When Holly Parker rented a car from Budget on a recent trip to Sacramento, everything was seamless. She kept the car for seven days, returned it in San Francisco, and had nothing to complain about.
A couple weeks after Parker returned home, Budget charged her credit card $21.15 for e-tolls. There’s only one problem: Parker says she didn’t drive on any toll roads. When Parker learned the charge was legitimate — and I’ll get to that in a moment — she cried foul over the “convenience” fees imposed by Budget. Parker’s case illustrates how preposterous rental car toll fees have become and how Budget, armed with an adhesion contract and your credit card, can impose exorbitant fees, even where customers have no option to pay tolls in cash.
When Parker spotted the charge on her credit card statement, she assumed it was an error. After all, she didn’t recall driving through a single toll booth. When she contacted Budget to dispute it, the agent directed her to its e-toll billing website where she could look up information about the tolls.
“The site says I was charged on I-580 eastbound at Greenville Road,” Parker recalls. “But I didn’t see any signs about tolls, and there was definitely no toll booth.”
Since the dawn of electronic toll plazas — a boon to commuters in metropolitan areas who used to suffer long waits to pay cash tolls — rental car companies have offered the convenient technology to renters for a fee. The transponders vary by region, but typically take the form of a small box installed on the windshield that renters must open to activate.
Budget discloses e-toll fees on its website:
How is the daily convenience fee calculated and charged?
If you use Budget e-Toll, the credit card on file for your rental will automatically be charged a $3.95 US per rental day usage fee (maximum $19.75 US per month). This fee applies to the entire length of your rental, regardless of when or how often you use the toll roads. For example, if you rent for three days and opt-in to use Budget e-Toll, you will be charged $3.95 US x three days + the toll road charge. These fees apply only if you access an e-Toll lane or activate the Budget e-Toll transponder on your windshield during your rental.
Well, that’s clear. But is that fair? Opting into Budget’s e-toll system triggers the fee on the day of the toll and every day thereafter, regardless of whether a toll is paid or not.
But how easy is opting out? With electronic and cashless toll roads on the rise, opting out is becoming increasingly difficult to do. In Parker’s case, the freeways in northern California were cashless toll roads.
And are rental car companies banking on its customers — typically travelers foreign to the area — not understanding where and how tolls are charged?
Sure, had Parker known that I-580 in Alameda County was a toll road, she might have been able to avoid it. She could have mapped a different route — perhaps slower, local roads — and avoided tolls altogether.
But consider this: I-580 is not a traditional toll road. Starting this year, use of certain express lanes known as High Occupancy Toll lanes — carpool lanes — triggers a toll at certain times of day. The carpool lane toll is collected through the transponder, and the toll’s calculation is based on such variables as road congestion, how many occupants are in a vehicle, and the total distance driven.
Seeing how complicated it is, there is no way someone unfamiliar with the roads would expect a toll for entering an express lane.
Parker incurred a $1.40 toll on I-580, with no option to pay in cash. Budget then tacked on a $3.95 fee. And even though she never drove on another toll road during her trip, Budget also charged her $3.95 the next day. And the day after that. And the day after that. And the day after that.
How can it do that? Budget’s contract allows it to continue to charge the fee, until the customer meets the maximum fee of $19.75 per rental month, which Parker did, mercifully, at the end of five days.
But for Parker, opting out of using the transponder was an impossibility.
Consider this rough analogy: Imagine you sit down to order lunch at a restaurant. The restaurant has French Onion soup on the menu with a little asterisk next to it. When you locate the asterisk at the bottom of the menu, it directs you to the restaurant website for more information. On the website, the fine print says that when you order soup, in addition to the cost of the soup, there’s a $3.95 charge if you use a bowl. And, if you eat at the restaurant again in the same week, you’re going to be charged $3.95 again, regardless of whether you order soup or not, just for setting foot in the restaurant.
This is clearly preposterous.
And so is Budget’s fee. The $1.40 toll that Parker wasn’t even aware she had paid quickly ballooned into a $21.15 grand total — an almost 2000 percent increase. Played out hundreds of times a day to renters nationwide, this money-making scheme has undoubtedly become quite profitable for Budget.
I contacted Budget on Parker’s behalf. The company reiterated that the rental agreement is a “legally binding contract” and that once the transponder is triggered, it “will be activated for the entire rental period.” At my request, Budget agreed to refund the $19.75 in fees charged to Parker for use of the transponder as a “one-time courtesy.”
That’s an easy call. After all, Budget did nothing to earn those fees. Transponders cost $20 to obtain, but that money is held as a deposit for its return. The program is actually free, with no additional cost whatsoever to drivers in California. The fees charged to rental customers are not offsetting any actual costs to Budget and are simply padding Budget’s bottom line.
Despite issuing a refund, Budget warned that no further refunds would be granted to Parker and in the future, she will be responsible for toll fees.
The same technology that allows rental customers to breeze through toll plazas and use carpool lanes in the name of convenience has created a fast track to the same customer’s wallet.
Charging inflated fees for a service that is free to everyone else takes a special kind of audacity usually only reserved for airlines and banks — two industries governed by federal regulations.
With rental car companies subject only to state laws, it is unclear whether market forces or litigation will bring about change. A mobile app creator called BancPass is currently battling for its right to provide car renters the mobile technology they would need to forego using the transponder provided by rental companies, paying tolls through their phones.
Unless BancPass is successful, with the entire rental car industry in on the fee frenzy and rental contracts steeped in mandatory arbitration clauses, change seems unlikely.
I won’t bet my bottom dollar on it, anyway. I need that for the toll booth.