U-Haul International Inc. and its parent company today settled charges that they tried to fix truck rental prices with U-Haul's closest competitor, Avis Budget Group Inc., the Federal Trade Commission said.
U-Haul and Budget control more than 70 percent of the "do-it-yourself" one-way truck rental business in the United States. If U-Haul had succeeded in its price-fixing plan, the two companies could have imposed higher prices on truck-rental consumers, according to the FTC.
"It's a bedrock principle that you can't conspire with your competitors to fix prices - and shouldn't even try. Consumers deserve better. The order announced today will ensure that U-Haul will not try it again," said FTC Chairman Jon Leibowitz.
The FTC's complaint alleges that on several occasions between 2006 and 2008, U-Haul tried to increase rates for one-way truck rentals by privately and publicly communicating with Budget, the second-largest truck rental company in the United States. However, the complaint does not allege that U-Haul and Budget actually reached an agreement.
The FTC said U-Haul's CEO and Chairman Edward J. Shoen discovered in 2006 that competition from Budget was forcing U-Haul to lower prices on its one-way truck rentals. In two company-wide memos in 2006, Shoen acknowledged the problem and provided a solution. For example, Shoen wrote:
"Budget continues in some markets to undercut us on One-Way rates. Either get below them or go up to a fair rate. Whatever you do, LET BUDGET KNOW. Contact a large Budget Dealer and tell them. Contact their company store and let the manager know."
At the same time, the FTC charges, Shoen told local U-Haul dealers to talk to their counterparts at both Budget and Penske - another truck rental competitor - and tell them that U-Haul had raised its one-way rates, and that they should now match U-Haul's higher rates.
The complaint alleges that Shoen invited Budget to collude again in 2008 after Budget declined to match U-Haul's price increases - this time, during a conference call with industry analysts. During the call, Shoen made statements suggesting that U-Haul would raise its rates, and would maintain the new rates so long as Budget did not respond by price cutting in a way that took market share from U-Haul. He added that Budget need not match the U-Haul prices exactly, but could lag behind by three to five percent.
The proposed settlement order against U-Haul and its parent company AMERCO bars them from colluding or inviting collusion. The 20-year order also includes monitoring and compliance provisions.