Electric Vehicle Rental Issues

The Rise and Fall of Hertz's EV initiative

Last fall, a few months before we bought our electric car, I was in a Hertz rental car agency.  Our SUV had a broken window (long story) and we needed a car we could drive for a week without worry. 

As I waited my turn there was a bit of a scuffle between another customer and the staff.  I didn’t catch the entire conversation, but three things became clear: the customer was returning an electric car; he was being asked to pay a lot more than he thought he should be paying; and at least part of the reason he had to pay more was that he had not adequately charged the car before he returned it.

When I booked my car I seriously considered renting an EV.  We were thinking about buying an electric car at the time and I thought it would be a good way to test the idea. I was also motivated by the price.  I could get a pretty comfortable and reasonably luxurious Tesla 3 for less than a compact car. 

But, as you know, I tend to think through technology before I make decisions. I reflected on the fact that over the next several days I would be running a bunch of errands around town, commuting to work a few times, and taking a road trip to San Diego.  It occurred to me that I had a lot to learn about living with an electric vehicle and that a frantic week where I just needed reliable transportation was probably not the best time to experiment. Where would I recharge? Do I need to download an app? How many apps do I need? How far would the car go on a charge?  What if I couldn’t find a charger on an empty stretch of road between Gila Bend and Yuma, Arizona? Ultimately I opted to pay a bit more and rented a somewhat tinny gasoline powered compact car.

I felt sorry for that customer wrestling with Hertz customer service.  Navigating the complex and ever-changing matrix of rental car fees has always stressed me out. I imagine that the guy just wanted to run a few errands, but ended up spending most of his time trying to figure out how to keep his EV rental running and then, just as he’s excited to drop it off and move on with his life, he gets hit with a bunch of unexpected fees.

Evidently this customer was not the only one frustrated with Hertz.  Things have been going so badly for the company that this past week the CEO resigned.  The company seems to have made several public relations errors recently including falsely claiming that hundreds of its legitimate customers had stolen their cars, leading to their arrest and imprisonment [?!?!?!].  But many critics are laying the blame on the company’s significant investment in electric cars.  Over the past three years the company ordered 100s of thousands of electric cars. Since then it has cancelled many of its orders and is trying to sell off the ones that it has.

Hertz’s EV initiative definitely made some sense. Over the past few years more and more Americans have become interested in electric vehicles.  Perhaps not everyone wants to jump right into purchasing a new car, but many might like to try one out.  Plus, a commitment to EVs could have been a powerful way for Hertz to brand itself as the rental car company of the future. In fact I got an e-mail from Hertz today that encouraged me to rent an EV so that I can “Test-drive the future.”

Now before I relate the story of what happened next, let me make clear that I have nothing personal against Hertz. My guess is that the next time I reserve a rental car I’m as likely to book through them as anyone else. But Hertz made a series of bad decisions with its EV strategy that I hope can serve as a warning to others. The company believed it could simply swap gasoline powered cars with EVs and continue business as usual. They didn’t reflect on the major transition they were trying to enable and thus didn’t change their infrastructure or educate their customers in a meaningful way.

Let me give you one example. Let’s say that you’ve just picked up your EV rental at Hertz and are ready to drive one for the first time.  One of the questions you might have is “Where Can I Charge My Electric Car?”  Hertz offers a webpage with that exact title to help you out.

The company’s first bit of advice is four URL addresses that are supposed to help you locate public charging stations. The first took me to a site that didn’t tell me much other than that I should download their app. The second took me to a map of the US that said “No charging stations found.”  The third was a broken URL. And the fourth took me to a map that only displayed charging stations in three US states.

It goes downhill from there.

The second suggestion Hertz offers is that you could install a level 2 charger in your house for as little as $520.  While I’m pretty sure that estimate is way too low, it still seems like quite an investment for a car you might rent for a week or two.*

Third, they suggest that perhaps your employer has installed charging facilities and that you could use those. And fourth, they note that some hotels, shopping malls, and parking lots have chargers available.

Notably absent is any suggestion that you could charge your rental at a Hertz rental agency.  This would be because Hertz made the corporate decision not to install chargers at its locations.  After years of encouraging renters to bring cars back without a full tank so they could collect fees, Hertz thought that first time EV drivers would not only figure out how to recharge their cars, but they’d also carve out 30-60 minutes to do so as they raced to catch a departing flight.  

Evidently this plan didn’t work.

A quick review of reddit shows a lot of dissatisfied customers. Many of them felt completely lost as to how to charge their car.  The company was also not entirely clear on how full the batteries were supposed to be when they returned the car, which resulted in numerous different types of fees that surprised renters.  Some agencies had to turn around cars so quickly that they didn’t have a chance to recharge them, so renters got behind the wheel of their new car only to find there was 20% charge left.  All this confusion alienated a lot of potential renters.

Hertz responded in three ways. First, they creating a flat $35 fee for anyone who returned an EV with less than 70% (or 80%?) charge, which made the return process a bit more streamlined.  Second, they began offering “manager’s specials” across the country, sometimes pricing EV rentals at less than half the price of a gasoline powered car. And third, rather than install chargers and fully educate consumers, they decided to divest and began selling off their electric cars at significantly less than they paid for them only months earlier.  Evidently the losses they are taking on their EV inventory is making a serious dent in their bottom line and frustrating investors.

Some may see the issues Hertz has had as a black eye for the future of electric vehicles. Its EV initiative clearly failed. But I hope it can be seen as a stark reminder that you can’t simply swap out a gasoline powered car with an EV and hope that everything will be fine.  EVs may well become the dominant form of personal transportation, but there will need to be a transition to get there.  In addition to a change in powerplants, there will need to be significant changes to infrastructure, regulations, and the people who drive them. The more that everyone involved in the transition recognizes that, the more smoothly the transition will be.

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* I do want to give Hertz some credit though.  When they discuss Level 1 chargers they note and that they “could potentially take days to provide a full charge.” I wish others had been this honest with me.  (https://techskepticgoeselectric.substack.com/p/experimenting-with-a-level-1-charger)