BusinessWeek has a good piece on the inconvenient intersection between toll roads and rental cars. Where some might see inconvenience, rental companies see profits:

Rental companies don’t absorb the cost of tolls. Instead, they typically offer customers two options: paying a flat daily fee upfront to lease a transponder, or paying administrative fees of as much as $25 for each unpaid toll to the rental company, plus anything owed to the state. Both greatly inflate the cost of tolls for car renters.

That’s prompted demands by irate renters for states to intervene. “I’m angry beyond belief and can’t even imagine coming back to your state,” Roxanna Usher of Redwood Valley, Calif., wrote in a Jan. 13 complaint to Florida’s attorney general after Dollar Rent a Car billed her $30 in administrative fees for two unpaid tolls totaling just $2.74. “It’s disgusting what you’re doing to tourists.” Usher’s is among nearly 100 complaints received by Florida’s attorney general in the past 18 months from rental car customers.

The fees have led to lawsuits against rental car chains, including a suit filed against Dollar earlier this year by a Florida couple, Stephen and Anne Sallee, who rented a car in Dallas in November 2013 and got hit with $60 in fees for $4.70 in unpaid tolls. “Dollar’s charge is actually not an administrative fee; it’s a veiled, mischaracterized, and undisclosed profit center” that helps Dollar advertise low daily rental rates for their cars, the couple claim in their suit, which was filed in U.S. District Court in Tulsa. They’re seeking class-action certification for other Dollar customers assessed with similar charges. “Dollar prides itself on complying with all laws,” Paula Rivera, a spokeswoman for Dollar’s parent company, Hertz Global Holdings (HTZ), wrote in an e-mail. “We deny allegations that the company sells customers products they don’t want, and we intend to defend the case referenced vigorously.”

And this is why we can’t have nice things. Or, rather, why we can’t leave companies to their own devices when it comes to how to make a profit. Moneytraps, which I would define as a company’s ability to make a profit based on services uneasily avoided, rather than particularly desired. In an airline context, I consider luggage fees to be legitimate, but $200 charges on not-last-minute changed flights to be a moneytrap. In the banking context, it’s overdraft fees. In the rental car context, it’s gas refilling policies and… this.

It seems ridiculous that we should have to regulate what kind of administrative fees that rental agencies can charge, but when they use moneytraps like this for profit centers, outside intervention does start to become justified.

To be fair, the market itself may sort this out. The last time I was in Colosse, we rented a car that had a transponder in it for no fee if we didn’t use it, and a flat $2 (plus expenses) if we did. They made some money off of it, but not an unreasonable amount. Unfortunately, a lot of people really are fixated on the price tag, so a company like Dollar can advertise really low rates while making their profits off moneytraps.

The government itself shoulders some of the blame, in this case, and could potentially resolve the issue without any regulation at all. But the government, too, has incentives for people to drive through EZ-Tag lanes without having a tag. I was recently flagged for having gotten in the wrong lane, racking up a $4 in tolls… and $50 in administrative charges. No rental company involved.

Exacerbating the situation is that tag-only roads are becoming increasingly common. Where there is no toll booth and so if you don’t have a tag, you’re stuck. My view is that when states start doing this, they need to be really careful about either (a) offering tags at little or no cost, or (b) having cost-appropriate administrative fees for people who don’t have them.

The end result of our $54 bill was that Clancy and I finally decided to get EZ-Tags. Which a part of us resents, because as far as we were concerned, we’re willing to stop and pay a toll. But the cost of the tags are reasonable, in our state, and we’ll save money simply by not making errors.

I was actually pretty excited about our next trip to the airport, where we are most likely to get in trouble as far as tolls are concerns. The upside to resigning ourselves to the tags is that we’d be able to sweep right through the toll booths. Then we moved, and now the quickest routes to the main airport we use no longer require tolls anyway.

Category: Road

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5 Responses to When Toll Roads Meet Rental Cars

  1. But the government, too, has incentives for people to drive through EZ-Tag lanes without having a tag.

    Yes, there are incentives, but the financial penalty is to ensure that non-EZ Pass tag holders aren’t getting the benefits of the tags or driving off without paying.

    FWIW, the EZ-Pass only lanes tend to be very well marked around here, so there isn’t much of an excuse for somebody to end up in the wrong lane.

    But the cost of the tags are reasonable

    My EZ-Pass tag is free. 🙂

    • trumwill says:

      That justification might work when it’s $10, but not when it’s $50 or I’d argue even $20 for a single violation. At some point it’s “gotcha”

      Our tags were $5 a piece. Bank account required, which may be a problem for some.

      • In New York, there’s no monthly fee for the tags, and the $10 deposit is waved for those who use credit (or debit) card replenishment. If you want EZ-Pass, but prefer to use cash, you can go to the EZ-Pass service centre and make deposits there. The latter option is somewhat popular with immigrant cab drivers, and other owners of small cash run businesses. Also, one can make one-time cash replenishment with a debit or credit card.

        That justification might work when it’s $10, but not when it’s $50 or I’d argue even $20 for a single violation. At some point it’s “gotcha”

        I don’t know how bad the signage is where you are, but around here, if you’re incapable of figuring out which lane is for EZ-Pass only, you shouldn’t be driving. I have no qualms about charging $50 to somebody that’s not paying attention or is trying to cut the line.

        • trumwill says:

          If you’re in an area you’re not familiar with, or don’t travel often, it’s easy to miss even well-marked signs. Especially if you’ve never heard of entire streets as being EZ-Pass only. Or to wind up in the HOT lane.

          I’ve never sailed through an EZ Pass lane when there were tolls off to the size (unless I had a tag, of course). The three times I’ve gotten tagged are two cases of tag-only roads (no booths at all), and one case of taking the wrong exit into an EZ-Tag only lane. You ever take a wrong exit?

        • You ever take a wrong exit?

          Of course not. 🙂

          No, seriously, I rarely do, and I’ve driven overseas. Mind you, you’re talking to somebody that hates GPSes, and I find that it’s easier just to memorize a route and study Google Street View so I know what I’m looking for. Plus, I’m a bit biased as my dad was a car service driver, and I grew up reading maps as something that you do for fun so I may simply be abnormal.

          The three times I’ve gotten tagged are two cases of tag-only roads (no booths at all)

          I’m a bit surprised. Usually, most toll roads with open road tolling simply charge more for cash users versus a stiff surcharge.

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