Brendan P. Bartholomew/Special to The S.F. ExaminerSouth San Francisco's City Council is expected to consider a long-term agreement later this month to allow FlightCar to develop space at a former roofing supply warehouse at 323 South Canal St.

Brendan P. Bartholomew/Special to The S.F. ExaminerSouth San Francisco's City Council is expected to consider a long-term agreement later this month to allow FlightCar to develop space at a former roofing supply warehouse at 323 South Canal St.

FlightCar set to make South San Francisco long-term home

FlightCar, a startup combining airport park-and-fly and private car rental services, is poised to acquire a long-term site in South San Francisco months after moving from its former regional base in Millbrae.

Under a lease agreement that South San Francisco's City Council will consider later this month, the company will obtain permission to develop a property at 323 South Canal St. FlightCar currently uses a space on nearby Dollar Avenue, which it relocated to after its operations ceased in Millbrae following tensions with the city over compliance issues.

FlightCar has agreed to pay fees equivalent to the parking taxes paid by more conventional park-and-fly operators, and will participate in a program to promote local businesses by offering travelers coupons and vouchers. The company also plans to base a substantial portion of its West Coast corporate operations at the Canal Street site. City officials said negotiations with the company have been amicable, and FlightCar founder Kevin Petrovic agreed, saying, “We're thrilled; the city's been great, and so has the city staff.”

The startup faced a far different scenario with its prior operations in Millbrae, where the city revoked the company's conditional use permit over concerns about alleged code violations at its former car lot on El Camino Real.

Petrovic acknowledges that there may have been some compliance issues, but maintains that this was partly due to the newness of his company's business model at the time, which changed rapidly and did not seem to conform with existing city codes.

That business model includes providing customers with free airport parking in exchange for the company being allowed to rent customer-owned cars out to other travelers. Car owners receive mileage compensation, while renters pay a flat daily fee. The company also provides free transportation to and from San Francisco International Airport, and covers each vehicle with a $1 million insurance policy.

South San Francisco City Planner Tony Rozzi said his department recognized that existing regulations could not have anticipated FlightCar's business model, and some accommodation was needed. “This hybrid approach, where FlightCar doesn't own any vehicles, is not specifically defined in our city's zoning ordinances, or those of most cities,” Rozzi noted. “We looked at how or where our code allows these uses in our city.”

City Manager Mike Futrell echoed Rozzi's sentiment, saying, “We're willing to bob and weave and work with companies to find that win-win solution.”

Futrell said the part of the agreement specifying that FlightCar locate a significant portion of its corporate offices at the Canal Street facility is not a major concession on the company's part, because it wants to be there. However, he said city officials are pleased by the decision because they want South San Francisco to be seen as a home to innovative companies.

City Council member Pradeep Gupta agreed that the city is sending a message to other entrepreneurs by encouraging FlightCar to locate its West Coast headquarters in town. “What we're saying is that we're willing to give chances and opportunities to innovators who want to grow in a friendly city,” Gupta noted.

Petrovic couldn't comment on pending litigation between FlightCar and Millbrae, but he did address another problem the company experienced there: the theft of customer cars by renters.

The company has since beefed up its fraud prevention measures, he noted, making it harder to rent a car using a stolen identity.

In addition to serving SFO travelers, FlightCar also maintains hubs near Los Angeles International Airport and Logan International Airport in Boston. Petrovic said an expansion to Seattle is in the works, but declined to comment on where else the company might seek to establish a presence. He was similarly tight-lipped about any possible plans to operate in Canada or overseas, but noted that doing business internationally has worked out well for Airbnb and similar sharing economy startups.

Bay Area NewsFlightCarMillbraePeninsulaSouth San Francisco

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