SAN FRANCISCO (Legal Newsline) - A representative of the car rental company RelayRides Inc. says that the company is confident it will be able to resolve the class action lawsuit filed against it in U.S. District Court for the Northern District of California.
“We are optimistic that once we clarify how our processes work with the named plaintiff, he will choose to dismiss the lawsuit,” Steve Webb, director of communications for the operating company Turo, told Legal Newsline.
The plaintiff, Prov Krivoshey, who is a resident of Illinois, filed the lawsuit on March 31, alleging that RelayRides, while doing business as Turo, overcharges customers by leveraging administrative fees when the customer breaches a service agreement.
These fees are in addition to the cost of any damage a renter caused to the vehicle.
According to the complaint, these fees are laid out in the service agreement and may be assessed any time a customer returns a vehicle late, drives more miles than permitted, smokes in the vehicle or causes damage to the vehicle.
“Our fees go towards covering the costs of providing our services to our customers and are clearly and transparently defined on the site,” Webb said. “They do not constitute liquidated damages.”
The company adopted the name Turo in 2015 as part of a rebranding of the company. Founded in San Francisco in 2009, RelayRides sought to expand its peer-to-peer car rental service with the help of Series C funding led by Kleiner Perkins Caufiled & Byers.
According to marketing information released by the company, Turo is now in 2,500 cities and 300 airports across the U.S. and Canada. Its Canadian service launched in April.
The peer-to-peer model allows private automobile owners to make their cars available to travelers seeking to rent. The class in the lawsuit is defined as RelayRides cusomers who used the service anytime before November who incurred an admin fee, as well as those customers who used the service at any time, incurred a fee and opted out of the company’s arbitration provision, which was recently added to the terms of service on its website.
Thousands of renters may be eligible to join the class. The claims of all members of the proposed class exceed $5 million, according to the complaint.
According to the complaint, Krivoshey caused damage to a vehicle that was assessed at $583.99. He paid this fee but was also assessed a $150 administrative fee. Krivoshey opted out of any agreement by sending an opt out notice to an email address designated by Turo.
He also paid the fee, but told an employee at the company that he was only doing so to avoid negative consequences to his credit.
The complaint alleges that Turo violated both the Consumer Legal Remedies Act and section 1671 of the California Civil Code First. It also alleges that Turo engaged in unlawful business practices in violation Unfair Competition Law and the Business and Professional Code.
Webb said that this lawsuit is the first of its kind against the company.