New Yorkers Hit Where They Live, and It’s Hertz : Business: The leading car rental company is charging a surcharge, partly because of New Yorkers’ lousy driving records. Residents and officials are furious.
Sometimes service here is a little brusque, prices seem a tad high and lines get uncomfortably long. No big deal. Consumers here can take it; they don’t require coddling.
The latest how-do-you-do from the Hertz Corp. really stings, however. Arguing that a combination of state law and lousy driving makes renting to New Yorkers a losing proposition, America’s No. 1 car-rental agency began charging city residents extra last week. Just for being them.
Surcharges ranging from an annoying $3 per day for Manhattan residents to an astonishing $56 a day for Bronx residents were imposed Friday. Rarely ruffled New Yorkers went ballistic.
Queens Borough President Claire Shulman proposed banishing Hertz from the city’s major airports in retaliation. Her counterpart in the Bronx, Fernando Ferrer, called the surcharge “the worst example of economic and ceographic discrimination I have seen.”
What has Hertz got against New Yorkers? First, they live in one of 10 states where rental agencies can be sued for damage done by the renters. New York’s “vicarious liability” law may be the worst of the 10, Hertz maintains.
In one case, a Brooklyn man rented a car from Hertz, then lent it to an underage, unlicensed driver. The youth hit a pedestrian, and Hertz had to pay $2.5 million.
Second, except for folks on Staten Island, New Yorkers are rotten drivers, according to Hertz statistics. Local drivers generate only about a quarter of the company’s New York-area business--but that is the quarter that seems to spend a disproportionate amount of time running into things.
“Our liability losses in the city are bigger than our rents, our salaries, our overhead, our inventory, our maintenance, everything,” company spokesman Joseph Russo explained. “In the Bronx, for example, for every dollar of revenue we receive, we are paying out $1.28” in liability costs.
That may seem like simple business to Hertz, but it smacks of discrimination to New Yorkers. Atty. Gen. Robert Abrams and his staff are pondering whether the company is violating “civil and human rights” by demanding the surcharge. City Consumer Affairs Commissioner Mark Green called the practice “perverse.”
It so happens, Green noted, that “the two boroughs that have suffered the highest surcharges, the Bronx and Brooklyn, also happen to have the highest concentrations of minorities in the state. This is de facto discrimination.”
“Look,” Hertz spokesman Russo countered, “the numbers don’t lie. . . . We have to come up with the money to pay for these accidents.” He noted that the company already has successfully defended its practice of refusing to rent to New Yorkers under 25.
So far, the other major rental companies have said they have no plans to follow Hertz’s lead. That seemed to reflect a running disagreement between Hertz and its competitors over the best way to force changes in the vicarious-liability laws in New York and elsewhere. Avis led a coalition of major renters in lobbying the state Legislature last year; Hertz refused to join. “We knew they would fail,” Russo said.
Perhaps the surcharge is Hertz’s way of sending its message to the lawmakers, several officials speculated. If that was the purpose, Hertz definitely succeeded. “I have never been so besieged,” consumer advocate Green said.
Chalk that up, in part, to the special place rental cars have in the city’s affections. More than any other Americans, New Yorkers live without owning cars; for many, to drive is to rent.
“I expect many New York customers will show their displeasure with us by going to our competitors,” Russo said, in tones that indicated that the thought did not displease him.
