To the Editor:
Your Feb. 13 editorial entitled "Lessons from TrueCar" in which you blame TrueCar's recent regulatory challenges on state franchise laws is one of the most wrongheaded opinion pieces I have seen in your publication.
Franchise laws were put in place to level the playing field between dealers and manufacturers. Dealers and their families who invest their lives in their businesses should not have them damaged or terminated at the whim of a franchisor. Those laws have nothing to do with TrueCar's recent issues.
State licensing and advertising laws make the retail car business one of the most regulated in the country. Dealers didn't choose this state control. These statutes were the work of state regulators and consumer advocates who use them to regulate dealer practices.
The laws regulate what licenses a dealer and the dealer's salespeople may have, whether unlicensed people can be compensated, the business practices that a dealer must follow and the advertising claims that a dealer may make. These are the laws that are at issue for TrueCar. And the state regulators have simply been pointing out to TrueCar and the dealers that use the service that they cannot just cast aside state laws as mere hindrances in the way of the almighty Internet.
It is a common media fallacy that dealers use franchise laws to protect themselves from competition, especially from the Internet. That's nonsense. There is no more competitive business than motor vehicle retailing. And dealers have been at the forefront in using the Internet to serve their customers. Your readers deserved a more thoughtful and accurate analysis.