Tuesday 18 September 2012

So what about rental cars and tolls?

It's one of those neglected issues when road pricing comes along, which is to consider what happens when a hirer of a rental car uses an electronic free flow tolling facility and doesn't pay.  The obvious answer may be that the rental car firm should be liable, as it would be for any parking offences, but it wasn't obvious in Harris County, Texas.

The Houston Chronicle reports on a settlement between Enterprise Rent-A-Car and the Harris County Toll Road Authority of US$1.15 million in unpaid tolls and fines.  The problem being a combination of Texas law and the rental contract.  Rental companies could provide details of the hirer within 30 days to the Authority and make it the Authority's responsibility to pursue the hirer, which of course proved to be problematic.

You see elsewhere most rental car firms take credit card details that they retain to cover any such fines or fees.  However, this law encourages the rental car firm to pass on the responsibility, so that it doesn't face either the administrative cost of processing the payment or the bad customer relations in charging it.  Enterprise thought it could avoid responsibility, but eventually relented.

Enterprise now does exactly what I described above, which of course it should have done so in the first place had it bothered to see business practice elsewhere.

Enterprise now works with a vendor that ensures all of its roughly 1 million vehicles' license plates nationwide are listed in an account. The vendor pays the county when HCTRA's toll cameras pick up a plate on that list. The vendor then charges the tolls, with a fee, to the renter's credit card, said company spokeswoman Laura Bryant.

Bryant said the process is working, not only for tolls, but for red-light camera fines and parking tickets, too.

"That doesn't mean the process is perfect, but we're doing everything we can to make it as good as it can be," she said. "This has been a huge learning curve for everybody."

For a twentieth of the cost of this settlement, Enterprise could have got some consultants in (!) to develop the business solution to this problem based on best practice elsewhere.

Avis apparently settled for US$190,000 four years ago, and Hertz has toll tags installed in its Texas based vehicles effectively enabling it to be an easy part of the toll payment transaction at the end of the hire.  


If the law makes it clear that vehicle owners are responsible for tolls, then it is up to rental car firms to ensure that their contractual and payment solutions enable them to pass on these costs.  Toll tags in areas with extensive toll networks should enable toll transactions to be looked up and added to accounts, and the use of credit cards can ensure any residual transactions can be paid for.  With electronic free flow tolling increasing in reach and scope, it will become increasingly important for rental vehicle and vehicle leasing firms to find ways to ensure that liabilities for such charges can be recovered from those who initiate them.

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