Are car rental companies fixing their prices?
A lawsuit working its way through a U.S. District Court in California is raising a troubling question that could affect travelers: Are car rental companies fixing their prices? The suit, filed by the University of San Diego School of Law’s Center for Public Interest Law, alleges that auto rental firms in California have done just that. If the courts side with the consumer advocates, it could have national implications.
At issue is a tricky “gut and amend” legislative maneuver devised by car rental lobbyists in 2006. Under the amendments, the rental companies agreed to contribute $24 million to the California Travel and Tourism Commission, and in exchange were allowed to unbundle their 9 percent airport concession fees from their base rate, according to the suit.
What’s wrong with that? Well, nothing. It’s what happened next that the Center for Public Interest Law alleges is wrong.
Instead of paying the $24 million from their corporate treasuries, the rental companies added a 2.5 percent fee to each rental, basically passing the expense on to their consumers. And rather than separately itemizing the airport concession fee, the car rental companies added the fee to their pre-existing base rate, which amounted to a “price fix enrichment of tens of millions annually,” according to the suit.
Professor Robert Fellmeth, who directs the Center for Public Interest Law, says the sleight of hand has hurt travelers:
Now we learn how steep the real price was for this ‘bargain.’ Instead of a ‘we pay you something if you allow us to clarify a charge’
deal, consumers ended up paying for the industry’s ‘contribution’ to the California Travel and Tourism Commission plus a multi-million dollar illegal windfall to the rental car industry.”
There’s an insightful article in the Sacramento Bee that goes into more detail about this issue. Unsurprisingly, the car rental industry is dismissive of the complaint.
It shouldn’t be. I think it’s pretty obvious that car rental companies act together when it’s in their interests. It’s also clear that this behavior extends beyond the state of California. And that means the issue of price fixing among car rental companies could loom large in 2008 and beyond.
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Oooh. I’d love to recoup the jillions we’ve overpaid in CA car rentals. . .
And something happens that surprises you - well - I guess on 2nd thought . . .
12/22 I rented a car @ CHS. We flew our own airplane in. We made the reservation on the Hertz website to pick the car up at the general aviation side of the airport @ 1.30pm. We land at 1.57pm and it takes until 2.05pm until we taxi over. Car is waiting and we pick up the car and leave about 2.30pm.
12/23 - I return the car to fly the plane down to my vacation home about 55 miles away. The weather was forecast very poor so we landed in Charleston to be safe the day before. I bring the car back @ 2.10pm. The rental is for a day. Pretty much normal.
I get home and see the bill. They charged me $22.00 with all of the taxes and fees and surcharges for the 45 minutes between the reserved time and the pick up time. The bills showed a charge for one day - and one hour. They charged me from the time originally set in the reservation, even though they did nothing and I was over North Carolina at the time set for the original reservation.
I called Hertz billing, and after a 25 minute wait, the billing department was very accomodating. They saw immediately that the car was charged out not when I picked it up, but when they drove it over to the General Aviation side from the main car rental lot. They had NO pick up time in the record [someone dropped the ball]. Hertz first tried to get me to take an upgrade on my next rental. But, when I pointed out that there was no way I could have picked it when they checked the car out of the lot, well, logic actually won out. Hertz originally charged us $53 for the rental and credited $22 to our account, $12 for the one hour fee, and $10, or 83% [!!!!] of the hourly fee in taxes fees and charges.
It’s nice when the service department can provide service, but that was after they dropped the ball three times [not entering the correct checkout time, not catching it when they processed the return and keeping a customer on hold for almost 30 minutes]. I have NEVER seen a car rental company EVER make a mistake in the customers favor.