in every facet of policymaking. They must stay on message that these policies are aimed at the working class. Slowly, but surely, people will begin to associate libertarianism with pro-middle class ideas. In fact, over time, libertarian populism could become popular and that would certainly be a positive development for working class Americans, the Republican party and the country as a whole.