Car rental companies talk of total pricing

Nothing makes business travelers’ blood boil quite like the unexpected fees and surcharges that car-rental companies tack onto their bills, from airport taxes to a $6-a-gallon charge for filling up the gas tank when the vehicle is returned.

A recent study by Travelocity, the online travel agency, found that the car-rental customer paid an average of 24.4 percent in taxes and surcharges over the base rate when renting at a major American airport. The list of these add-ons has been expanding steadily for the last decade, pushing many drivers to the point of revolt.

To blunt that anger, the car-rental industry and the online travel agencies recently began rolling out a program called total pricing, intended to quote a price that includes all taxes, fees and surcharges.

If this can actually produce a final bill that matches the advertised rate, it might just succeed in sidestepping a public relations disaster.

But that is a big if, industry insiders and business travelers say.

Travelocity.com, the first of the major online travel agencies to widely promote a complete price to its customers, guarantees that its estimate will be within 1 percent of the final bill.

A leading rival, Orbitz, promises that the price will be an exact match. And Expedia is expected to offer a similar warranty next month when it introduces a feature that will display an estimated rate at the end of each car-rental search.

Two other online travel sellers, Hotwire.com and Priceline.com, also guarantee all-inclusive rates in the form of prepaid vouchers.

But for business travelers, the road to a real, full price has been a bumpy one.

”I think rental customers are getting a more accurate idea of what a car rental will cost,” said Neil Abrams, president of the Abrams Consulting Group. ”But they aren’t necessarily getting the whole picture. There are other optional charges, such as fuel-purchase options, loss-damage waivers, that aren’t included. And the systems that generate a total price are costly, complex and not yet perfected.”

For example, Travelocity, one of the earliest converts to total pricing, still does not offer a complete rate when corporate travelers use its Travelocity Business booking service. The reservations technology used by Travelocity Business is different from the one used on Travelocity, and is not yet capable of calculating a total price, according to the company. That is expected to be fixed with upgrades this spring.

In the meantime, ”total pricing is always available on Travelocity,” said Phil Kennewell, who is Travelocity’s director of car and rail products.

But even when an online service promises a full price, it sometimes leaves out important details that can affect the rate paid. Chuck Reagan booked a car through Travelocity in January and was quoted a ”total” price of $135. But when an agent at Enterprise Rent-A-Car found that he planned to drive from Portland, Ore., into Idaho, she increased the four-day rate more than 60 percent, to $218.

”Nothing in Travelocity’s total price mentioned charging extra for driving into Idaho,” Mr. Reagan, a salesman from Logan, Utah, said. ”But Enterprise said that it is its policy to charge more for Idaho. It was a classic bait-and-switch scam as far as I’m concerned.”

Travelocity said Mr. Reagan failed to read the fine print in his rental agreement, which outlined the geographical restrictions. But Mr. Kennewell acknowledged that the booking display ”could have been clearer.” Enterprise refunded the difference between what Mr. Reagan was first quoted and what he was billed. Travelocity has pledged to redesign its booking page.

At times, travelers are not sure if they are being quoted a total price. Warren Bell, a South San Francisco, Calif., market researcher who rented a car through Orbitz in August, said that the rate offered by National Car Rental in Las Vegas for a midsize vehicle came up as $18.95 a day, including all taxes and fees. But Orbitz failed to mention that the daily rate jumped to $50.96 over the weekend, leaving him with a bill of $211.

”When I returned the car and saw my bill, I honestly thought they had charged me for the wrong reservation,” Mr. Bell said.

Orbitz, which asserts that it has never had to reimburse a car-rental customer under its rate guarantee, said the quote Mr. Bell received did not represent a total price.

Sam Fulton, its director of car rental operations, said National had not upgraded its systems to send a complete price to Orbitz last summer. Since Mr. Bell’s rental, Orbitz has begun offering total prices for its National cars, and it plans to extend that to all its rentals by year’s end.

Mr. Fulton acknowledges that the concept of total pricing is not without its flaws. ”If a municipality imposed new taxes that weren’t in the system at the time of the rental, then there wouldn’t be much we could do about it,” he said.

Rental vouchers like the ones offered on ”opaque” Web sites like Hotwire and Priceline have not been problem-free.

Bonnie Schollianos, a manager for a resort in St. Thomas, in the Virgin Islands, booked a car through Priceline two years ago. A rental agent at the Hertz counter in Oakland, Calif., charged her a $5 airport fee, which was supposed to have been included in her rate. Priceline said that the agent misunderstood the terms of the rental voucher and refunded the $5.

Priceline later revised its display to calculate all taxes and fees at the beginning of the booking process, and since then there have been no misunderstandings at the counter, a spokesman, Brian Ek, said.

”The price you see,” he added, ”is the price you pay.”

Car-rental companies are offering total pricing both to placate customers and to meet rate disclosure requirements from states like California and North Carolina.

”It’s important that a consumer knows exactly what they will pay,” a Hertz spokesman, Richard Broome, said. ”The last thing you want is a surprise at the end of the rental.”

The improvements have not come cheap to car-rental companies. The cost for a small company to upgrade so a total price can be sent through its reservations system runs ”in the tens of thousands of dollars,” according to Mr. Abrams, the rental analyst.

For one of the major companies, it can be a six-figure technology investment. None of the online agencies would disclose its exact investment in total-pricing technology. Expedia’s director of car programs, Noah Tratt, said it had a team of 10 developers working on the system, adding, ”We are very committed to total pricing.”

There are further complications. Total pricing is far from complete. Mr. Broome said current total-pricing systems, while sophisticated, still had to make certain assumptions. For example, when an Internet user asks for a quote on a Hertz car in Boston and does not provide flight-arrival information, the system guesses that it is being rented at a location other than the one at the airport.

But if a car is picked up at the airport, certain airport fees would apply. ”If you were flying into Boston, your car would be more expensive,” he said.

There is also the matter of when the total price is displayed — at the start of the reservations process when an Internet user is shopping for a cheap rate, or at the end when a purchase decision is all but made.

Car-rental companies have resisted listing a total price at the start — in part because it forces the system to make assumptions about the rental that may be erroneous, but largely for competitive reasons.

No company wants to show the real price until it absolutely has to, according to Marie Benz, who manages the Web site Autorental-guide.com.

”Base rates are still artificially low,” she said. ”You have to pay attention to the fine print in your rental contract, even with total pricing.”