Green Machine: Eco-friendly Auto Club Challenges Long-dominant AAA
March 9, 2003
By Rosemary Camozzi
For The Register-Guard
It's the middle of the night and there's no one in sight. When your car breaks down, who ya gonna call?
For nearly 46 million U.S. drivers, the answer is simple: AAA. The only organization with more members in the United States is the Catholic Church.
But AAA, formed in 1902 to give cars clout in a horse-driven world, has encountered increasing criticism for its public policy positions. Critics say the club lobbies for the rights of motorists (and car makers) with little regard for safety or the environment.
"For the most part, on the big ticket issues, AAA and the Center for Auto Safety are on opposite sides," says Clarence Ditlow, executive director of the Washington, D.C.-based auto safety group, a nonprofit consumer organization.
Now, a new auto association - Portland-based Better World Club - has taken on giant AAA. If the Better World has its way, it will wrest from AAA those travelers who care deeply about the environment.
Like AAA, Better World offers roadside help, a travel agency, and home and auto insurance. It contracts with the same network of roadside providers that AAA does and charges similar fees (basic membership starts at $49.95). But the club is different, president and co-founder Mitch Rofsky says, because it is socially responsible.
"We have a whole different policy agenda," Rofsky says. "We figured there's an awful lot of things that you could do that were cooler and greener, that AAA wasn't doing."
Better World - which debuted in July and lists about 5,000 members - donates 1 percent of its revenues to environmental organizations that seek to reduce fossil fuel usage and global warming. When a member buys a round-trip domestic airline ticket from Better World, the group allocates $11 to support programs to reduce greenhouse gas emissions (nonmembers pay an added fee). The club makes a similar donation for purchasers of car insurance.
Better World is the first U.S. club to offer roadside assistance for bicyclists as well as the first to cover domestic partners. The company's travel club offers eco-travel options, discounts on Budget's hybrid car rentals and a large collection of vacation homes for rent.
"Better World better reflects my personal values," says Justin Massey, an environmental law student at the University of Oregon. Massey switched from AAA because he was unhappy with that group's lobbying.
Whether Better World will find enough customers to remain afloat remains to be seen. The club says it needs 20,000 to 25,000 to break even.
Rofsky is upbeat. AAA, he says, "represents people (only) as motorists. ... We believe people are multifaceted. Our service enables people to travel as lightly and environmentally consciously as possible."
Slammed by "Car Talk"
Increasingly, it's in vogue to attack AAA. Magazine and newspaper articles have hammered the agency.
Critics say AAA lobbied against airbags in the late '70s, against strengthening the Clean Air Act in 1990, and recently against increasing auto fuel efficiency standards. AAA is also seen to be unsupportive of public transportation and dedicated to promoting new road construction.
Tom and Ray Magliozzi of the National Public Radio show "Car Talk" lambasted AAA after AAA released a study it had funded that found use of cell phones while driving was not a big cause of accidents.
AAA, which consists of 80 nonprofit independent agencies, has a lot of clout in Washington, D.C., because it claims to speak for its 46 million members. Most AAA members, Rofsky says, don't even realize that the organization tries to influence auto-related legislation.
Some Lane County residents who are AAA members said they had no idea that AAA takes a stand on public policy issues.
"I don't know anything about AAA except they've been around a long time," said Miriam Mazure-Mitchell, 50, a naturopathic physician in Eugene and an AAA member. "They've never asked my opinion."
"I've never heard a thing about AAA lobbying," agreed Willie McEachern of Dexter, 51, a AAA member and furniture maker.
Better World is determined to change all that. The club's Web site proclaims: "AAA is hostile to the environment," features a cover story from Harper's magazine titled "AAA Paves the Road to Hell" and offers an article by activist Ralph Nader that damns AAA and endorses Better World.
"AAA presented a ripe target," says Nathaniel Clevenger, a minority investor in the company who also handles its public relations. "They basically stood there naked waiting to be attacked."
AAA fights back
AAA spokesman Mantill Williams accuses Better World of unfair tactics.
"They make accusations with no facts behind them," he says. "We make our money the old-fashioned way. We provide good products and services and we don't try to make others look bad." He says AAA last year had the most successful year for membership in its history and cites a 90 percent renewal rate.
Better World appeals to people who have extreme views, he says, people who think all roads are bad. "That's hypocritical," he says. "It's not realistic. Most people use the automobile, and that's not going to change in the near future."
Williams says that AAA mostly lobbies on safety-related issues.
Did AAA oppose the Clean Air Act? "There is no evidence that we did that," he says. "That is completely false." AAA did, however, issue statements arguing that the Clean Air Act would drive up the cost of new automobiles for consumers.
Does AAA lobby against public transportation? "Totally false. We lobby in favor of public transportation in certain situations," Williams said. AAA did, however, lobby against raising the federal gas tax in 1991 because some of the tax money would have gone to public transit.
Did AAA oppose airbags? "We just wanted to make sure the cost of the airbags was shared by manufacturers," he says.
Elliot Eki, public affairs director of the 606,000-member AAA Oregon/Idaho, says he's received a lot of calls lately about AAA's environmental practices.
He says there's a reason AAA generally favors highway construction: AAA wants to keep cars moving. "During congestion you have the most toxic emissions," he says. "The engine burns more efficiently when running at a steady pace."
Williams says AAA has also helped with environmental programs, such as collecting used car batteries, offering free diagnostic checks to make sure engines are tuned properly; and replacing switches that contain mercury, a toxic metal.
Clevenger says AAA has a social conscience. But, he adds, "Ours is more apparent."
Better World Club was founded by Rofsky, 52, and Todd Silberman, 53. Rofsky had worked for Ralph Nader for five years after graduating from law school. Then he helped start the National Cooperative Bank, which funded unconventional businesses such as nonprofits, worker-owned companies and co-ops. He helped create Working Assets Capital Management and managed the Citizens Fund, a $1 billion socially responsible mutual fund, from 1991 to 1993.
When he left, he says, he applied his pro-consumer principles to the insurance industry. He started and headed up the American Consumer Insurance Agency, a property and casualty insurance broker. That was when he began hearing complaints about AAA.
"The community came to me and said they were running into AAA on environmental issues," he says.
His childhood friend Silberman, also an attorney, had founded Lifeco, one of the country's largest travel agencies. Lifeco had sales of $1.4 billion prior to its sale to American Express in 1990. To Rofsky, their knowledge and experience seemed a perfect combination.
"I said to him, "Here's an opportunity. What do you think?" Rofsky recalls. Silberman, by then a partner in Elephant's Trunk Travel Co. in Portland, liked the idea. The two merged their companies in 1999 and Rofsky moved from San Francisco to Portland.
The new company acquired a number of travel agencies in Portland, including Journeys, Vogue, Triangle and Sunset, and bought what Rofsky says is one of the largest databases of vacation houses on the Internet. They moved into Journeys' offices in northeast Portland and opened a travel agency under the Journeys name. They have 20 employees.
To start Better World Club last July, Rofsky and Silberman used their own money as well as capital provided by angel investors. Rofsky declined to say how much capital has been invested in Better World. But, he said, it was "a lot less than most Internet companies." Journeys Travel had sales of about $10 million last year and accounts for the bulk of revenue for the two companies.
Better World's marketing efforts have focused on Internet advertising, including small ads that pop up when people look up "roadside assistance" on Google. The ads "have been unbelievably successful," Rofsky says. "You only pay when someone visits the site."
Better World has now made its point about AAA, Clevenger says, and will shift its marketing away from bashing the big guy. "I think the issue has run its course," he says. "Now it's time to focus on our positives."
Rofsky says about 750 of Better World's 5,000 members are in Oregon. Some Lane County consumers say they like the concept of Better World.
"If there is something that is PC, I would definitely look into it," Mazure-Mitchell said.
"How do I get a hold of this other guy?" McEachern said.
Rosemary Camozzi is a free-lance business writer based in Eugene.
Contact: Phone: 866-304-7540; Web site: www.betterworldclub.com
Officers: CEO of Better World Travel Inc.: Todd Silberman; CEO of Better World Travel Club: Mitch Rofsky
Basic membership:One driver: $49.95/year. $15 more covers spouse/partner and dependent children. Includes: free towing to nearest service station up to five miles; legal services; emergency travel expense reimbursement; car theft reward.
Aid for bicyclists: Two service calls a year; roadside help up to 30 miles total over 12 months. All the discounts provided to auto members. Can add on to car insurance for $15.
Travel services: Free road maps; access to trip routing; savings on eco-travel services; adventure travel outings; eco-tours; discounts on electric and hybrid car rentals; discounts on bike and electric car purchases; discounts on vacation home rentals, leisure travel, and hotel booking, including eco-hotels; access to online booking engine and airfares.