Can a car rental company double my rate because I’m not American?

There’s something funny going on with car rental prices, and Hal Gordon wants answers.

Here’s what happened to him: A few weeks ago, he checked rental rates through the Avis website for a friend, who was flying to New York from Israel.

“The website said there were no vehicles available for the dates chosen,” he says. “I checked for other countries
in the Middle East — same result. However, for UK or Venezuela — no problem. Vehicles were available.”

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Gordon visited a few other sites, including Hertz.

“They doubled the price for foreign nationals,” he says. “What’s going on here?”

Good question. To find out, I first checked the Avis site, running a query for a rental from JFK in early March. I identified myself as a resident of Israel in the first search, and the site offered me a rate of $59 a day. Not bad for a set of wheels in the Big Apple.

Then I tried the same query as an American. The rate? Almost $20 per day higher — $78.

Hmm. Jacking up the rate by $20 because I’m American? Refusing to rent a car to someone from the Middle East? Sounds ridiculous.

What’s going on here?

“Car rental pricing is market-driven and very dynamic,” says Alice Pereira, a spokeswoman for Avis. “Many factors determine price, including level of demand, cost of service, currency exchange rates, and the competitive environment. Travel companies may offer promotional rates to take advantage of growing markets or other fluctuations in demand, or simply to respond to competitive pricing.”

In other words, car rental companies have the right to change their price based on who you are. And they frequently do.

So what determines the rate you pay? A driver’s nationality, the currency exchange rate and the inclusion or exclusion of the costs of damage and liability coverages that, in some countries, are required charges for foreign travelers, according to Avis.

Hertz agreed, calling these dynamic rates a “standard travel industry practice.”

“The competitive influences in each source market typically pattern the resulting non-resident rates and promotions to be among the lowest available in the destination markets,” says Paula Rivera, a Hertz spokeswoman. “However, there is no guarantee that this will always be the case and there may be instances whereby local promotions are offered to residents at lower rate levels.”

Gordon doesn’t buy it. He calls these practices “discriminatory” — which they certainly are.

In some business settings, changing a price based on who you are, or refusing to sell you a product, would be discriminatory, if not illegal.

But “dynamic” pricing is creeping into our lives beyond the travel industry. Remember your last trip to the grocery store? Maybe they offered a special price based on your “club” membership in the grocery store’s loyalty program, or a two-for-one offer — members only.

It’s every revenue manager’s fantasy to be able to charge a price that’s based on who you are, and what you’re willing to pay, and believe me, that day is coming.

I’m not surprised at any of these answers, although I’m a little taken aback that any company would refused to rent a car to anyone based on their nationality. I tried to duplicate that result on the site, but couldn’t.

None of the car rental companies I spoke with would answer the allegation that they stopped certain travelers from renting their cars, although that isn’t necessarily illegal. Just try to rent a car if you’re under 25 or have a questionable DMV record. Your rental company might tell you it’s “out” of cars, too, or turn you down flat.

The real question is: Should that kind of discrimination — er, I mean, dynamic pricing — be allowed here in the United States, a country that takes great pride in its egalitarian values?

Should we draw the line somewhere — and if so, where?

144 thoughts on “Can a car rental company double my rate because I’m not American?

  1. Movie theaters do it all the time. Are you a student, a senior, or a child? Cheap/discounted tickets.

    Are you a member of the theater’s reward club? Ticket might be free, or you might get a free tub of popcorn, or $0.50 off a drink, depending on who you are.

    Discriminatory pricing is discriminatory, but not necessarily a bad thing or an illegal thing. However, such pricing discrimination ought, at the least, to be transparent to all customers. 

    1. Your right, but the theater as well as other places like restaurants are put in place to benefit a percentage of the customers. The same can’t be said in this case and therefore a hard look should be taken at these practices by travel companies. Since we are now aware of a car company doing it, is nationality one of the many factors contributing to “Market fluctuations” on airlines and hotels, etc.?

        1. Also if I am not mistaken, restaurants can be “really” private as in private clubs. Not too long ago (or maybe still, now) there were golf courses that did not allow blacks or Jews for members. That practice is DISGUSTING, but was (or is) not illegal at that time.

          I am not sure if rental car companies are held to the same standard as airlines, buses, railroads, ferries and ships, phone companies, or any COMMON carrier.

          ADDED: It would be nice is Carver gives us a summary of what the Federal Civil Rights Act (as well as some States’ Laws) would do to protect us against discrimination.

          1. Federal Civil Rights Laws have teeth.  You or the government can sue and collect tons of money or get a court to prevent the action from occuring and get money.  And if you (the plaintiff) wins the other side must pay your attorneys fees, a rarity in the US.

        2. My point was that at restaurants they sometimes offer a discount to those on a fixed income. Your point that a restaurant is there to benefit the entire eating community is correct. 

          1. I don’t think I was 100% clear in my first statement.  What I meant to say was that as restaurants do want to attract as many people to buy food at their establishment. But they recognize the need to market themselves to different demographics. Hence, some put different prices for seniors and children, happy hours, etc. Thanks:)

      1. Tomato – tomahto…

        Those pricing differences aren’t put in place simply to give discounts to people who would otherwise be willing to pay full price. They are there to encourage people to go to the movies who would otherwise watch Netflix or rent a video or do something else. They’re splitting out the supply/demand curve for different demographics, which is a great way to maximize revenues through pricing efficiencies…which benefits the business. The point is not to give consumers discounts–the point is to encourage spending.

        In the case of movie theaters, the pricing differences are readily accessible. In the case of the travel industry (car rental, airplane tickets, hotels, etc), the pricing discrimination is horribly opaque. If you’re a AAA member, you might get a discount; if you have insurance through a certain partner company you might get a different discount; if you happen to be a certain age/gender/nationality or from a certain place, you might get a different pricing structure. 

        These things are all fine. What’s horrible (from a consumer standpoint) is when the pricing mechanisms are so opaque that it’s not even clear what categories you might be eligible for. It would be like going to the movies and having to ask if there’s a discount for students, people with blue eyes, people under 5’6″, people who are left-handed, or those who have a Firearm Owner ID Card, since none of those are posted. The opacity is what makes it bad, not the discrimination itself.

    2. Apples and oranges. Giving regular customers a discount, or even one to children and seniors, is no big deal — we’ve agreed as a society that those things are okay. Imagine the uproar if your local movie theater had a higher price for Israelis. Or Muslims. Or black people. There’d be an uproar.

    3. It’s a simple matter of EXPERIENCE.  They’re private companies and absolutely can discriminate based on economic experience.  

      Ex.: If you’ve had the experience of loosing many cars to a large percentage of the people from Iceland in serious collisions, then you’re going to learn and raise the rates substantially to Icelanders or maybe not rent to them at all.

      I want the rental car companies to stay in business so I can rent a car.  If they experience a large number of losses when renting to gray-haired old geezers, then I guess I’ll have to pay more!

      1. No they can NOT discriminate.  You want to penalize and discriminate against an entire ethnic or age group because of bad experience with some members of that race or age group.

      2. You are 100% WRONG. if you lose too many cars to a certain group, then you make them pay the manditory insurance charge in the rental price and you make note of it in your pricing structure. What the rental companies are doing is discrimination.

        The first poster in the thread went on about restaraunts. Totally different. in that scenario one entire group is given a DISCOUNT, not a surcharge and the group is based on age or how much they eat. In a rental car situation, this would be taken care of by requiring insurance. As someone else said, what the rental companies are doing is akin to a restaraunt requiring black people or jewish people to pay more, and offering discounts to white people. Would ANYONE in America stand for this today? So why can the rental world get away with it but calling it “dynamic”. hmmm, a new term for racism…

        1. The US Civil Rights Act of 1964 expressly prohibits discrimination, on the basis of nationality, by any place of “public accomodation” provided said place has a material impact on interstate commerce.  The major rental car companies clearly meet both criteria.

  2.  I can see why there might be insurance reasons why those from certain nationalities might be charged an extra fee, or forced to take out certain levels of insurance that might be optional for US license holders.  But this should be transparent and obvious when making the booking.  For example I recently rented from a local car rental place in Australia that had a $10/day fee for non-Australian drivers licenses… but this was well advertised on their web site and at the rental counter.

  3. The travel industry has a long history of dynamic pricing. It often sells identical goods and services for far different pricing depending on the identity of the purchaser.

    The major travel components (air, lodging, car) spend considerable resources to determine if your usage is business or pleasure. If you rent a car on Thursday you pay the business rate.  Extend that rental by two days and the rate drops by more than half.  Same with hotels.

    Of course, because of our history, we have a kneejerk reaction to anything that sounds discriminatory.  That’s generally a good thing.  My question would be, what is the legitimate business reason that car companies charge more to Americans.  If it’s based on behaviour patterns then it might be legit.

    For example, most of the US has crappy public transportation, the Northeast corrodor being the notable exception.  I can imagine that people from certain countries, who are more used to public transportation, being willing to bypass car rentals and chance public transportation than Americans. If so, they would need more incentive to rent a car and accordingly the price would have to be cheaper.

    Not knowing the inner workings of Avis and Hertz, this is of course pure conjecture.  But it would justify differential pricing.

    1. Carver, as a dual national, this is my general experience: renting from Europe (like the Dutch site of Hertz, or the Italian one) a car in US is usually way, way cheaper than renting in the American Hertz website if you factor insurance (there is no such thing as European credit cards that covers rental car insurance).

  4. Cruise lines do it all the time. If you’re from a certain state or belong to a certain group, your rate can be different. Living in Asia, lots of hotel promotions are for certain nationalities only or only for residents (and you need to show ID to claim it). If it makes you feel better, instead of thinking of it as a higher fee for some people, perhaps think of it as discounted price for others?

    1. In addition to cruises, many Florida hotels offer discounted rates to Florida residents. Disneyworld and other attractions offer discounted tickets to residents as well. 

      The practice described with rental cars is very common as well and has been happening for many years.

  5. The question is where DO they draw the line?

    I think it’s pretty darn skeevy to charge a price based upon someone’s nationality. And the rental agency SPIN is amazingly bad. “Oh dynamic pricing…yadda yadda…no real answer..” Do people actually go to school to sound that stupid or is it an inherited trait?

    I’m fine with them charging more for people with sucky driving records, but nationalities? NO.

      1.  Ahem…those of us who frequent this site and DO have a degree in marketing and/or PR would disagree with you. A lot of time, we have no control over what the client (or our bosses) want us to say. 😉

    1. I wonder if what we are seeing is the result of a targeted promotion and complex business rules. I consulted for a company that did such promotions; it was a nightmare to setup. 
      So in Chris’s example, the base rate would have been $78 a day, but they saw Israelis as an untapped market and wanted to draw them in, so they did advertising in Israel offering a promotional rate to people traveling from Israel, so the system was setup to charge people from Israel $59 a day rather than the base rate.  Then there are other rules in place such that county X does not have licensing rules recognized by Avis as a valid license.  So when people put in country X, the system simply shows them no availability (Because depending on the system they use that could be cheaper than moddign the system to display a message about their license not being excepted).
      I am not saying that’s what Avis is doing, but I am providing a possible explanation based on work I actually had to do for a company (Not Avis).  So from Avis’s perspective, a person in the US will never say they are from Israel, only someone from Israel will.  However if someone starts changing the fields and seeing different rates, it would look like it’s discriminating.  What I would like to see is them say “Special Israeli promotional rate” or something to that effect to signify the price difference, but again, modifying their system has a lot of costs, so a lot of companies forego such explanations.
      Now it could be that Avis is simply discriminating and that is simply wrong, but I do think there is some merit to their argument that it’s “Dynamic Pricing.”  Should my theory be correct, I would have hoped they would have told Chris that they were offering a promotional rate to try to attract people from Israel and that their market analysis showed Israeli tourism to the US was up and they were not renting and wanted to get them to rent.  Instead, they gave their stupid Dynamic Pricing BS.

      1. Very good explanation. But Avis could have done a better job if they simply asked the viewer where they are from and directed them to that country’s website or do an IP geocode lookup and redirect it to the Avis website for Israelis.

        What they did was give different rates to different nationalities (or country of residence) in their USA website. For example, just using the “Axis of Evil” countries for a subcompact in JFK for one day:

        No. Korea $ 96.99
        IRAN $ 66
        Cuba $ 46

        For Americans like you and me $ 81.99

        It’s nice to know that No. Koreans will pay MORE than me. But Iranians and Cubans, not ???

        Avis are you nuts?

        1. Try a non-airport location and see if you get the same results. In my own little search I found that with Europcar/Germany the price-for-Germans was around 10% more at 2 airports (FRA, HAM) but 20% less at a non-airport location. I suspect Germans in Germany are facing business prices at German airports? 

        2. Now that is insane!!!  And funny!
          I agree, they really should re-direct, it would look much better and wouldn’t be very difficult.  It really does look discriminatory to anyone trying.  Am I remembering wrong, or did they used to ask for the issuing state and country of the driver’s license?  I think that would be a little better of a way to determine the rate.
          Needless to say, I guess they are trying to attract some Iranian and Cuban tourism!

          1. Emanon, I’ve got to tell you this AVIS thing is so UN-AMERICAN to me. The more I dig, the more bizarre they get.

            Hmm, do you think the US issues VISAs to Iranians? Maybe their gov’t wont even allow them out to come here.

            So from now on if anyone wants a cheaper rate in Avis, just tell them you’re from Cuba (you know that little place in Miami). LOL.

          2. I was wondering the exact same thing. Can North Korean and Iranian citizens even get US Visas?  I’ll have to try Cuba next time and see if they still give me the discount when I show up.

          3. North Korea is so incredibly tight with people leaving. When they did several family reunions with siblings/parents/children in South Korea, they supposedly had a loyalty test and only allow the most loyal to North Korea to be part of the reunions.

            I can speak from experience of friends and coworkers that the US does issue visas to Iranians, and it’s really not that big a deal for Iranians to leave their country.  The US will probably issue visas for North Koreans, but the hard part would be getting permission to leave and the fact that the US has no official diplomatic relations with NK.

            Iran certainly isn’t as authoritarian as North Korea.  I know people who have left Iran as spouses of US citizens or permanent residents.  Some have even entered the US on immigrant visas.  Quite a few Iranians come to the US on student visas.  The US doesn’t have any formal diplomatic relations with Iran, but I believe visas can be handled by the Swiss embassy in Tehran as an intermediary.

            The policies for Iranian students studying the US were somewhat restrictive at one point.  They were only valid for a single entry within a three month period, which meant if a student returned, they would have to apply for a new visa to return to the US.  The policy has been changed such that the visa can be used for entry within a two year period and for multiple entries.


  6. Clearly discriminatory by race or nationality. Airlines will charge an Israeli, Palestinian, American, Chinese, French, British, Mexican, or Nigerian travel the same fare from NYC to LAX if they buy at the same time in the same booking class (and space was available at the same booking class). Why? Because airlines are COMMON carriers which cannot discriminate.

    1. But they DO have targeted promotions, usually through a travelers frequent flyer account, that cannot always be transferred. Many of these are based on the address of the member.

      They also have directional fares. Why is a LAX-LHR RT fare different from a LHR-LAX rt fare for example? 

      1. Promotions to similarly situated Frequent Flyers are not discriminatory. Directional fares are not discriminatory since similarly situated people can still buy that fare at the same price. The LAX-LHR does not have to be the same as LHR-LAX fare by law. But all similarly situated people should be able to buy LAX-LHR at the same price.

    2.  That is simply not the law.  Common carriers cannot discriminate in that their services are open to the entire public at large.  Beyond that there are no special nondiscrimination rules that common carriers have to follow that are greater than any other business.

      What you are envisioning would be the situation where a merchant limits his buyers to other merchants.  For example some hair care stores will only sell to licensed barbers, beauticians etc.  A common carrier cannot do that.

      But they can certainly carve out different, preferred classed of folks.  That’s why certain people pay for checked bags and others. Why certain people get targeted discount codes, why certain business and organizations can negotiate discounted airfare, etc.  Government employees, (my entire family but me) get the best deals on airfare.

      Regarding discrimination, race and nationality aren’t synonymous.  Equally importantly, the civil rights issue is national origin, not nationality.  Tons of sensitive scientific jobs cannot be held by a non-citizen.  However, once you become a citizen, your national original is a non-issue.

      1. You are wrong with carving out fares (legally). Airlines can and do set fares by PASSENGER TYPE (e.g. Military, Seniors, Children 2-11 yrs, Seamen, etc.). The passenger types are similarly situated – they serve in the armed forces, the are at least 60 years old, the are aged 2-11, they are licensed seamen, respectively.

        The point is when one is standing in front of an airline counter trying to buy tickets (assuming space is available), and there is a 21 year old Israeli, Palestinian, and American. The airline cannot sell (a NYC-LAX ticket) the Israeli a fare for $500, the Palestinian $1000 and the American $750 for the same class and type of seat. All these 21 year old people ARE SIMILARLY SITUATED.

        I have worked in the Airlines and Telecommunications industry since the 80’s. They are both COMMON CARRIERS. I did/do lots of pricing work. By this time I know what I am talking about.

          1. The individual States kept the right to regulate intra-state airline travel. That’s probably why the Hawaii Legislature can do this.

        1. I don’t disagree that the airline price differently by group.  What I am saying is that your understanding of American discrimination and civil rights law is simply wrong.  What you are doing is creating groups, military, student, seniors, etc. and stating that its nondiscriminatory since within the group, all are treated equally.  That has been discreditted in civil rights law.  If you are interested, it arises in the religious freedom context, i.e. one standard for religious people regardless of religion, and another for non-religious people. 

          The position was demonstrated to fail by changing military to white, students, to black, seniors to disabled, Seamen to old folks and you see why that logic was discreditted in the early 90s.  I can’t say, well, I treat all blacks the same and I treat all white the same, but differently from the blacks so its ok.

          To create a proper discrimination argument, and I have successfully litigated civil rights cases relating to gender and race, you have to create a single group, a discrete and insular group, and compare people inside that group to people outside of that group and see if they are treated similarly.  The more discrete and insular the group (i.e. harder to move in and in particular out) the higher the civil rights protection.

          For example, many car rental places charge more for people under 25.  It’s not enough to say that we surcharge all 25 year olds so its not discrimination.  No, if you are in the group you have the surcharge, if you are outside of the group your don’t. Do car companies discriminate against under 25 year old people.  Absolutely. Is it illegal? NO. Because, as all people will eventually leave the group its protections are low.  By comparison, older folks have much greater protection because once you are in the 40+group, you remain there basically until you die.

          If you want the case that clarified civil rights law and explains this analysis in detail please see Caroline products and pay particular attention to footnote 4.

          1. I don’t disagree with you in general because I don’t see what the difference is between a Military passenger and a poor guy/gal who has to visit his/her dying mother or friend. For that matter I don’t like any special groups either. Lady Justice has a blindfold. But, Lady Liberty doesn’t. We might be Free but, the fact is we are not all equal.

    3. Not exactly true – if you a ticket FROM your home country, it is lower due to the added taxes for tickets FROM a country not your own – also some tickets CANNOT be purchased from your home country at all – like a Visit US pass cannot be purchased in the US, and a Visit Europe or Australia pass MUST be purchased here in the US.  It is not a case of discrimination, but as a way to track purchases, and offer incentives to foreign travellers.  And try renting a car in Ireland or Italy without the proper coverage – if you’re from the US, no go!  NOT the same restrictions for locals. 

      1. Americans residing abroad can buy VUSA ticket overseas. Ireland is a disaster for rental cars, period.

        I think the whole discussion is whether an action is discriminatory OR does it rise to the level of illegal discrimination. The latter is hard to determine.

        IMO a lot of discriminatory behavior is not necessarily illegal but nonetheless irritating and OK to whine about.

          1. Italy car shenanigans is well made up by good food and wine. All’s forgiven when one’s satiated and inebriated.

  7. As a Dutch citizen I wanted to make a reservation for a rental car at the Hertz website for next summer in US. Found out that the German Hertz website was cheaper than the Dutch site and that the Belgium site was even a LOT cheaper. There was a difference of hundreds of dollars. After making a phonecall (I discovered the helpdesk for all European countries are gathered together in Dublin) and complained about that fact, I managed to get the rent for a Belgium rate… On my question, “why practising this discrimination”, the operator told me it is according the livingstandard of that certain country!?!? Well I don’t think these 3 countries differ that much and apart from that, I’m renting the car in US… Perhaps I should have tried the Greek website/callcenter… 😀

  8. I have experienced this issue a few times. More than one nationalitiy, the IP address is more often used for that. I get around it with a VPN that allows me to mask my IP.

    IHG does that often, for instance, for its hotels.

  9. The United States, “land of the free, home of the brave” quite often doesn’t treat people from out of the country equally.
    Take the new TSA Initiative to get people through the screening faster… is offered, among other things, to “nexus” members, but only AMERICAN Nexus members, even though all Nexus members have to go through the same screening to get a nexus card.

    There are many other examples of things like this, but it only seems to happen in “America”.  Although I do not agree with it, what the car companies are doing is in line with the “American way”, which is to treat Americans differently than everyone else.

    1. I, personally, have no problem with American companies and American Government agencies treating Americans “better” than non-Americans. Why not? Our laws, our Constitution, our rights are all designed for our citizens, not some other country’s citizens. There’s a difference between “improving” the treatment of Americans over foreigners, and “degrading” the treatment of foreigners beneath what may be considered “acceptable”.

  10. The issues of nationality and residency are getting conflated a bit here.

    1) discriminating on the basis of nationality – ie between an American and an Israeli living in New York with a US Mastercard and a US drivers’ license – is morally wrong and may well be actually illegal.

    2) discriminating on the basis of residency – ie between an American and an Israeli living in Tel Aviv with an Israeli Mastercard and an Israeli drivers’ license – is done all the time across almost all industries, including almost all aspects of the travel industry.

      1. So, (forgive me if this point has been made today), the wording in the poll question should be changed from “nationality” to “country of residency” accurately reflect what is being done by the car rental company?

  11. This practise is not limited to car rentals, or to the US.  Try renting a car from Budget in Brazil:  much different pricing if you are Brazilian (less) vrs “American”.  How about tourist attractions in Florida?  Different pricing (again, less) for Florida residents versus out-of-state visitors.  Or simply shopping for goods in markets all over the world – if you are local you’re likely to get a most favorable price over a tourist.  

    1. Disney gives a discount to (similarly situated) Florida residents – but the discount is not only for whites or Jews. They are for ALL Florida Residents.

      1. Fundamentally, what’s the difference between Disney-in-Florida giving all Florida residents a discount and, say, all Michigan residents? Or Nova Scotians? Or Norwegians? 

        1. ‘Fundanmentally’ its not illegal . . . 

          If disney only gave discounts or prevented discounted to whites or jews then THAT would be illegal . . .

  12. I vote yes. We might not like it as consumers, but think of it from the company’s point of view. A foreigner is more likely to have an accident, driving in unfamiliar streets with possibly unfamiliar road signs and in some cases on the wrong side of the road.

    Insurers discriminate. Car hire includes the owner taking on risk that the car will be damaged, and the risk changes according to who’s driving the car. 
    Would we prefer that everyone paid the same – which means most of us would be subsidising the more dangerous drivers?

    Or, is it possible that the likelihood of the driver demanding and pursuing a refund is greater if they’re American? Many people would say that they’re generally more confident / arrogant as consumers. It’s a cultural and personality thing, not an insult, and it’s also far easier to go after a refund if you speak the language, understand the local laws and have access to legal representation. Foreigners are likely to just give up.

    1. But the example given in this case shows that the AMERICAN (like you and me I suppose) will pay HIGHER than the ISRAELI in New York JFK airport. Am I correct? Why would Americans pay higher than Israelis in NYC? What logic?

  13. Chris Elliott is correct. I double checked with I looked up the rates for JFK for the same date. The Israeli rates are LOWER than the American rates.  The same car type will be picked up at the same airport, at the same time. This is disgusting !!! Where are the consumer advocates ???

    I took a picture of the screens side by side. The pic on the left is for Israelis. The one on the right for Americans. The same compact was $68.20 for Israelis and $84.99 for Americans.

    Go take a look. Are you fuming now?

    1. I did Europcar – first in Germany and then in France – posing as American/Brazilian/Chinese and as assorted Europeans. Summary:

      Germany: €82-€89, except Germans; €95 – maybe an airport thing? Finns and US’ers get the best deal; Scandinavians pay the most – but I suspect that’s a currency conversion issue because it’s only like €2 more than the European average.

      France: Brits and Brazilians €81, Finns €94, and €99-€102 for other Europeans. Chinese €110. €75 for Frenchies but only if they book&pay online – pay on pick-up is €123. And, finally, Americans get to pay a whooping €135!

      Conclusion… yeah, eh!? I’m lost. The only piece of logic in all this was that the German car came with winter tyres and the French didn’t!

      1. Philippa, it seems like it is the WEBSITEs that are doing that fuzzy marketing stuff (like what emanon described). If I use my GDS and select EuropCar, I don’t get these rates that vary by Nationality.

        1. But “normal people” don’t have GDS’es – they’d go to the site, pick their country of residence, and pay these fuzzy prices.

          1. That’s because GDS a long time ago was required to be NON-DISCRIMINATORY by US law. That was relaxed quite a bit after deregulation but in general is is non-discriminatory. The web has no such rule.

            So if one can game the web, then they should. The web is a free-for-all venue.

  14. Interesting.  Your comparison to the grocery stores made me think of our local Harris Teeter stores which has specials for internet “E-Vic” customers only.  Well, what if you don’t have access to a computer?  There are lots of folks out there who can’t afford one.  Hmmmmm

    1. That’s why I hate HT. At least at Lowe’s Foods, they have computer that you can use to sign up for the online specials program, and then when you come in to the store, you can scan your card and it will tell you what the online specials are for that day.

  15. Frankly, the good ole USA isn’t as good as it is old.  I hope a consumer rights attorneys sees this and Runs with it.  Also, I might point out that women have been paying taxes for police services the police refuse to provide…,

    but the difference is they wind up dead. So I can’t quite get too upset over car rental prices.  As the kids would say, “You feel me?”

  16. Quick primer on discrimination law.  Discrimination is not illegal unless its invidious. The test of whether discrimination based upon your inclusion in a group (race, religion, etc.) is a three parter

    1.  The group is discrete. That means it’s well defined: race religion, gender, etc.

    2.  Insular.  Hard to get out of once you are in, e.g. old age, disability, race, etc.

    3.  History of discrimination.  The greater the history the more protections you have.

    At the highest levels are race, religion, national origin (not nationality)

    Mid-tier is gender

    Low tier is artificial groups that are part of you such as being a student.

    The higher the tier, the more compelling the reason for discrimination by either the government or business.  That’s why a religious organization can limit its membership to people of that religion, but no one else can discriminate against you for your religion.

    1. Carver, please look at the picture I posted above.
      Avis charges higher for the same car for Americans compared to Israelis. Is that Discrimination?

        1. So the cruise line that gives NY residents a discount better, than a resident of another state or country, on the crusie saling from NYC is illegal?

          1. Nope – because New Yorkers are not a nationality . . .. NATIONAL ORIGIN – New Yorkers are ‘americans’

            Now, I presume you meant ‘countRy – not ‘county,’ but in that case if the foreign resident comes to NY and files a complaint with the NY regulators – yeah. It never happens because people from other nations have common sense and understand that sometimes locals get better deals . . .

        2. Incorrect – New Yorkers get discounts on cruises leaving from there all the time – and benefit from dynamic pricing in that case

          1. I think you are incorrect.  New yorkers are NOT a national origin.  They can give a discount on a cruise – it becomes illegal if they give someone outside the US a discount or refuse. 

            Guys – lots of stuff is illegal that no one ever files a claim about. . . 

          2. But the discount was given to a group – not a race or nationality.  And that is what the car companies are doing as well.

        3. But in this AVIS case, aren’t they giving different rates to residents of Israel and the US, regardless of their national origin?


    The article puts forth some incorrect information.  Avis is not discriminating against people based upon their nationality or citizenship, but rather their residence.

    An American citizen, born and raised, but living in Israel is not a resident of the US and cannot check the box.

    Similarly an Israeli citizen who is a permanent resident of the US can and should check resident of the US.

    The article or OP failed to appreciate the substantial difference between residency and nationality.

      1. That would be a business decision by Hertz. I can surmise any number of possible scenarios.  Perhaps Hertz is trying to reach into the Israeli market and thus is giving incentives.  But since the discrimination is not invidious, a very low level reason is acceptable, at least legally.

        1. You mean AVIS, because Hertz does not practice this kind of pricing. I do find it interesting that AVIS also prices the JFK cars cheaper for Brits. Don’t know why because they drive on the other side of the road and potentially are more dangerous drivers in NYC compared to Americans.

  18. Chris, as far as I know egalitarianism is more French than American. We are the land of the free (meaning to be independent from England). I am not sure the founding fathers ever thought of being egalitarian – after all some of them owned slaves.

  19. Is there anybody so opposed to these practices that they actually REFUSE TO ACCEPT the lower “discriminatory” rates (e.g., for AAA, AARP or “company/government” connection) that the rental companies offer? Let’s be honest. It’s not “discrimination” per se that we don’t like. It’s being discriminated AGAINST.

    Instead of wringing hands over these practices, however, let’s hear some practical strategies for gaming them (and I don’t mean cheating, but playing the economics games to our own best advantage).

  20. Is there anybody so opposed to these practices that they actually REFUSE TO ACCEPT the lower “discriminatory” rates (e.g., for AAA, AARP or “company/government” connection) that the rental companies offer? Let’s be honest. It’s not “discrimination” per se that we don’t like. It’s being discriminated AGAINST.
    Instead of wringing hands over these practices, however, let’s hear some practical strategies for gaming them (and I don’t mean cheating, but playing the economics games to our own best advantage).

  21. First of all, “dynamic pricing” sounds like corporate-speak for “we’re going to randomly charge you whatever the heck we feel like”.  The only thing dynamic about it is one’s temper when the find out the truth.

    However, I’m sure the pricing is based on actuarial tables, insurance rates, etc.  I think a better example of what’s happening here would be to compare it to insurance.  All sorts of factors go into deciding what a person pays for insurance and, yes, nationality is one of those factors.  Some countries have worse drivers than others.

    My husband and I can have full coverage on two three year old cars for $600 every six months and coverage for my husband is higher than for me.  One of our kids and his wife can’t even cover one car for that amount. 

    1. Dynamic pricing should be dynamic purely because of supply and demand. Nothing else. Otherwise it smells like discrimination, sounds like discrimination, and looks like discrimination to me.

        1. My comment was to differentiate the use of the term DYNAMIC versus TARGET pricing. DYNAMIC does not carve out special groups. TARGET pricing does just that.

      1. Tony, you must have priced intra Europe BD flights for clients that were much lower that what locals could get.  What about rail passes?  This isn’t discrimination, it is about encouraging a tourist to rent a car.

        1. Rail Passes in Europe? If I fall in line or buy from a machine in the terminal I pay the same price as Italians of French or whatever.

          Giving ALL tourists of any nationality a discount is fine for the purpose you just said.  But have different prices for different tourists does not seem fair to me.

          1. Tony, if has in the past, but not sure about 2012 pricing, that rail passes purchased here for US citizens are cheaper than getting them in Europe.  Not point to point tickets, but the passes.  Tourists ofter get pricing that locals can get.

      2. Sounds nice but in reality that would be horrible. Consider auto insurance.

        Supply and demand implies a choice to decline the goods or service.  If you drive a car you must have insurance.

        Secondly,  drivers in an urban area such as Los Angeles are much more likely to be in an accident that the Bay area.  My insurance dropped when I moved years ago.

        Thirdly, age is gender makes a huge difference.  A 16 year old male is a substantially higher risk than a 40 year old female and should be charged based upon the risk he presents

        Conversely females pay more for health insurance than the same age male

        We have to be broader and acknowledge that prices need to be based upon good business practices.  And discrimination isn’t a bad word.  Only when its applied badly.

        That’s why we have seperate bathrooms for men and women but not for different races/nationalities

        1. Auto insurance have data that compute risk by zip code or location. They are simply pricing RISK.

          If car rental total rates include the CDW cost, then I can understand that the CDW risk can change per type of driver.

          But to have different basic rates for the same car, same location, just because of country of residency? That looks so unfair and discriminatory to me. (I don’t know about consumer law. I’m just stating my own opinion)

          1. Being philosophical… The difference between LA and the Bay Area is geographic. LA drivers get in more accidents than BA drivers, therefore BA drivers get cheaper insurance. If this form of geographic discrimination – CityA vs CityB – is OK, then why not also StateA vs StateB – or CountryA vs CountryB? If US residents have more accidents than residents of Israel or Brazil or Tonga, or they in some other way are “more expensive” customers… why would it not be OK to charge them more à la LA drivers?

            I have no idea if this is the case; it’s the principle I’m curious about.

          2. IMO risk-based pricing is fine. That’s why drivers below 25 yrs old pay a higher insurance rate. Your car insurance rates in the USA depends on where you are. Make sense since some areas are more dangerous than others.

            But car rental rates (before insurance) really should be the same. I can understand giving a discount for a PROMOTION for a limited time because they are trying to boost sales from a particular country if it is marketed there. But to market INSIDE the USA for ISRAELIS and give them a lower rate. That seems very odd to me. And so, I feel discriminated against just because I’m an American.

  22. In the years I have been in this business, I have seen other rates for travel components be less for ‘visitors’ to the US than what US citizens get.  In reverse, US citizens get lower prices in Europe on certain travel components that locals to promote tourism. 

    I have seen something similar in ads at various businesses to promote new people into their establishment.  Gyms are one that you will see incentives that current members can’t participate in.  Many bars have done away with ‘ladies night’ where drinks cost less for women than for men, but I believe in some areas this practice still is found.  Restaurants in many cities around the US give a discount to visitors that locals can’t get.  Look around, you see this practice in a lot of other places.

    1. The difference is the AVIS determined the rental rate (in the same airport, JFK) depending on one’s country of residency when one is looking at Avis USA’s website. Hertz doesn’t. Hertz’s USA website does not even ask your country of residence. Interesting that Hertz has this disclosure added in GDS CARS – RATES NOW ALSO VALID FOR NY RESIDENTS

      Added: Also those AVIS rates don’t look like a promo. They look standard, to me.

      1. But they may just offer lower rates across the board to entice them to rent – they won’t advertise as special pricing – we get those same benefits travelling abroad, its just never been something most have been aware of

        1. Cubans and Iranians pay less than Americans, too?
          I’m using a USA website for Avis, so I presume they are marketing to people INSIDE the USA. That said, why should an Iranian inside the USA pay less than me an American inside the USA?

        2. True but in most cases those cheaper rates need to be purchased overseas (e.g. VUSA). In AVIS case, the purchase can/may be done inside the USA and the foreigner will pay less than the American. So they are enticing foreigners who already are INSIDE America.

  23. I answered no because I do not think that they should charge a different price. Howvere I have always said that a business can charge whatever they want. It is up to consumers to decide if the deal is worth it. Companies that make bad decisions go out of business.

    1. I agree, except I do not want to allow business to discriminate in a way that offends our American values.  Discrimination should never be to put others down or offend the notion that we are all people.

      Ladies night make sense cause it brings us guys into the bar 🙂  Prefential treatment to seniors is ok because unless you die, we’ll all be seniors one day.

  24. BTW, if is very common to see in rental car rates at airport locations that an airline ticket is needed to obtain a certain low rate.  So this resdiency rate doesn’t surprise me and I would not call it discriminatory.  Kamaaina rates exist in Hawaii that you the tourist can’t get.  I have seen hotels around the US have rates only good for local residents to encouage weekend getaways. 

    All this talk on discrimination is a bit silly.

  25. How do the car company spokespersons explain the bogus “no vehicles are available for the dates chosen” response when it appears only for certain countries?

    That is not only discriminatory (the product is not available at any price for some people) but the displayed message is patently dishonest in that case (i.e. there ARE vehicles available, the company has just opaquely decided not to rent them to residents of certain countries).

    1. Renter: Do you have any cars available?

      Rental Agent: Yes we do! May I see your driver’s license?
      Renter hands the license to the Agent.
      Rental Agent: Oh. I assumed you were a US resident. I see you are a resident of Israel. I apologize, we have no cars.

      1. On the contrary:
        Rental Agent: Hmm, I see you are from Israel. Lucky you, I’ll charge you less than the American. Are you sure you don’t have dual Citizenship? If so, I have to charge you the American rate.

  26. have seen this when renting a car in the UK – rates for residents of the US almost twice as much as for Europeans – sleazy…

  27. LAN-Peru Airlines does this.  You get different pricing based on whether you are buying from the LANPeru website or their main corporate site.

  28. Isn’t national origin discrimination in public accommodations illegal in New York?  Travel is a public ‘accommodation’ essentially – just like airlines, taxis, private bus companies and hotels.    Charging a higher rate is discriminatory.   file a complaint with the appropriate government regulatory authority.   You need to prove it though – same car class, location, arrival time the only difference being national origin.

  29. If you buy an airline ticket from Pittsburgh to London here and pay for the same ticket in London the prices are toally different by big %’s. Where you reseve, how you reseve and when you reserve anything in the travel industry affects the pricing. If you like the price, you pay for it, if the price is not to your liking, pass. Analizing  travel is anal at best. It just makes for some cool articles….and that pays the bills.

  30. I can kind of understand why a company would do this.  I’m a good American driver, but if I rent a car in England where they drive on the other side of the road, I am almost certainly at a higher risk for a collision.  Same goes for driving in a country where I do not speak the language and cannot read the road signs.  I am at an increased risk for an accident. 

    Also as a foreigner, it is harder for the company to go after me and retrieve money if I do not pay my bill or open a dispute on my credit card.

    1. Except, in some cases it was noted that US residents are paying more than residents of other countries for renting a car in the US. 

  31. Got that one right. Car rental agencies should possibly be able to change the insurance rate however. Foreigners don’t have as much experience driving in the US and may be more susceptable to an accident. They may be at a higher risk for accidents, but not necessarily. Interesting what other have to say.

  32. The comments about New York remind me that Hertz, Dollar and Thrifty used to have special surcharges (as high as $55/day) for all NYC-metro area rentals by drivers with Brooklyn, Queens, or Bronx addresses.

    The charges were theoretically introduced because of NY State’s vicarious-liability laws, but that explanation made no sense because Manhattan, Staten Island, and non-NYC residents were usually exempt for some reason.  

    I had not heard that those surcharges were ever eliminated, but I just checked and they appear to be gone from the terms & conditions language now (there was apparently a threat of local legislation in 2010 which may have done the trick).

      1. I believe Hertz dropped the surcharges a few years ago, but Dollar & Thrifty still had them as recently as 2011.

        There were multiple lawsuits going back to 1992 seeking to ban these types of surcharges.  I’m curious on what grounds the city and consumers ultimately prevailed?   

        I see lots of historical media reports online that describe the problem, but I’m not finding any that report on the apparent resolution.

        1. I don’t hear about this anymore in the Queens Area where my office is (between LGA and JFK). I suppose so many folks have their own cars in Queens where parking is easier than Manhattan. Since people from Manhattan are special and don’t get taxed (with this) then maybe nobody complains anymore. Besides it’s been a long time since NYC cared much about people in the poorer boroughs. (Sarcasm as usual.)

          1. You don’t hear about it anymore because Hertz apparently ended the practice in 2006 and Dollar-Thrifty must have recently joined them (at some point after January 2011 which is when the most recent complaint I found online was posted).

            I’m curious what happened: did the companies voluntarily decide to stop defending the surcharges?  Was there a court ruling or a settlement?


          2. The problem with this thing is that it get’s added when you show up and show your driver’s license. So you just can’t tell from your reservation if there will be a surprise.

            Dollar add 4 taxes for JFK, today.
            11.00 PCT RENTAL TAX PER RENTAL 
            8.88 PCT STATE TAX PER RENTAL

            That’s already a total of 34.63% tax before the CDW BS.

            Can anyone afford more?

          3. True that it wouldn’t show up in the quote (even if you reserved with a Brooklyn / Bronx / Queens address) but the following used to be buried in the fine print under “Additional Fees” in Dollar’s General Terms & Conditions:

            Higher rental rates for New York City (Brooklyn, Bronx, and Queens) residents renting in New York, Newark, NJ, and Philadelphia may apply as follows:

            For Brooklyn residents, the rates will be $77 higher per day.
            For Bronx residents, the rates will be $65 higher per day.
            For Queens residents, the rates will be $7 higher per 

            The above paragraph is now gone from the Terms & Conditions on



            I agree about the taxes in NY (and elsewhere). I have saved money in some cities by skipping the airport counters and taking a taxi straight to a neighborhood rental location (returning at the airport doesn’t usually cost extra paradoxically)

          4. I wouldn’t be surprised that they dropped this discriminatory fees when “richer” folks started moving to Park Slope/Prospect Park, Cobble and Boerum Hills areas. Brooklyn (and the Bronx) is not was it used to be. Rental car companies cannot afford to alienate the new folks who now live in Brooklyn. They have to be treated like Manhattanites.

        2.  @Michael__K:disqus One of the things that drove me to live in Connecticut is that in America, you are determined by your Zip Code. I hate the commute but there are tradeoffs. Mike I suppose you are from this (NYC metro) area so you understand me.

    1. @Michael__K:disqus  I think the NY Rental Car companies dropped this charge because of the Graves Amendment. 

      The Graves Law (49 US 30106), passed in August 2005 as part of the SAFETEA-LU highway bill, created a uniform standard against liability without fault by preempting state vicarious liability laws imposing liability on non-negligent leasing and renting companies. Since its enactment into law, the highest courts in several states, including New York, Florida, and Minnesota, have upheld its authority. Federal circuit courts and the U.S. Court of Appeals have also ruled in support of the Graves Law. On July 13,2010,  the U.S. Court of Appeals for the Eighth Circuit invoked the federal Graves Law (49 USC 30106) in ruling that a vehicle lessor could not be held vicariously liable on the sole basis of vehicle ownership. Note below that even the NY Court of Appeals strongly affirms the authority of the Graves Amendment to preempt New York’s unlimited vicarious liability law

      On September 11, 2006, the Supreme Court in Queens County, New York denied a motion made by Nissan Infiniti, LT in Graham v. Dunkley and NILT, Inc. to dismiss a vicarious liability claim. The motion to dismiss was based on the federal statute (49 USC 30106) that prohibits states from imposing liability solely on the basis of ownership. Judge Thomas Polizzi, in denying the motion, held that the federal statute “is an unconstitutional exercise of congressional authority under the Commerce Clause of the United States Constitution, Article I, Section 8.” The action in Graham v. Dunkley and Nilt, Inc. is the first case in which a court has ruled against the constitutionality of the federal statute. Court Opinion – Denial of Motion to Dismiss Graham v. Dunkley and Nilt, Inc.The trial court decision in Graham v Dunkley was reversed by the Appellate Division, Second Judicial Department of the Supreme Court on February 1, 2008. In its decision, the appellate court stated that “we agree with the weight of precedent that the Graves Amendment was a constitutional exercise of Congressional power pursuant to the Commerce Clause of the United States Constitution.” The appellate court declared unequivocally that “actions against rental and leasing companies based solely on vicarious liability may no longer be maintained.” Appellate Court Opinion and OrderOn April 29, the state’s highest court, the New York Court of Appeals, dismissed the plaintiff’s appeal of the lower appellate court decision upholding the Graves Amendment. This action strongly affirms the authority of the Graves Amendment to preempt New York’s unlimited vicarious liability law

      1. Interesting…. thanks!
        I guess it just took Dollar a little longer than everyone else to realize that the charges no longer had any basis (to the extent they ever had in the first place).

  33. Private companies have variable rates all the time for a variety of factors.  Go to second and third-world countries and many times you must negotiate in person for your hotel, merchandise, guide, private car hire, and many other prices.  Most times, they double the price just because you are a foreigner.  I do not complain.  Just bargain them back down to the ground floor.

    Equal opportunity pricing is absurd.  Government control of pricing is just about the worst idea I have heard in this column.  Sharp consumerism and fair advertising, yes.  Authoritarian control of private pricing, absurd.

    1. There is a reason why we want some standards – it is good for commerce. Can you imagine if taxis don’t have meters? Or you have to haggle with a bus driver to determine your bus fare? In a lot of cities, they try to enforce a single FIXED taxi fare from the airport to the center (of the city). If there is no regulation (what you call Authoritarian control), then an airline, bus, train or taxi will be able to create INDIVIDUALIZED fares. Tom, Dick and Harry even if similarly situated may get charged differently maybe because of their willingness or ability to pay DYNAMIC PRICING. This is a sure way to price gouging and zero consumer protection – things you get in a third world country.

      1. Taxis are regulated public conveyances on public streets.  It is a very limited exception to market pricing to protect the public.  It does not apply to most private negotiations.

        Indeed, the USA used to have highly regulated airline and energy industries.  During hyper-inflation of the 1970s we had price controls. All these caused shortages and inefficiencies in the market.  Study your history.

        “Dynamic” has nothing to do with it.  It is the basic freedom in the market economy to price according to variables at any given time.  To regulate those variables in most industries is to stifle the efficiencies of the market.

        There is a vast difference between racial, religious, gender and other such discrimination,which is outlawed; consumer protection to assure honest and ethical dealings, and market pricing.  Study your economics.

      2. @TonyA_says:disqus , there is a difference between transparent information and freedom to vary prices and prejudicial discrimination on basis of race, religion etc.
        I’m all for transparent information regulations (like airlines advertising fares that include all compulsory fees and taxes; cruise line not allowed to shovel “fuel surcharges”  after the cruise had been already paid, burden-of-proof of damages on car rental companies etc.

        However, merely discriminating prices among costumers is not inherently unfair. Reasons by which they regulate taxi fares, or bus fares – for instance – is that the passenger is usually underpowered, at the mercy of the service provider. That is not the case with airline tickets or car rentals where the overwhelming majority of purchases are done well before the costumer actually uses the service.

        1. So you think it’s fair for Americans to pay more for car rentals at Avis JFK airport than Cubans or Iranians? You might want to rethink your position.

          1. If the price discrimination happens solely on a nationality basis, then it shouldn’t be legal. Usually, though, that happens as a result of IP-based pricing (online retailers have made IP-based (which they associate with ZIP Code) promotions and tailored offers for years), or language barriers.

            As I said in other comment, I had more than once found lower comprehensive rates (with insurance) for American cars quoting them in European websites. But you gotta know the language, as changing for “English” reverts to the British version whose pricing is more in tandem with American ones.

  34. I think we are going to see more targetted business offerings and pricing across the economy. For example, with Google now apparently tailoring advertising to each person’s online history, it wouldn’t be hard to advertise different prices to different people depending on their interests as evidenced by their usage of Google search.

    This has nothing to do with discrimination by race etc. but is really aimed at maximising revenue and profits.

    What the consumer can try to do is to obtain as much commercial intelligence as he/she can in order to at least have some basis on which to judge whether he/she is obtaining the best price and quality of service.

    We need more people like you Mr Elliott to help us!

  35. While I say no, I can understand that a rental company might charge more for an international visitor – someone who will be out of the country after the rental and hard to track down if there is an issue that comes up later. 

    But in the end  this is no different then creating a promotion, contest, raffel for only certain groups of people – it happens all the time.

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