Suit Accuses Car Rental Firms of Price-Fixing
A consumer group says a new California law allowing companies to advertise rates differently at airports enabled the problem.
In December 2006, the average daily rate for a mid-size rental car booked via the Internet at Los Angeles International Airport was about $60. A month later, the rate had climbed to $79, according to a study by a consumer group, the Los Angeles Times reports.
A class-action lawsuit recently filed by the group alleged that the spike was the result of illegal price-fixing by rental-car companies–enabled by a new state law that allows the companies to change the way they advertise rates at many airports.
The amended law, which was drafted at the urging of rental car companies, was rushed through the Legislature with three minutes of debate in a late-night session only hours before legislators adjourned last year.
Consumer advocates contend in the suit that the companies are using the law as cover for a coordinated price increase, and that car renters have lost tens of millions of dollars as a result.
The law allowed car rental firms to remove an 11 percent airport concession fee from their widely advertised base rental rate and bill it as a separate cost on each invoice. But rather than rates immediately dropping 11 percent when the fee was removed, they went up, the lawsuit alleges, and consumers were billed the 11 percent fee on top of a higher base rate.
Car rental company representatives, including Hertz's Richard D. Broome, recently denied that they had fixed prices and said the legislation actually helped the consumer by separating out all costs that contributed to the final bill.
For the week of Jan. 25, 2007, after the state law took effect, the average daily price excluding fees for the seven firms quoted on the Internet for the same car was $64.88, the study found. The 11 percent airport concession fee was an additional $7.21, and the new 2.5 percent California Trade and Tourism Fee added $1.62. Taxes brought the total to $79.
According to the Los Angeles Times, the lawsuit was filed against seven firms, including Hertz Corp., Dollar Thrifty Automotive Group, Enterprise Rent-A-Car Inc. and Avis Budget Group Inc., as well as against the California Travel and Tourism Commission, which is accused of violating open-meeting laws in facilitating price-fixing by the firms.
More Rental Operations

Brazilian Executive MBA Targets Growing Domestic Rental Car Industry
Rental car companies face a unique combination of challenges that are rarely addressed in traditional programs.
Read More →
Green Motion Expands Into Japan With Master Franchise Agreement
Japan's tourism industry, business travel market, and demand for vehicle rental services are reasons the country represents an important market for the company.
Read More →
ACRA Carrying Fuller Industry Load As AI and EVs Lurk In Future
The leading car rental professional business group details an active legislative, regulatory, and macro-trends agenda affecting car rental operators.
Read More →
World Cup Travel Data Shows Longer Car Rentals and More One-Ways
A recent analysis of FIFA bookings found varied demand patterns that influenced rental car pricing.
Read More →
A Leveling Force: AI Morphs Into A Rental Car Profit-Seeker
Revenue managers can’t match the emerging AI tools gobbling lots of data that could counter the competitive race to the rate bottom.
Read More →Stop Losing Money On Rental Tolls
Regardless of your rental fleet size and structure, fleet managers, executives, and owners can gain valuable insights into an often-overlooked area of fleet operations.
Read More →
Rethink The Future To Avert A Race To The Bottom
Rental car operators heard a sobering industry message and a stern challenge at the close of the International Car Rental Show.
Read More →
DriveItAway, Free2move Plan Shared Fleet Program for Independent Rental Fleet Operators
Vehicles would be placed with participating rental operations to support car renter demand and provide additional fleet capacity.
Read More →
Stellantis Recalls 1.3 Million Jeep Vehicles Worldwide Over Fire Risk
Stellantis is recalling more than 1.3 million Jeep Wrangler and Gladiator models worldwide over a fire risk linked to power steering pump wiring.
Read More →
Green Motion And U-Save Open Rental Operations In Guatemala
The brands will open their first rental car outlets in the country at La Aurora International Airport in Guatemala City.
Read More →
