Car-rental fees increased at Philadelphia airport

For 20 years, Richard Schwarz rented cars at affordable rates on weekends at Philadelphia International Airport.

By combining airline promotions, frequent-flier miles, and deals offered by the rental companies, the Center City resident said he could snag a weekend bargain starting at $15 or $16 a day.

No longer.

It just got $8 a day more expensive to rent a car at Philadelphia airport.

The Pennsylvania legislature approved, and Gov. Corbett signed into law in November, a transportation funding bill that included an $8-a-day "customer facility charge" to pay for the design, construction, and eventual operation of a consolidated car-rental facility.

The center, in the planning stage, will consolidate operations of seven or more rental companies under one roof - in the same location where the companies are now, across from the parking garages on the airport arrivals road.

The $8 daily fee on airport car rentals took effect May 1. For Schwarz, it was a deal-breaker - an extra $24 cost for a three-day weekend, and $56 more for a week.

"It's outrageous," he said. "I will no longer be able to rent cars at Philadelphia airport."

Rental-car centers are becoming common at larger airports. Boston Logan International has one of the newest, a $310 million service center and four-level garage.

To foot the cost, more than 125 U.S. airports have a customer-facility charge, sometimes called a transportation fee, said James Branda, an airport management consultant in Chicago.

The fees range from $2 a day at Liberty airport in Newark, N.J., to $8 a day at Chicago O'Hare and $10 per day at six California airports, including Los Angeles. San Francisco has a flat $20 per rental transaction fee. The facility charge at Boston Logan is $6 a day.

At Philadelphia airport, the new fee is projected to generate about $28 million annually. Plans include a unified shuttle bus system, and eventually an automated "people-mover" to go among terminals, the rental center, and airport parking lots.

"The rental car companies, on their current site, are a bit constrained in terms of space," said Chellie Cameron, Philadelphia deputy aviation director of finance and administration. "This new facility will give them a much more operationally efficient place. It will be good for the customers, and good for the rental car companies."

For consumers, the facility charge is another add-on that with other taxes and surcharges nearly doubles the base cost.

The weekend rate to rent a Dodge Charger from Enterprise Leasing Co. at the airport from June 13 to 15 was $65.94. After taxes and fees, the total was $103.85.

In addition to the new facility charge, renters pay an airport "concession recovery," or "airport access fee," which amounts to 10 percent of the base rental. Rental companies pay 10 percent of their gross revenue to the airport to operate there.

Other taxes and surcharges can include: a 2 percent passenger car rental tax, 6 percent Pennsylvania state sales tax, 2 percent Philadelphia city sales tax, a flat $2-per-day public transportation assistance tax, and a 2 percent vehicle rental tax, according to one rental contract.

"A lot of renters don't understand what these fees are," said Neil Abrams, president of Abrams Consulting Group, a car-rental consulting and travel market research company in New York.

"Rental car companies are really collection agents. They don't hold on to this money. It certainly drives up the cost of the rental substantially - as much as 30 or 40 percent."

A  $2-per-day fee is administered by the Pennsylvania Department of Revenue to support mass transit in the state, said department press secretary Elizabeth Brassell.

The 2 percent passenger car-rental tax is collected only in Philadelphia, and used to help pay for sports stadiums, said city finance director Rob Dubow.

Another $2-per-day tariff applies to car rentals in Allegheny County, and was approved by local legislators about five years ago to fund a public train transportation system, said Laura Bryant, spokeswoman for Enterprise Holdings, which owns Alamo, Enterprise, and National car brands.

Enterprise recently supported legislation in Philadelphia to add the $8-a-day customer facility charge at the airport for a proposed consumer-friendly rental center. "The original proposals actually called for $12 a day, but we worked with local authorities to help keep costs down," Bryant said.

As irked as some travelers are, many renters don't pay attention to the fees.

"I travel a lot. I never noticed it," said Michael Bosha, a senior product manager who recently flew to Philadelphia and rented a car to drive to Allentown. "I'm not going to lie. I get a rental-car bill. I put it on an expense report. I don't have to itemize the report. I just throw it in."

Lee Beyton flew to Philadelphia from Orlando, Fla., and rented a car to drive to Wilmington. "It's probably not something I would notice. It's a necessity," he said of renting a car. "My company would pay."

The rental-car industry has staunchly opposed levies to pay for sports stadiums and municipal projects that have nothing to do with travel or renting a car.

"The consumer can only take so much on every rental agreement. It becomes difficult for us," said Sharon Faulkner, executive director of the American Car Rental Association. "I would suggest the local consumer find an off-airport location to avoid some of these charges and fees, and make a comparison with the cost at the airport."

Nationwide, 53 percent of car rentals are at airports, with the remaining 47 percent by local residents.

Has the proliferation of taxes and fees hurt airport rentals? Not yet.

"We have seen no evidence," said Branda, whose firm, Ricondo & Associates, does bond feasibility studies for airports.

"Every airport is very concerned that the combination" of fees and taxes "at some point is going to drive the customer away," Branda said. "Common sense tells you at some point that's going to be reached, but it hasn't been reached yet - that anybody has been able to prove."

Per-day customer facility charges and transportation fees at U.S. airports. These are among the types of fees charged.

                         Facility    Transportation

City                         Charge                Fee

Atlantic City               $3                      -

Atlanta                      $5                    -

Baltimore/Washington      $3.75                   -

Boston                      $6                      -

Chicago O'Hare             $8                      -

Dallas-Fort Worth            $4                   $2.20

Erie                        $3.50                   -

Harrisburg                  $3.75                   -

Houston                      $4.25                $4.72

Kansas City                  $5                      -

Long Beach, Los Angeles,

Monterey, Calif.              -                $10

Newark, N.J.                $2                      -

New Orleans                $6.20

Oakland, Ontario,

Palm Springs, San Luis

Obispo, Santa Barbara       -                   $10

Philadelphia                  $8                      -

Phoenix                      $6                   $1.81

Pittsburgh                   $3                      -

San Francisco                 -                $20*

Seattle                      $6                      -

Washington Reagan          $2.50                   -

*Flat rate regardless of length of rental.

SOURCE: Ricondo & Associates Inc.EndText