Transportation

When Does a $5 Toll Cost $30? When You're Driving a Rental Car


(An earlier version of this story ran online.)

Across the country, state highway authorities are replacing tollbooths with electronic payment systems that collect fees using windshield transponders. About 75 percent of U.S. toll roads have at least some cash-free lanes, and most newer turnpikes in Florida, North Carolina, and Texas have eliminated cash tolls altogether. “Cash is effectively being phased out,” says Neil Gray, director of government affairs for the International Bridge, Tunnel and Turnpike Association. Toll agencies argue the all-electronic setups benefit drivers by keeping traffic moving unimpeded through toll gates.

But what happens when you’re driving a rented car? 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.

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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.”

Many consumers also fume about the cost of loaner transponders. Charges run as high as $20.49 per day in New York City, for example, and often don’t reflect the discounted toll rates paid by pass holders on roads that offer both cash and electronic payment options. Last year, Hertz agreed to pay $11 million to settle a class-action suit filed by customers who said they didn’t know they’d be charged the daily fee whether or not they drove through any tolls. Enterprise says it offers a capped fee of $19.75 per rental.

Toll operators say the spread of electronic payment systems will help alleviate the problem by letting travelers bring their own transponders with them. Congress has weighed in on the topic, giving toll road operators until 2016 to make the various electronic payment systems work with each other so that drivers can use their devices nationwide. Florida’s SunPass has already taken steps to establish reciprocity with E-ZPass, which covers more than 23 million users in 15 states in the Northeast and Midwest. “This is a top priority for the industry to resolve,” says Gray, the turnpike association lobbyist.

That still won’t do anything to lessen the costs for renters who don’t have their own transponders. “This sort of technology was implemented and kind of caught everyone off guard,” says Jason Hoyh, an airport projects specialist with Enterprise Holdings, the parent of Alamo, Enterprise, and National. “You have travelers asking, ‘What am I supposed to do?’”

The bottom line: The spread of cash-free toll roads is prompting consumers to seek curbs on rental company surcharges.

Bachman is an associate editor for Businessweek.com.

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