A Force to Fix Rental Car Policy
Federal Trade Commission > Rental Car Recall Repair Practices
Congress > Congressional Action
By Janie Lorber
Roll Call Staff
Feb. 27, 2012, Midnight
For months, Enterprise Rent-A-Car has been fighting legislation that would make it illegal to rent vehicles that have been recalled by their manufacturers.
But it only took 48 hours for a Change.org petition to force Enterprise, the industry's most powerful lobbying force and biggest political donor, to the bargaining table.
Change.org, a social networking website founded in 2007, first earned attention for campaigns targeting the policies of major corporations such as Bank of America and Apple Inc., but the platform has also quickly become the destination for private citizens who want to sway legislation on Capitol Hill.
One such citizen is Cally Houck, who has been fighting for federal regulation of recalled rental vehicles since 2004, when her two daughters were killed after their recalled Enterprise rental car caught fire from leaking power steering fluid.
With the help of the driver advocacy group Consumers for Auto Reliability and Safety, Houck persuaded Hertz Rent-a-Car to support the bill earlier this month. The coalition then turned to Change.org in a furious race to persuade the rest of the industry to join the cause in time for the Senate to consider the measure this week.
In two days, the petition gathered nearly 136,000 signatures.
"It gives the little guy who has no resources at all a voice," Houck said. "During my travels as a proponent of this legislation both in D.C. and in California, it struck me that you just don't see the halls full of citizens like me."
The bill, introduced as a stand-alone measure in July by Sen. Charles Schumer (D-N.Y.) and Senate Environment and Public Works Chairman Barbara Boxer (D-Calif.), is likely to be offered as an amendment to Boxer's transportation funding bill this week.
Even with the support of two powerful lawmakers, industry backing is generally considered essential to winning approval for many amendments to the transportation bill.
Late last week, as signatures and scathing comments on the Change.org petition mounted, Enterprise began to waver, agreeing for the first time to meet with the consumer advocates. The company issued a vague statement "announcing its formal support for federal legislation to oversee the way car rental companies manage the safety recall process."
But when pressed by Roll Call, Laura Bryant, a spokeswoman for Enterprise Holdings, acknowledged that the company was not committing to much of anything.
"We have not endorsed any specific legislation or amendment to date," she said.
Every time someone signs the Change.org petition, an email is automatically sent to five senior employees at Enterprise, including Bryant and Andrew Taylor, the company's CEO.
But the petition has generated so much attention that the company's stance may be irrelevant to the provision's prospects in Congress, said Pamela Gilbert, a CARS lobbyist with Cuneo, Gilbert & LaDuca.
"It is more important to get hundreds of thousands of signatures in support of this legislation than to have the rental companies on our side," Gilbert said.
Even Hertz Senior Vice President Richard Broome said the petition seems to have outperformed millions of dollars spent on top Washington lobbyists.
"These are people who may not have influence and can't hire a lobbyist, but the petition shows they do have power," he said.
Enterprise, one of the largest privately held businesses in the nation, spent nearly $1 million on lobbying in 2011, almost four times the amount spent by its major competitors — Avis and Hertz — combined.
The company also spends much more trying to influence federal elections. So far this cycle, Enterprise's political action committee has raised $1.7 million and spent more than $134,000 on federal candidates, almost all of whom are Republicans. The company has consistently supported Republicans over Democrats in every election since 1996, according to the Center for Responsive Politics.
The Avis Budget Group PAC, by contrast, has spent none of the roughly $13,000 that it has raised so far this cycle. Hertz does not have a federal PAC.
Avis did not respond to Roll Call's request for comment but is expected to attend this week's meeting between CARS and the Enterprise and Hertz lobbyists, Gilbert said.
Advocates argue that Enterprise, which holds more than half the rental car market share, is not at risk of losing its dominance. The company is known for discount prices and maintains contracts with insurance companies and car dealerships to supply rental cars to customers whose cars are damaged. The advocates argue that the costs associated with federal regulation are miniscule compared to the $14 billion the company brought in in 2011.
The rental car industry, however, has a philosophical gripe: It feels it is being unfairly targeted because limousines and taxi services would not be subject to similar regulation.
Enterprise operates an executive committee to decide when a recalled car should be grounded and does not want the government to interfere, the spokeswoman said.
"All recalls aren't made the same," one industry lobbyist familiar with the issue told Roll Call last week.
But leaving that discretion up to the rental car companies makes consumers nervous. Even in Enterprise's backyard, 86 percent of Missouri residents said the companies should not be allowed to rent cars that have been recalled for a safety issue, according to a survey conducted by Public Policy Polling.
While Missouri Senators have not publicly supported the bill, Gilbert said Sen. Claire McCaskill (D) has told her that she is open to compromise.
The recall amendment has the best chance of approval if it is included in the manager's package. Otherwise, Democratic and Republican leaders will have to agree to bring it up for floor debate and a vote. The trick will be convincing Members of both parties that the provision should be part of the bill.
Negotiations were in process on Friday and are expected to continue this week, ratcheting up the stakes of the meeting scheduled later this week between CARS and the rental car companies.
Consumer advocates said Enterprise's concession to meet was a huge victory, though they acknowledge nothing has been promised.
"I just think they are trying to spin their way out of this," CARS President Rosemary Shahan said. "It's easy for them to posture."
Houck remained tireless.
"They've already stolen the lives of my daughters, so what more can they take from me?" Houck said. "I'm not going to shut up."
Correction: Feb. 27, 2012
An earlier version of the article misstated the year that Change.org was founded.