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Car rental options at Logan expand; debate likely to grow

RelayRides becomes latest airport car sharing service

FlightCar chief executive Rujul Zaparde is facing a lawsuit over the firm’s operations at San Francisco’s airport.

Eric Risberg/Associated Press

FlightCar chief executive Rujul Zaparde is facing a lawsuit over the firm’s operations at San Francisco’s airport.

The airport has become a hot spot in the car sharing world. First, FlightCar , a California company that allows departing travelers to rent their personal cars to arriving passengers, launched its service at several airports, including Logan International.

Now, RelayRides, a three-year-old company founded in Cambridge, is getting into the act, recently expanding its service from neighborhoods to airports. Already, its members have listed more than 1,000 cars that can be picked up at 150 airports around the country, including about 30 vehicles at Logan.

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“It’s a huge opportunity for us to establish ourselves as a new player in the space that hasn’t seen a lot of innovation until recently,” said Andre Haddad, chief executive of RelayRides, which is now based in San Francisco.

Peer-to-peer car sharing companies such as FlightCar and RelayRides are part of the collaborative consumption movement, connecting people in need of a car for a few days or hours with people who want to make money by renting their cars. People flying into Logan, for instance, can go on the RelayRides website and reserve a car listed at the airport. The owner will bring it to Logan or give the renter instructions on where to find it.

But the sharing economy has yet to be embraced by airport authorities and traditional rental car companies, which pay high fees to operate at airports.

The city of San Francisco is suing FlightCar because the company doesn’t have a license to operate at San Francisco International Airport and refuses to pay rental car fees. FlightCar owners say they are not subject to these fees because their operations are not located on airport property.

Stephen Lam/REUTERS

Andre Haddad, CEO of RelayRides, says “It’s a huge opportunity for us.”

Similarly, RelayRides does not pay fees to airports where its members drop off cars for renters. RelayRides argues that it is not subject to these requirements because it doesn’t rent cars there, but merely facilitates transactions between private parties.

The Massachusetts Port Authority, which runs Logan, requires agreements for all businesses operating at the airport. Without it, “we cannot ascertain if they provide the levels of safety, security, and customer service that we expect from companies that do business at Logan Airport,” Massport said in a statement. The agency took a similar position on FlightCar.

Traditional rental car companies are watching the situation closely, too. They are tightly regulated and charged hefty fees by the airports where they operate, and they expect airport authoritiesto hold new competitors to the same standards, said Chris Brown, executive editor of Auto Rental News.

“It’s these disruptive business models that are upsetting the apple cart against these traditional business models that are playing by the rules,” he said. “The nitty-gritty of the rules has yet to be tested.”

Zipcar, the Cambridge company that calls itself a car sharing service, is also expanding to airports, recently launching operations at 13 in conjunction with Avis, which purchased Zipcar earlier this year. Zipcar has a different business model than RelayRides: it owns the cars, rents them by the hour, pays airport fees, and operates under airport rules.

Zipcar has not yet started operations at Logan.

RelayRides says it has tens of thousands of members using its website to rent thousands of vehicles in 1,500 cities, but won’t reveal specific figures. Car owners set the price — typically around $9 an hour, or $50 a day, depending on the vehicle — and RelayRides takes a 25 percent cut.

Now that users have the option of listing their cars at the airport, RelayRides is hoping it can take a bigger bite out of the $24 billion US rental car business. Haddad, the RelayRides chief executive, said airports are more lucrative markets because rentals average six days and $300, three times the average RelayRides transaction.

But the issue of airport fees and who pays them is likely to get more complicated and contentious. Some RelayRides members rent multiple cars; one member in Chicago took out a small business loan to create a “micro fleet” of six cars.

Ed Salwin, a software developer in the Washington area, bought a 2010 Toyota Corolla for the sole purpose of renting it out through RelayRides. In fact, it was his request to list the car at Reagan National Airport that led RelayRides to add the airport option to its website.

Salwin, 31, only charges $4 an hour for the Corolla, and makes just a few hundred dollars a year from it after factoring in depreciation, maintenance, and insurance. But Salwin, who has since purchased another car to rent, likes offering a cheaper alternative to traditional rental cars, and hopes he is helping keep cars off the road by giving people an alternative to owning a vehicle.

He said he gets satisfaction from “contributing to a movement that could help shape things for the better,” as well as from being an entrepreneur. “It could,” he said, “potentially be the start of some kind of business endeavor way down the road.”

Katie Johnston can be reached at kjohnston@globe.com. Follow her on Twitter @ktkjohnston.
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