Using the Legal System to Maintain Monopolies

People seem to mistaken the legal system in the United States for a justice system. The legal system isn’t setup to administer justice, it’s setup to protect monopolies. Whenever competition threatens a major corporation that corporation turns to the state for protection and the state is always willing to listen to anybody with deep pockets. Meet Rajul Zaparde, Shri Graneshram, and Kevin Petrovic the founders of FlightCar:

The idea was this: At every major airport, acres of cars sit idle, left parked by owners who have jetted off. Why couldn’t these same cars be rented to arriving travelers? Rates could be dramatically cheaper than those charged by traditional car rental companies, since, under this model, the rental company wouldn’t have to pay for or maintain the fleet.

Owners would have a fourfold incentive to participate: free parking, a free car wash, a cut of the rental fee and a guarantee their car would be waiting for them when they returned.

With financing from angel investors, FlightCar, the trio’s brainchild, began renting cars in February to passengers arriving at San Francisco International Airport (SFO), for rates start as low as $21 a day, depending on the make and model of the car.

Sounds like a pretty sweet deal. I wish FlightCar would have been available where I’ve flown to because paying $21.00 for a car is far better than almost $100.00. As you can guess this business was looking to succeed so it was inevitable that somebody was going to sue them:

Foes of FlightCar, however, have started to shoot back.

It’s easy to see how traditional rental companies might not be amused to have their prices undercut. But San Francisco International is crying foul, as well.

Doug Yakel, public information officer for SFO, tells ABC News that FlightCar refuses to play by the rules that govern other rental car companies. It doesn’t pay the same fees, he says, and it doesn’t abide by the same regulations.

SFO’s objections have taken the form of a complaint filed last month against FlightCar by the city attorney of San Francisco.

When the San Francisco International (SFO) airport says FlightCar isn’t playing by the rules it really means FlightCar isn’t giving it a piece of the action:

or example, SFO wants FlightCar to pay it 10 percent of its gross profit and a $20 fee for each rental car transaction — the same as what the airport gets from every other rental car company.

The fact that FlightCar operates from a base outside airport property, Yakel says, makes no difference: SFO has three other rental companies that also operate off-property. According to the complaint, those three paid SFO over $2 million in fees in 2012. FlightCar, too, should pay, thinks Yakel.

What makes SFO think it has any right to expropriate wealth from other entities, especially when those entities aren’t on its property? While the three rental companies currently paying SFO fees may be doing so willingly, likely for preferential treatment involving direct shuttle access from the airport to the rental car center, there is no reason SFO is entitled so such fees. I’m sure SFO is worried that FlightCar will succeed and that success will drive its competitors out of business, which would deprive SFO of roughly $2 million annual.

A justice system would have thrown this complaint out the window as soon as it was informed that FlightCar isn’t stationed on SFO property. Sadly, judging by the history of similar legal issues in this country, SFO, which is owned by the city and county of San Francisco and therefore the same entities that own the local legal system, is likely to win this case or, at least, drag it on long enough to bankrupt FlightCar (in court, if you can’t beat them you can bankrupt them).