Helping an AutoSlash user one day, we came across an abnormal scenario. A rate wasn’t coming back as expected – in fact, the rate charged by the location was about $27 more than expected. Looking at the breakdown carefully, we discovered that the renter was being charged airport taxes by a Budget neighborhood location despite a pickup (and contract signing) that was not at the Denver International Airport.
At least some renters who weren’t “airport customers” (more on that in a minute) were being charged airport fees. And while our article was not yet printed, the City and County of Denver released the results of an audit, finding that some “airport customers” were not being charged airport fees.
That’s right – some customers who were supposed to be charged taxes were not, while customers who were not supposed to be charged taxes were. The City and County of Denver was (ostensibly) receiving tax revenue from customers who had no tax liability while demanding the rental car companies make payments for the customers who should have been charged (but weren’t). If you think this seems like a potentially lucrative racket, you’re right – fees on rental car transactions account for 12% of the airport’s total revenue.
“It Depends on What the Meaning of the Word ‘Airport’ Is”
Why can there be confusion as to whether sites away from the airport, in cities like Aurora and Stapleton, should be charging airport taxes? Well, the folks at the Denver International Airport have defined the concept of “airport customer” very broadly. A passenger who flies into the airport and then takes any vehicle to a point within 20-miles of the airport before renting a car at any time in the next 24 hours is still considered an airport customer. And that leads directly to two additional rental car fees on rental car contracts (one mandated, one made up by the rental car companies).
The airport must get revenue from those cruise lines operating in Denver!
The Customer Facility Charge
This fee is explicitly required by the airport authority and thus is a more traditional tax. The customer is charged $2.15 per rental car transaction day for each “airport customer” rental. Rather than assessing a one-time fee (to reflect the one-time use of the facilities), the renter is charged for every day of the rental! On a long-term rental, the customer is being charged for all those days the airport’s facilities are not being used. A renter with a week-long rental will be paying this fee seven times, although there’s the same infrastructure burden as a single-day rental!
The Concession Recovery Fee is Not Mandatory
The Concession Recovery Fee we see in airport rentals isn’t mandated by airport authorities. However, it’s an easy way for the rental car companies to state “this is the airport’s cut of revenue”. The Concession Recovery Fee is just a bit of accounting sleight of hand that ensures the rental car company gets the revenue they want on a rental while putting the airport’s cut in a distinct bucket.
Denver International Airport is one of the few airports that readily provides online access to their regulations and we appreciate that level of transparency. There’s no reference at all to an 11.1% Concession Recovery Fee. All that exists is a requirement that the rental car company (whether on-airport or off-airport with a shuttle) provide 10% of their gross revenues to the City and County of Denver.
Assume a rental car company wants $100 for a rental. After adding an 11.1% fake fee, the airport gets 10% of the $111.10 ($11.10) and the rental car company keeps the original $100. We’re not kidding; that’s how “rental car math” truly works!
The provision of “On-Airport” Rental Car companies – 10% of gross revenues plus the cost of space.
What did the Auditor for the City and County of Denver Find?
The City and County of Denver were displeased in an audit specifically covering the rental agreements of Avis and Alamo, selected because these were the two largest companies not subjected to another recent audit. Avis was found to owe the airport at least $1.46 million in fees from two satellite locations within the 20-mile driving radius of the airport.
Why? The two Avis locations weren’t asking whether the renter was an “airport customer” on the rental contract; as a result, all rentals are considered “airport”. Yet the Avis audit finding was about whether renters should be considered “airport customers”. Our original case at AutoSlash was about a local renter being charged airport fees.
What did AutoSlash Find?
At multiple Avis/Budget and Hertz neighborhood locations near Denver, it’s possible to be charged airport fees without the rental ever entering airport property! A car can be picked up in the broader community and returned to the same location yet still be charged “taxes” as if the vehicle was an airport rental, despite noting that the renter did not fly to the airport.
Suppose you’re currently living in the Denver suburbs, between the city and airport. Trust us, there’s a lot of space between the airport and downtown … As a resident, student, or visitor to the community, you might still get stuck paying for the airport-related taxes and fees with Avis, Budget, and Hertz! Trying to book at the shared Avis-Budget location at 15055 East Mississippi Avenue in Aurora, Colorado for pick-up and return? The Customer Facility Charge and the Airport Recovery Fee are going to be there!
Ditto at the Budget location in the Stapleton community at 3901 Quebec Street, picking up and returning at the same site.
And the same with Hertz’s nearby Stapleton location.
Can a Renter Just Select the Option for “Not Flying”?
We’re so glad you asked! Yes, a customer can select the option of “Not Flying” when renting from Avis, Budget, and Hertz! That selection simply doesn’t help at all in the rate computations!
When a customer renting in these neighborhoods expressly states they are not flying, that customer should be exempt from the Customer Facility Charge and Concession Recovery Fee (which is made up by the rental car companies anyway). Well, what do we see after telling Budget and Hertz a customer’s not flying at all and the rental doesn’t involve the airport?
The customer who is expressly not flying still needlessly gets assessed both the Customer Facility Charge and the Concession Recovery Fee at the non-airport locations. The initial oddity found in a one-way rental applies even when the car doesn’t touch an airport. That’s when we decided the action by Avis, Budget, and Hertz at these locations might appear to be a straight money grab (at best) …
Even though I can specify “Not Flying” with Budget, I’m still stuck paying $23.45 in airport taxes and fees at a neighborhood location!
And at Hertz, we’re “Not Arriving via Airline or Train” but still have $19.10 for airport fees.
I said hey, what's going on? – 4 Non Blondes
The possibilities here are fascinating. If the renter is not flying into the Denver International Airport, there’s no regulatory requirement for these Avis, Budget, and Hertz locations to charge airport-related fees! Are these locations near Denver International Airport paying these fees to the City and County of Denver without a requirement to do so? We simply could not come up with any legitimate reason for the insistence on these charges for passengers not flying, so we reached out to the Ground Transportation division at Denver International Airport.
Denver International Airport’s Response?
Our January 2017 (before the audit’s release) inquiries to the Ground Transportation division were forwarded to an unnamed manager who was responsible for Car Rental Agreements, with no response within five days. We followed up and received the contact information for two individuals in the Car Rental Agreements office. We then received an out-of-office message for one of the individuals in Car Rental Agreements and no response from the other staff member. After two-plus months, we must assume the Denver International Airport is declining to answer our questions.
In past Fee Detective articles, we’ve pointed out the behaviors of rental car companies at specific sites (rather than broader corporate-driven policies) and this is another one of those cases. For consumers, what percentage of local customers would be familiar enough with airport rental car regulations to know that these fees shouldn’t be imposed? Without that bit of knowledge, many local customers may be greatly overpaying on all their rental cars.
Our recommendation for residents of the eastern suburbs of Denver? As Justice Louis Brandeis once stated, “sunlight is said to be the best of disinfectants”. Check your past rental agreements and, if affected, ask questions!
Fees, facility charges, and taxes got you confused and/or down? The Fee Detective can explain. Send your query to firstname.lastname@example.org and we may feature your question in an upcoming post.