Car rentals on the skids

It took a car rental agent almost an hour to process Chelsea Grogan’s paperwork for a one-way rental between Orlando and New York. Then the employee couldn’t find her vehicle in the airport parking lot. And when the Forest Hills, N.Y., graduate student dropped off the Dodge Intrepid, she discovered a surprise $350 surcharge on her bill.

“The customer service department wouldn’t return my calls to straighten things out,” she said.

Stories like Grogan’s are becoming increasingly common in an industry that seems to have lost its way. Of all the complaints I hear as National Geographic Traveler’s ombudsman, the ones from car rental customers are the most disheartening: Tales of agents pushing unnecessary collision-damage-waiver options, trying to strong-arm customers into buying upgrades and arbitrarily billing motorists for services they never requested.

The reason? Rental firms are suffering along with the rest of the travel business. Industry revenues slid from $19.4 billion in 2000 to $17.9 billion last year, reports Auto Rental News. In response, car rental companies cut fleet sizes by up to 20% during the past year, according to Abrams Consulting Group.

Meanwhile, franchisees have ratcheted up the pressure on employees to push profitable extras — such as fuel-purchase options, insurance and upgrades.

The industry is going in the wrong direction, cutting staffing to the point where customer service drops well below acceptable levels. Senior counter agents and managers are being laid off, leaving inexperienced staff to assist travelers. Customers are being held to the letter of their contracts, with no exceptions. Small surprise that three car rental companies have filed for bankruptcy protection since 9/11.

There are many parallels to the airline industry: the bankruptcies, the nickel-and-diming, even lobbying the federal government for aid. But although the two businesses’ fortunes are closely tied, particularly for on-airport rental franchisees, the car rental firms are not an equally crucial component of the nation’s transportation system. Instead of following the faltering airlines, they should find their own solutions.

First, rental firms should untie the knot with airlines by expanding beyond airports into more suburban markets. The strategy isn’t new to companies such as Enterprise, which specializes in off-airport locations. In the past three years, Hertz also has increased its suburban locations from 150 to 840. Revenues climbed from $3.8 billion to $4 billion, bucking the industry downturn. But, according to car industry guru Neil Abrams, Budget lags in its suburban expansion, and Alamo and National are even closing locations.

Customer service also could use an upgrade. Firms do use discounts to encourage customers to book online, but travelers need to be convinced to share more information online so they can finish their paperwork before arriving at the counter, thereby bypassing long lines and avoiding misunderstandings about insurance and fuel-purchase options. That alone could eliminate roughly half the grievances I hear about car rentals.

The consolidated rental facilities being built at many major airports add efficiency, but they need to be more customer-friendly. For instance, “Why shouldn’t there be a remote (baggage) check-in counter right there at the facility, so you don’t have to haul your baggage all the way to the main terminal?” asks aviation consultant Joe Waller.

Complaints about mysterious fees that pay for new sports complexes, convention centers or road improvements account for about a quarter of the car-rental gripes I get. The industry seems to be fighting harder to erase these surcharges. The big firms, for example, banded together to defeat a 3% convention-center tax in Pittsburgh, a deficit-reduction surcharge in Columbus, Ohio, and a $5-per-day rental tax to fund road improvements in Hawaii.

Grogan, the graduate student who was overcharged $350, got her money back after I contacted her car rental company. Getting the industry’s momentum back, however, won’t be as easy.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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