The study is aimed at describing two things i.e. the mechanism about profit sharing system of Raden Saleh car rental business in Palu municipality and the review of the profit sharing business system according to Islamic law. Descriptive qualitative method was used by employing three data collection instruments namely observation, interview, as well as documentation. The data were then checked, managed, analyzed and linked to the principles of Islamic financial system. The results showed that: (1) Raden Saleh Car Rental shared profits between car owners and a rental manager who agrreed to use akad mudharabah, muthalaqah, in which the car owner got 85%, while the rental manager got 15%. of the rental car profits. The rental Manager is obligated to pay IDR. 125.000,-for one rented car to the car owners every month. (2) In implementing the profit sharing, both the car owners and the rental manager signed a business contract which contains principles of Islamic law i.e. the profits are shared between the two parties based on mutual agreement that does not cause financial loss for one another, (3) Thing that violated the principles of Islamic shari’a was found in which the rental manager did not tnotify the car owners about the increase in rental car cost in special days e.g. new year and the fest of Islam such as Idul Fitri and Idul Adha. It had caused a loss on the car owners because they did not get a reasonable profit .
Keywords: Akad Mudharaba, Car Rental, Islamic Law, Muthalaqah, Profit Sharing
