Hertz Cuts Refueling Fees; Other Car Renters To Do So Under Maryland Pact
Hertz this month reduced the fee charged to customers who do not refuel before returning a rental car, and began to offer a discount for drivers who buy a full tank at the time of rental. Meanwhile, car rental refueling prices are starting to receive attention from state agencies.
Previously, those who did not refuel a Hertz rental car prior to returning it were charged approximately $7.99 per gallon, said Paula Rivera, a spokesperson for the Hertz Corp. Now, travelers will be charged market price for fuel, plus a $6.99 fee. For those who choose to pay for a full tank of gas at the time of rental, Hertz will now charge market price, with a 15 cent per-gallon discount. In Canada, the discount is 5 cents per liter. The program applies to all corporate and some licensed locations in the United States, Canada, Puerto Rico and St. Thomas.
Hertz customers said the old fuel options were inconvenient, confusing and expensive, Rivera said.
It remains to be seen whether other car rental companies will change their refueling programs as well.
"The others are going to watch and see the reaction—if it's positive or negative—and move accordingly," said Dave Kilduff, managing director of ground transportation for Carlson Wagonlit Travel's CWT Solutions Group, adding that he did not know if the new refueling options would "change a tremendous amount of behavior."
"Corporations should still have their people refuel before they bring it back," he said.
While Hertz's new options will make a small difference in cost savings, the real benefit is the reduction of the "hassle factor," said David Mitchell, vice president of industry relations for BCD Travel. "It takes some of the pressure off that you've got to bring it back full," he said.
"We'll be able to put back into the corporate workforce thousands upon thousands of man-hours because it will save those corporate employees from having to drive around looking for gas stations in order to refill," Hertz's Rivera said.
Not needing to refuel a car prior to returning it would be beneficial to travelers, said Stacy Collins, travel manager for The Delta Companies, which counts Hertz as one of its preferred suppliers.
"A lot of times our travelers have really short trips and they go and come back in one day," Collins said. "If time is an issue, it will be nice that they don't have to stop and refuel the car. That would be the biggest benefit." While the company asks travelers to return the car refueled, it is not mandated.
Meanwhile, the price of car rental refueling has been investigated by at least one state agency. Maryland in June reached an agreement with several car rental companies to reduce refueling fees in the state, bringing them closer to market prices.
"We have made it easier to visit and do business in Maryland, and these agreements can be a national model for states that want fair pricing," Douglas Gansler, Maryland's attorney general, said in a statement.
The Maryland agreement "establishes a very bad practice," said Neil Abrams, president of Purchase, N.Y.-based Abrams Consulting Group. "As long as there is full disclosure and as long as it is not unlawful, they should price it as they want."
Abrams said such costs as labor and fuel storage add to a car rental company's expenses.
"The industry at large does not make money on fuel even with these charges," he said. "There is significant shrinkage in fuel inventory and these charges really are for the incremental costs, the disruption to the operation, to address the shrinkage of the fuel inventory for those companies that do have them."