Peer-to-peer car rental startup Getaround fined nearly $1M by DC’s attorney general

NelsonG · July 23, 2021

Getaround was fined nearly $1 million by the Washington, D.C. Office of the attorney general for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”

The AG’s office started investigating the company early last year, after it received reports of vehicle thefts of cars listed on the Getaround platform. The settlement, released Friday, requires the company to pay the city $950,000, in addition to implementing other changes, including paying restitution to customers whose vehicles were stolen or damaged while listed for rent on Getaround’s platform.

Getaround, the winner of TechCrunch’s Startup Battlefield at Disrupt NYC in 2011, lets individual car owners rent their vehicles by the hour or day via its website and app. The site, much like competitor Turo or home rental analog Airbnb, mediates this exchange (and takes a cut off the top). The company’s attracted a lot of interest from investors, most recently raising a $140 million Series E that brought its total venture funding to $600 million.

The settlement is what’s known as an “assurance of voluntary compliance,” and it’s not an admission of guilt. The settlement document makes clear that Getaround denies it violated any consumer protection or tax laws.

Getaround raises a $140 million Series E amid rebound in short-distance travel

“Gig economy companies must abide by the same rules as their brick-and-mortar counterparts,” Attorney General Karl Racine said in a statement. “They must provide clear and accurate information to consumers, especially about the safety of their services, and they must pay their fair share of taxes like everyone else does.”

The AG’s office claims that Getaround operated without a license in the district, misrepresented its service and made “untrue or misleading representations” about the safety of its car rental services. As part of the settlement, the company must create a written policy for user complaints regarding vehicle damage or theft, including a way for users to report any issues. It also must clearly disclose limitations of its safety features, such as its “Enhanced Security” software feature, which Getaround says on its website can immobilize your car when it’s not being used. Getaround must also more clearly state the terms and conditions for insurance coverage.

The AG’s office also claimed that Getaround misled consumers by creating fake owner profiles for vehicles that it owned and operated. The company must now disclose its fleet cars clearly in listings.

A Getaround spokesperson told TechCrunch that the company “categorically disagrees” with the AG’s allegations.

“With regard to safety and security, as the attorney general acknowledges, as soon as Getaround was notified of security issues affecting certain cars in the District, the company took immediate corrective action,” the spokesperson said. “As is its practice, Getaround will continue to compensate car owners who have filed valid claims for loss or damage. Finally, Getaround never disputed liability for the taxes it is paying pursuant to this settlement. Getaround will continue to pay applicable taxes to the District and in every jurisdiction in which it operates.”

The company spokesperson went on to say 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.”