Wednesday, June 6, 2012

CAR HIRE - the sting could be in the fuel

The investigator who ran out of fuel
Dear Car Hirers,
         David Shapiro, stockbroker and Sasfin Bank fund manager, has thrown a spanner into the South African car hire business in the column he writes for The Times.
         It was headed Profits fueled by clever charges. Paying R20 a litre to fill a hired car’s tank is just too dear. This amount was about double what was being charged at the pumps
         But by being too timid to mention the offending company he has tarred the entire industry with the same brush.
         Even my efforts to get him to disclose the name came to naught.
         He told readers that when he got a car from a well-known hire firm at Cape Town airport he drove to the R3 700 odd per night Mount Nelson hotel (no skimping on costs by his bank) and caught an early flight back to Johannesburg the next day.
         The car hire rate was R308, plus a R55 documentation fee; a R22 surcharge for picking up the car at the airport and R82 for the petrol – Total R466.
         He complained that the extras came to more than 50% of the main hire cost and he described these as clever marketing ploys to lift operating margins without the full knowledge and understanding of the customer.
         I hardly believe preparing an invoice is an expense a client should carry, he wrote. Why fine me for collecting the car at the airport? It’s an indefensible ruse, but nothing compared with the R82 I was levied to refill the tank.
         He explained that his journey to and from the hotel was no more than 40 km.
         I have no problem paying for fuel I consumed as long as it is fairly measured, but applying a disproportionate cost is iniquitous.
         He then followed his half hearted expose` with this pathetic statement that showed his yellow streak. I have no beef with the nameless firm (then why did he mention it at all) they have a bigger bank balance and stronger legal reach than I.
         In an effort to make sense of David's allegations the Dearjon Consumer Watchdog swung into action.
         I contacted the heads of some of the bigger names in the business and asked, When somebody returns a car with a partially full tank, which is then filled by your company; do they get a receipt showing the amount of litres, the price per litre and the total price similar to the receipt you get from a filling station?
         The answers I got from Hertz, Avis, Budget, Tempest and Europcar showed that in some cases the refill amount is arrived at by a complicated estimation system and generally customers don’t automatically get a detailed invoice of the fuel used.
         Most of them emphasised that they only charge the government regulated price.
         Joel Stransky, better known for kicking that drop goal that won South Africa the rugby World Cup against New Zealand in 1995, than heading a car hire company told me that at Hertz it depends on a number of factors whether the customer is charged according to system estimation or actual fuel pumped. These include the location of the fuel depots and whether the client wants the final invoice straight away. He added that the customer can always ask for a detailed break down of the fuel supplied.
         At Avis Keith Rankin told me their system of calculating fuel used was similar to Hertz and that the litres charged for were always reflected on the customer’s invoice.
         If you get a car from Budget the value on the rental agreement is a receipt, Ray Booth told me. If the customer wants more information he is expected to get it himself by asking the Branch for the number of litres that it took to fill or as he put it, You can divided the value by the fuel reflected on the invoice by the cost per litre to find the number of litres.  He didn’t mention what method his firm uses to arrive at the cost of filling up vehicles.
         Leslie Matthews at Tempest said his firm doesn’t automatically give clients a record of the refill. If they want it they can ask for it and there is always an audit trail.
         I was confused by some of the things Dawn Nathan-Jones of Europcar told me on the phone. She said they don’t estimate refuelling charges, but charge the actual amount, and if customers want a breakdown they have to ask for it.
         She added that they lose a lot on the refill side of the business, but I can’t understand why if hirers are billed for what is used.
         Calls to the reservations sections of the firms I have mentioned revealed that the following extras were charged at Cape Town airport: Tempest and Budget have no collection fee, but they have a R55 documentation fee; Avis charges a R14 collection fee and R37 for documents while at Hertz the corresponding fees are 1% of the basic hire charge and R50.
         Europcar’s Dawn told me the collection charge was 9% of the basic charge, which is pretty steep. But then at her reservation section I was told there was no charge for this, but there was a R55 documentation fee.    
         So I was no nearer finding out which firm David had used.
         Mathews’ view was that he should have named and shamed the company he was complaining about.
         I couldn’t agree more. And I think David's sortie into investigative journalism was as bad as the service he was moaning about. Rip off artists, who are allowed to remain anonymous in reports have no place in a newspaper.
         In an email he told me he had learnt that the tanks are not full when you get the car as they are driven from the filling station and sometimes they haven’t refilled them from the last customer. All this is on the customer’s account.
        Unfortunately our car hire sleuth didn’t give me any hard evidence to back his allegations, but he claimed to have had a lot of positive response.
         Well he won’t get that from me until he names the company he was bitching about and provides something substantial to back his generalisations.
         But car hire firms would do themselves a favour by automatically providing every customer with a detailed statement to show how much the refill was. This is especially so when they charge an unpalatable documentation fee. 
         And it would be better still if the hire rates included every extra (not the refill amount) so customers know immediately what the daily rate is.
         Jon, the Consumer Watchdog, who believes that without names no report has any validity.
Comments after this was posted. 
David: Cool article. Well done even if I am a yellow prick
Keith: Thanks!! I hope you are an Avis customer.


  1. The car hire sting is due to the fuel hike. Useful post

  2. This is a nice post in an interesting line of content.Thanks for sharing this article, great way of bring such topic to discussion.

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