This Travelport agreement with FlightCar is a shocker given the regulatory and reputational risks. It's a shocker because we didn't know Travelport had it in them to make such a brash move -- and it is a multi-year agreement, too.
In a significant milestone, airport car-sharing service FlightCar partnered with travel agency distributor Travelport, a sign that portions of the travel industry establishment have embraced the sharing economy.
Services such as FlightCar and RelayRides enable travelers to drop their cars off at the airport and rent them out to other travelers in exchange for free parking or getting up to around $0.20 per mile.
Renters, in turn, get access to car rentals starting at around $10 per day, well below car rental rates from companies such as Enterprise, Hertz, Avis, and Budget.
In the multi-year agreement with Travelport, travel agents in the U.S. connected to its Worldspan global distribution system can offer the FlightCar service to their clients.
“Our agreement with FlightCar reinforces Travelport’s commitment to provide our customers with the very broadest range of travel content,” says Niklas Andreen, Travelport’s global vice president of Hospitality and Partner Marketing.
“Travelport is focused on growing with our customers and new business models like FlightCar are an important complement to our core business,” Andreen says.
The agreement might be seen as a ground-breaking one because huge companies such as Travelport, with its army of lawyers and corporate governance specialists, are usually too conservative to notch an agreement with a company that is battling regulatory authorities and local airports.
And, although there is insurance and renters are vetted, there is still some risk in the ride-sharing relationship and transaction.
Priceline’s outgoing CEO Jeffery Boyd recently said that partnering with Airbnb-type apartment-share companies is not on the agenda because of the regulatory hurdles. But there are signs that these regulatory battles for car-sharing companies are easing as some agreements are being reached.
However, as FlightCar and RelayRides expand into new airports and cities, new regulatory battles are in the offing.
However, RelayRides reached a compromise and is taking part in a pilot program with San Francisco International Airport, where travelers renting out their vehicles don’t get cash, but can get free parking instead.
The FlightCar service is currently available at SFO, LAX and Boston Logan airports.
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Photo credit: Avi Zinn, wife, Cory Isaacson and daughter Leah Zinn, 4-months-old, pick up their car at FlightCar in Millbrae, California, August 7, 2013. The couple live in Berkeley and have rented out their car at FlightCar three times. Helping them are FlightCar employees, Brendon Bucini and Ric Macapinlac, right. Gary Reyes / Bay Area News Group/MCT