When Rental Cars Meet Toll Roads
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.
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In Singapore, we have electronic road pricing (ERP). There is an in-vehicle unit in which you insert something called a cash-card (I don’t know if you have these over there). Cash cards were intended as this general alternative to carrying cash but few actually use it for general purchases even though it is an option. Now they are primarily used for paying parking fees and road pricing. If you have insufficient money in your cash-card when you go through an ERP gantry, you are fined something that amounts to at least 10 times the amount you failed to pay. (i.e. usually you might have failed to pay $2-$4 but you might be fined $50 or $150 or something. Its also regarded here as a blatant attempt by the government to extract cash from usReport
Zipcar doesn’t charge extra for the transponders. Also, free gas with rental.Report
Maybe there needs to be a resource that maps money traps and rent seeking by government, corporation and religion parameters.Report
EZ toll booths are, in my experience, incredibly popular since they greatly reduce traffic jams.Report
I support EZ-Pass lanes, and have had them in the past (in addition to now). Where it becomes a problem is when the transponder is the only legal option. That’s when I think reasonable accommodations need to be made for people that don’t have them.Report
I’ve never seen a situation in which EZ-pass (or whatever name you want to put on it) was the only option.
The OP references a car renter in Florida, and almost undoubtedly the toll road in question was the Florida Turnpike. Like rather a lot of people I suspect, I’ve driven the entire turnpike, and as far as I can recall, each and every toll plaza along the way, and each and every exit, has lanes for ticketed passengers to pay with either cash or credit/debit cards. If the renter in Florida used the EZ pass lane it was because of driver error. Innocent ignorance, perhaps, but still a mistake — she would always have had the option to pay the toll manually and avoid the fines even if she didn’t have a transponder on the car she rented.
So I’m not hugely sympathetic to her.
And I do see an administrative cost to the rental car company of paying the fine and having to seek reimbursement from the customer who saddled it with that liability. $25 seems a bit high given that it’s almost certainly just looking up the license number from the ticket and cross-referencing it with their own records of which customer rented which car on which day, but some sort of charge seems fair — someone has to do that cross-reference, and then go dun the customer, and meanwhile the customer is using the rental car company’s money to pay their traffic fine.Report
burt,
pa is trying very hard to get rid of the toll booth operators.Report
I actually crossed a bridge near Seattle that didn’t’ have a toll option which is how i ended up getting tagged and ended up paying Thrifty 25 or 30 bucks. I agree its rare to see a place without a manual pay option which is fine and the way it should be. The bonus of having manual toll booths is people with EZ pay passes get to complain about having to pay for toll booths when they are just so smart to have EZ passes.Report
A lot of places are trying to do away with manual toll booths (and I don’t just mean ‘manned’, I even mean automated ones where you throw your change in a basket to lift the gate).
Near me there are some toll roads have EZPass, and if you don’t have that, a camera simply takes a photo of your plate, and you get a bill via the mail.
Obviously, that’s not going to work straightforwardly for rentals, which is the problem here.
But there is no “manual” option in some places, and I expect that trend to continue.Report
@burt-likko Tag-only roads not only exist, but exist in proximity to tag/booth roads, and are becoming more common. I can’t state with absolute certainty that there was a toll booth that the complainants sailed past, but I’m not at all certain that they weren’t. They are usually marked as tag-only, but it’s the sort of thing you can notice only after it’s too late.
I’d argue that even if there was a booth, the fines should not be too punitive, because sometimes changing lanes isn’t an option. I considered the $10 fee that one state gave me reasonable. I consider the $50 to be unreasonable. Ironically, it was the latter that was tag-only.Report
In Houston, where the freeway system is a maze of mazes, with the confusion exacerbated by toll roads and toll lanes, it’s really easy to end up in the wrong lane or even on the wrong freeway, and that wrong lane or freeway is highly likely to have a toll, and in many cases a tag-only toll. In Houston’s defense, if you are thoroughly aware of where you are and where you’re going and how to get there, the signs warning you of the toll and tag-only lanes and freeways are sufficient warning. However, if you’re from out of town and, as many car renters certainly would be, it would be all to easy to wind up in the wrong place without the right tags.
Also, I hate Houston.Report
What’s regionally unfamiliar is how some states (FL) are building new toll-roads where the driver has to recognize and make a conscious effort to “exit” the toll-road to pay the toll. That’s not how it usually works anywhere else.
I can see how this is much more efficient and a better design, but I definitely buzzed several toll episodes before I even realized how it worked. Didn’t cost me anything, but yeah, changing rules and customs on the roads will lead to mix-ups like this. How to spot a mix-up vs. a scofflaw? Well, if you can find a way to find me to collect $25 plus fees… you can probably manage the data to ascertain a confused tourist vs. a habitual non-payer.Report
@marchmaine Even after you explain it, I still don’t understand it.
In some of those midwestern states, they had what I considered to be a superior formula, where it basically works like parking garages. You take a ticket when you get on, you pay when you get off. It took me a bit to figure out, but it was pretty awesome once I did.Report
The Golden Gate Bridge allows you to pay by credit card over the internet up to, iirc, three days later. I think my wife made the payment via cell phone while I was driving south on 101 through Marin County.Report
@greginak references the 520 bridge in Seattle (tag only), and when I left Logan on my last trip, the signs at the airport indicated that the toll road away from the airport was tag only.Report
@will-truman 334p
The New Jersey Turnpike also uses a ticket-based system, as does the New York State Thruway.Report
@burt-likko
Drive the toll lanes in Northern Virginia, Maryland, etc.
Most of them are ONLY EZ pass. There are lots of big flashy signs that say EZ Pass only.Report
@will-truman Yep, Ohio, PA, Indiana… lots of places use the ticket system, and that’s my point. In that model, everyone is stopped to pay the toll – some of us have access to a (sometimes) faster lane.
The newer engineering definitely seems much better in that the assumption is that you have the electronic gizmo that enables fast entry/exit/throughfare and only the pokey analog people have to wait in line.
My experience in FL was that I knew a toll was coming, I simply expected that we would all be routed into the toll corridor to navigate to our appropriate booth. Nope. Whoosh. Pokey analogs had to make a vehicular adjustment to participate in the toll system… otherwise carrying on was blissfully free at 70 mph.
Your picture above captures it exactly… if you don’t know the convention, you *will* miss the toll.
Now, the toll only roads are popping up all over… DC added a couple; I call them the rich people lanes and use them sometimes just because I can. They don’t go very far, just make it easier to get to Tyson’s corner…. which in the scheme of things was a pretty weak use of funds. But hey, DC.Report
I figured everything was like either the old way (EZ-pass with toll booths for non-transponder people) or the new way (EZ-pass for all with bills coming courtesy of the DMV) that I see on California’s toll roads and toll bridges.
Now y’all have educated me that things just aren’t like that elsewhere, I have a little bit more sympathy for the driver in the OP — if there is no choice but to use the EZ-pass system, then yeah, you do that and you expect that the system is wired for you to pay your toll somehow. That is what I’d expect (like if I take a bridge the Bay Area without a transponder; I can log on and pay my toll later over the internet, or if not that, the DMV sends me a bill).Report
My other issue with the E-ZPass/EPass system is that there is typically a built-in discount for using the transponder–you pay less per toll than if you use cash.
But if you’re too poor or your income is not predictable enough or bank accounts are too expensive to obtain a transponder, you pay full price. And tolls take a larger percentage of poor drivers’ incomes, of course. Yet another example of how everything is more expensive when you’re poor.Report
I find the transponder money traps distasteful, but an entirely foreseeable result of doing away with toll booths. Especially since a good chunk of the rental car business is business travelers, who have no trouble with the transponder fee. Although last time I traveled for work was to NH, but I flew into Boston. I went without the transponder & avoided the Boston toll roads (NH had a toll road, but they also had toll booths). Enterprise was going to charge me by the day for the transponder & I could not justify the cost when I would only need it for 2 days out of 7.
So I agree, toll agencies should have easy ways for travelers to pay tolls. Perhaps an app on the phone where you enter a CC number & the license plate info for the car.Report
We just bring our EZPass transponder which is usually compatible with whatever system is in place (not that we rent cars all that often). This might be technically against EZPass’s rules, but we’ve never had an issue with it.
I didn’t realize there were transponder-only roads out there. We don’t have any of them in my area.Report
Just ran into almost this situation. My husband and I were visiting Florida recently, rented a car, and took toll roads often. Usually there were clearly marked E-Pass, exact change, and cash with change (human-operated) lanes.
No biggie, we had cash and just made sure to get in the cash with change lanes. (Most of the tolls seemed to be $1.50 or $0.75.) But at one exit, there were only 2 options: E-Pass and exact change. It was a 75 cent toll. We had plenty of cash but no change, as we’d just paid the quarters when we had them at earlier tolls.
We were both annoyed and confused. My husband was driving and we ended up going through the E-Pass lane. I have no idea what penalty we will end up paying for that.
The next day of driving I kept every single quarter we got in change. I had $4.00 in quarters by the end and only encountered place with only the E-Pass and exact change lanes. I did the exact change lane, paid my 75 cents, and noticed they had envelopes to pay by mail if you didn’t have exact change. There were no signs to indicate the pay by mail option other than as you passed through the exact change lane, so naive travelers (like us) would have no idea that it was an option.
Got back to Ohio with $3.25 in quarters…
(BTW, here in Ohio we use E-ZPass. It’s good for most of the northeast and midwest, but does NOT work in Florida, so it would have done us no good if we’d brought it.)Report
The equilibrium price for rental cars is related to the long term risk adjusted rate of return of creating another branch of a rental fleet. They can get money via the daily charge, or via the add ons (navigation, fuel prepurchase, insurance, car class upgrades, Sirius, and toll violation charges). All in, they need to net a certain amount per car rented per day.
As companies compete more on head to head Internet sites on the daily rate, their pricing models have shifted overwhelmingly toward the add on fees. We see similar trends with the airlines and banks.
The winners are people who capitalize on the lower rates and are smart enough or lucky enough to navigate through the Fees and options (which are not always bad). The losers are those who cannot navigate as well.
Overall, I think we are better off with the current system than the old one. It is now much cheaper to travel if you travel wisely. In general I approve, though I admit it could be abused. I would suggest allowing competition to police it, along with transparency which can be provided via media sources such as this blog.Report