AutoSlash

You can label it a windfall, but I think the company would characterize it as trying to maximize shareholder value, which, after all is their fiduciary responsibility and the reason they exist in the first place. Regardless of how you view it, the car rental industry is facing a lot of headwinds from many different directions including ridesharing companies like Uber/Lyft, car sharing companies like ZipCar/car2go/etc., the eventual penetration of self-driving vehicles, etc.

The car rental industry looks at the airline and hotel industry with a bit of jealousy, both of which have been more successful than the car rental industry in imposing pay-up-front models and cancelation penalties to varying degrees. They would certainly like to emulate those models, but nobody wants to be caught with their pants down, imposing across-the-board cancel fees and not having the other industry players follow suit, hence the cautious approach.

Consumers will, of course, play a large part in determining whether this sort of thing takes hold. If one company makes a serious commitment to pay-up-front and the results look promising, the other companies may follow suit, and the days of no skin in the game could be numbered. The flip side is that if not all companies follow the lead, then business could be sucked away from the ones that do, to the benefit of the one(s) that don't.

Additionally there is the wrinkle that Hertz and AvisBudget are public companies, while Enterprise is private. Enterprise is not beholden to public shareholders and thus could potentially hold out against the others hoping to reap the benefits if pay-up-front ends up backfiring on them.

Time will tell...

docbert

The question is, however, does it do that?

I had my first stay at an IHG hotel in years this week - simply because the alternatives were Hilton and Marriott hotels that had 48+ hour cancellation policies as they are now doing in most cases. The IHG was 6pm on day of stay, and got my business as a result.

The same is even more true with car rental - for most people there's such little differentiation between the companies that price rules - and people will consider a cancel fee as a part of that price decision. If two companies are $50/day, and one has a $20 cancel fee, then you can guess which most people are going to go with.

AutoSlash

And therein lies the fundamental dilemma facing the car rental companies. That's why they will offer a mix of pre-pay, post-pay, opaque, etc. If everyone doesn't follow the leader, then someone is going to get caught out.

ijgordon

This is what's great about a free market and competition. If you don't like the terms from one supplier, move on to the next.
Unfortunately, the spineless DOJ of the previous administration let the competitive environment for airlines become a little less favorable for consumers.

cestmoi123

Alternative way to look at it - if it's a month out from the reservation, one is $49 with a $20 cancel fee, and the other is $50, with no cancel fee, a lot of people will go with the $49 option, even though they'll be missing out on the rate dropping to $45 at some point down the line.

AutoSlash

That's because:

- For some people, the $49 rate is "good enough"

- Some people don't realize prices tend to rise and fall over time

- Some people can't be bothered to keep shopping for lower rates

- Some people mistakenly think that by paying up-front, it guarantees you a vehicle (it does not)

- Some people have not heard of AutoSlash

We've spoken with folks who have all the of above perspectives over the years (there are probably more). Prepaying can sometimes be worthwhile, but all things being equal, avoid prepaying if possible as better deals often come along.