By David Shepardson
WASHINGTON (Reuters) – Getaround Inc will pay $950,000 to Washington, D.C. and revise its business practices after allegations that it misrepresented the benefits and nature of its car sharing services and failed to pay city sales taxes, officials said on Friday.
The Softbank-backed San Francisco-based online company had operated without a license in the U.S capital, District of Columbia Attorney General Karl Racine said in a statement.
Getaround will pay restitution to car owners who experienced theft or damage to vehicles listed on its site, Racine said.
Customers can use Getaround to rent vehicles by the hour or day from individual owners who make vehicles available through Getaround.
The settlement resolves “what amounts to Getaround paying a tax bill it never disputed,” Getaround said in a statement. The company added that “as soon as Getaround was notified of security issues affecting certain cars in the District, the company took immediate corrective action.”
Car sharing services in Washington are subject to a 10.25% sales tax.
“Gig economy companies must abide by the same rules as their brick-and-mortar counterparts,” Racine said. “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.”
Racine’s office began investigating Getaround in 2020 after it received reports of increased thefts of cars listed on Getaround.
The settlement resolves allegations Getaround misled consumers “by using phony owner profiles for fleet cars actually owned by Getaround, Racine said.
In October, Getaround raised $140 million in additional venture capital funding. The company has raised nearly $600 million since it was founded in 2009 and in previous rounds was valued at more than $1.5 billion.
Getaround operates in over 100 U.S. cities and more than 850 cities worldwide.
(Reporting by David Shepardson, Editing by Nick Zieminski and Grant McCool)
