Getaround Fined $1M by DC Attorney General - P2P Car Rental Issues

Getaround Faces $1 Million Fine in Washington, D.C.

Getaround, a peer-to-peer car rental startup, has been penalized with a fine approaching $1 million by the Washington, D.C. Office of the Attorney General. This action stems from allegations of operating without proper licensing and other infractions.

The company characterizes the legal proceedings as being driven by “politically motivated allegations.” Investigations initiated by the Attorney General’s office began early in the previous year.

Investigation Triggered by Vehicle Theft Reports

The investigation was prompted by reports concerning the theft of vehicles listed on the Getaround platform. The resulting settlement, formalized on Friday, mandates a payment of $950,000 to the city.

Furthermore, Getaround is required to implement additional changes, including providing financial restitution to customers impacted by vehicle theft or damage while their cars were available for rent.

About Getaround and its Market Position

Getaround, recognized as the winner of TechCrunch’s Startup Battlefield at Disrupt NYC in 2011, facilitates car rentals by the hour or day through its website and mobile application.

Functioning similarly to competitors like Turo or the home-sharing service Airbnb, the platform mediates rental transactions and collects a service fee.

The company has successfully attracted substantial investment, most recently securing $140 million in Series E funding, bringing its total venture capital raised to $600 million.

Settlement Details and Disclaimer

The agreement reached is classified as an “assurance of voluntary compliance,” and does not constitute an admission of wrongdoing by Getaround.

The settlement documentation explicitly states that Getaround maintains its position that it has not violated any consumer protection or tax regulations.

Attorney General’s Statement

Attorney General Karl Racine emphasized the importance of equal regulatory compliance for all businesses, stating, “Gig economy companies must abide by the same rules as their brick-and-mortar counterparts.”

He further asserted that these companies must provide transparent and accurate information to consumers regarding service safety and fulfill their tax obligations.

Specific Allegations Against Getaround

The Attorney General’s office alleges that Getaround operated within the district without the necessary licensing.

Additionally, it is claimed that the company misrepresented its services and made “untrue or misleading representations” concerning the security of its car rental offerings.

As part of the settlement, Getaround is obligated to establish a formal process for handling user complaints related to vehicle damage or theft, including a clear reporting mechanism.

The company must also provide transparent disclosures regarding the limitations of its safety features, such as the “Enhanced Security” software, which allows for vehicle immobilization during non-rental periods.

Clearer articulation of the terms and conditions pertaining to insurance coverage is also required.

Concerns Regarding Misleading Practices

The Attorney General’s office also asserted that Getaround engaged in deceptive practices by creating fictitious owner profiles for vehicles owned and operated by the company itself.

Consequently, Getaround is now required to clearly identify its fleet vehicles within its listings.

Getaround’s Response

A Getaround spokesperson conveyed to TechCrunch that the company “categorically disagrees” with the allegations presented by the Attorney General.

The spokesperson highlighted the company’s swift response to security concerns, stating that corrective measures were implemented immediately upon notification of issues affecting vehicles in the District.

Getaround affirmed its ongoing commitment to compensating vehicle owners for legitimate claims of loss or damage and reiterated its compliance with tax obligations as outlined in the settlement.

Concluding Remarks from Getaround

The company spokesperson concluded by stating that “while the attorney general is focused on scoring political points, Getaround remains focused on connecting safe, convenient and affordable cars with District residents who need them to live and work.”