Connecting state and local government leaders

As Cashless Toll Roads Proliferate, So Do Rental Car Fees

 

Connecting state and local government leaders

Rental car drivers will likely have to navigate more electronic tolls as states convert traditional cash tolls to electronic ones and build new cashless roads.

This article was originally published at Stateline, an initiative of The Pew Charitable Trusts, and was written by Sarah Breitenbach.

BALTIMORE — Traffic tends to pile up quickly on Interstate 95 as cars push south toward Washington, D.C. Electronic signs post the time it will take to reach the highway that encircles the nation’s capital and often the minutes quickly multiply.

Along the way, an alternate toll road that rarely sees traffic jams beckons to hasty travelers going south or west. But the tolls are electronic, and for out-of-town drivers in rental cars, that can mean extra fees.

Rental car companies levy additional charges when drivers use company-issued electronic transponders or pay-by-license plate accounts. The fees aren’t new, but the charges are increasingly drawing the ire of drivers and public officials as cash tolls disappear.

“In the past, you just paid cash,” said Mark Mannell, who runs CarRentalSavers.com, an online travel agency specializing in discount car rentals. “Now customers find themselves stuck on a [toll] road and depending on the rental agency, there may be an administrative fee.”

On the Intercounty Connector, the six-lane highway that shoots across two Maryland counties outside D.C., this means that a driver in an Avis rental car will pay $3.95 in fees, on top of a $2.11 toll, just to travel a few exits during rush hour.

And once drivers activate the transponder by passing under the highway’s gantries, they will have to pay that $3.95 fee each day they have the car.

Avis caps its fees at $19.75 a month in Maryland. There is wide variation among rental car companies.

For example, Hertz limits its rental fees to $24.75 while its subsidiaries Dollar and Thrifty charge up to $52.49 a week for “all inclusive” tolling. Dollar and Thrifty will charge drivers as much as $90 if they opt out of the tolling option but trigger electronic tolls during the course of their travels.

Several cities and states are taking action to curb the fees — or at least to make sure that consumers are aware of them.

Earlier this year the Florida attorney general agreed to a settlement with Avis and two of its subsidiaries, Budget Car Rental and Payless Car Rental, that requires the companies to disclose the fees on their websites and at the counter. They must also tell customers that they can forgo the company’s tolling system by using their own transponders or avoiding toll roads.

In a similar case, San Francisco is suing Hertz over a policy that City Attorney Dennis Herrera said takes advantage of tourists traveling over the Golden Gate Bridge. According to his office, fees charged by Hertz could turn the $7.50 toll into a $32.25 trip.

And in New Jersey, one lawmaker is trying to cap the fees rental car companies can charge on the rare occasion drivers have no choice but to use their tolling system. Assemblyman Paul Moriarty, a Democrat, has proposed legislation that would limit the fee to $2 a day and would eliminate the charge entirely if a rental car traverses an electronic toll road that has no alternative payment option.

Moriarty decided to introduce the legislation after a recent trip to Florida left him with a $15 fee for passing through a 75-cent toll.

“Consumers have choices every day,” Moriarty said. “We’re not interfering with that. This about when you have no choice.”

In some states, renters can avoid the fees by paying tolls in advance online. And in most places, it is legal to use your own transponder in a rental car as long as you add the car to your account. But with more than a hundred different electronic tolling systems around the country, the system that works at home may not be effective somewhere else.

A 2012 federal law requires highways to move toward a one-device system nationwide. The law is still being implemented.

And for some renters who don’t read the fine print of their contracts, the fees associated with tolling can come as a surprise because rental car companies contract with a third party that bills drivers at a later date.

“The car rental agencies do have all those fees within their contracts and listed on their websites,” Mannell said. “But it’s usually toward the end and in small print. They could do a better job of disclosing their fees up front.”

Industry Response

Rental car companies fought against Moriarty’s legislation in New Jersey, and last year Florida legislators failed to pass a similar bill.

“It’s a money maker for the rental car companies and it’s a convenience,” said Ken Philmus, a former toll administrator for the Port Authority of New York and New Jersey who now oversees tolling for Conduent, a company that manages electronic toll collection for states and cities. “They just haven’t been as up front about it as we would have liked to have seen.”

But rental car companies insist that consumers have options when it comes to tolling.

Dean Thompson, a vice president at Enterprise Holdings, which also owns National Car Rental and Alamo Rent A Car, pointed out that customers can pay cash where available, use their own transponder, or rent a device. He said capping the fees his company charges would prevent it from responding to fluctuations in the cost of maintaining in-car tolling devices.

Thompson told lawmakers in New Jersey that Enterprise does not have specific data for profits and losses associated with its tolling systems, but that there is significant cost to managing the program.

“On the back end they send us plate, date and times, which we then have to match up daily against our customers and figure out who drove through the toll road,” he said during a committee hearing in June. “Obviously we bill the customers. Thirty percent of the customers do not pay, so there’s bad debt.”

The devices are also subject to theft, he said.

Lisa Martini, a spokeswoman for Enterprise, said the company hands out literature in the Northeast to make sure customers are aware of their options. Martini also said the company shares information about its drivers’ toll, traffic and parking violations with local governments.