Consolidated One Way Drop Fee Thread

 
Old Jul 8, 10, 3:43 pm
  #1  
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Consolidated One Way Drop Fee Thread

I would like to consolidate all the one-way drop fee threads under this one.

I have never had an instance where I was traveling one-way and Dollar did not charge a drop fee. My understanding is because they have to move inventory from one location to another in their system and there are licensing fees and taxes associated with registering a vehicle in a new state if the registration expires before the vehicle makes it back to the point of origin.

No it is not fair to charge the customer for a drop fee unless they have to transport the vehicle back to the point of origin. Life isn't fair. I do one-way drops most of the time for business and it is just part of the expense report.

I try not to do them on my own dime because i don't like giving someone $100 for nothing.
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Old Jul 8, 10, 4:19 pm
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Dollar does not charge drop fees within certain metropolitan areas, such as EWR to JFK or LGA. However, like with all the other companies, cars are neither sent back nor re-registered. The drop fees, whether separately unbundled and immune from discounting, or bundled with a higher daily rate, reflect minimum miles and difference in demand. One-ways involving mom-and-pop independent licensee franchise stores everyone likes to romanticize about until they see the lack of flexibility and high price, where they still exist in rural towns and small cities, are frequently simply denied. This surprised some people taking a popular DFW to OKC route last year, when they found that Dollar refranchised OKC and so is no longer offering one-way capability to and from there.

"One-ways involving corporate stores are no problem," the Dollar PR person said to the newspaper. "The sending location simply takes the car off its books and transfers it to the new return location. By contrast, one-ways involving independent licensees are a pain to deal with, as specific cars must get sent back."

The difference is Dollar's business model. The drop fee is flat regardless of time rented. So long time, short distance one-ways are their specialty, such as EWR to PHL for a week. Unlike say Hertz or Avis with corporate stores blasted throughout the country in strip malls and parking garages in almost every neighborhood stuffed full of cars with license plates from all over the place that constantly change hands every hour. By forfeiting the daily one-way business, Dollar has less volume of transactions, which means they can hire less staff, but the ones they do get bring in similar revenue as the others. Jackal once gave this synopsis before, last year I believe.
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Old Jul 9, 10, 9:14 pm
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Originally Posted by Auto Enthusiast View Post
"One-ways involving corporate stores are no problem," the Dollar PR person said to the newspaper. "The sending location simply takes the car off its books and transfers it to the new return location."
Even though it is technically simple, it's still a logistical issue.

Without a drop fee, you would see things like dozens of thousands of cars rented in New York and returned in Florida in the fall/winter as the snowbirds make their ways south. Locations in New York would be sold out of cars while locations in Florida would have such a huge glut of cars they wouldn't be able to store them all. The reverse would happen in the spring/summer.

The drop fee is as much meant to discourage this as it is to "pay" for the logistical hassle of dealing with one-way drops, although the fee does sometimes actually pay for Dollar to pay employees to drive or to pay a trucking company to ship cars from locations with excess cars to locations in need of cars.

Originally Posted by Auto Enthusiast View Post
Jackal once gave this synopsis before, last year I believe.
I think I've done it a few times...
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Old Jul 18, 10, 5:40 am
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Did anybody notice Dollar's lack of a FL driveout this year? Instead a while back they had something similar out of Denver, to a few of the same places (and some different ones) that typically receive the FL cars in late spring.
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Old Jul 30, 10, 3:18 pm
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Paradox: Once in a while, Dollar's drop fee is much higher in a particular direction between the same 2 locations. However, the base rate at the origin is so much lower than picking up at the destination, that it's actually cheaper to go in what seems like the non-favored direction at the moment.
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Old Sep 12, 10, 5:43 pm
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I read somewhere that Dollar opened some new franchises in the US, one of which was the re-opening of their old Des Moines location. I noticed that DSM does allow one-ways to and from a limited number of corporate stores, and only within the region.

Some Dollar franchises own multiple locations, only allowing one-ways within their own network. I wonder why DSM allows one-ways at all, if they're seemingly a franchise that only owns a single place.
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Old Sep 14, 10, 3:38 pm
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Originally Posted by Auto Enthusiast View Post
I read somewhere that Dollar opened some new franchises in the US, one of which was the re-opening of their old Des Moines location. I noticed that DSM does allow one-ways to and from a limited number of corporate stores, and only within the region.

Some Dollar franchises own multiple locations, only allowing one-ways within their own network. I wonder why DSM allows one-ways at all, if they're seemingly a franchise that only owns a single place.
It is possible they've determined there's a market demand for one-ways to nearby locations and have found it advantageous to allow them, in which case they've negotiated standard arrangements with Corporate to deal with them. Usually, inter-owner one-ways involve some form of revenue splitting on the return leg--the standard is a 60/40 split (60% to the renting city and 40% to the owning city).
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Old Sep 18, 10, 8:11 am
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Is it a similar revenue split for one-ways between corporate stores, 60% renting location, 40% receiving location? Or is it closer to 50-50?
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Old Sep 18, 10, 10:17 am
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Originally Posted by Auto Enthusiast View Post
Is it a similar revenue split for one-ways between corporate stores, 60% renting location, 40% receiving location? Or is it closer to 50-50?
I don't know. With franchises, the official guidelines (which are not mandatory) are a 60-40 split between the renting location and the owning location. It has nothing to do with the receiving location.

Given that corporate stores use a floating fleet that is owned systemwide, I don't know how they calculate this. I would assume--but take me with a grain of salt, since I am not speaking from any actual knowledge--that there is no revenue split: the renting location gets 100% of the credit and the receiving location simply gains a car for their future use.
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Old Sep 28, 10, 7:54 am
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How would the revenue be split in a 3-way transaction involving a franchise? Ex, what if corporate MKE one-ways a car to the DSM franchise, who then one-ways the corporate car to MCI?
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Old Sep 28, 10, 5:33 pm
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Originally Posted by Auto Enthusiast View Post
How would the revenue be split in a 3-way transaction involving a franchise? Ex, what if corporate MKE one-ways a car to the DSM franchise, who then one-ways the corporate car to MCI?
Absolutely nooooo idea...

However, I would suspect it is not treated any differently than any other one-way. As I said above, receiving location has nothing to do with the finances. From DSM's point of view, they are renting an MKE-owned car. Therefore, they get 60%, while MKE gets 40%. What happens to the car when it gets to MCI is out of DSM's hands--most likely, ownership of the car will transfer from MKE to MCI, but that doesn't matter to DSM.

There may be some restrictions on franchises renting corporate one-way cars, though. Corporate may specify that they can only be rented back to the original owning location. I don't know--this isn't really a very common occurrence up here...
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