Should Avis be allowed to charge XXX. Of course. During the converse, when there is a glut of cars a

John was scheduled to fly from Chicago Midway to Minneapolis for Christmas with his family on Tuesday evening, Dec. 23rd. When he arrived at the airport, he learned that his flight was canceled and that the airline could not get him on another flight until Christmas Day.
As we wanted him home for Christmas Eve, he attempted to rent a car from Avis for a one-way drive to Minneapolis. At the time, the Avis service person said that they only had three cars left. Neither agency on each side of Avis had any cars left.
Well, I understand the principle of supply and demand. But I was stunned by the rate that was quoted, which was an estimate of $855 for the rental. The actual hourly rate quoted was $336 an hour or $4,204 for the week.
Many states have price-gouging laws, but you only hear about them during natural disasters like hurricanes, when grocery stores double the price of staples or hotels raise room rates to take advantage of displaced airline travel agent discounts guests.
I am an adjunct professor on the faculty of the University of St. Thomas in St. Paul, Minn. For nine years, I have taught a graduate level course called Strategic Quality Management, which is centered on the principles of performance excellence, leadership integrity, and continuous improvement of high-performing organizations.
This experience, suffice to say, constitutes a bad case and I plan to make the most of it in our class. It has several teaching points, not the least of which is the apparent disregard for the Avis Quality value statement on your Web site:
I think the main problem was the one-way rental. airline travel agent discounts We were in a situation where a local PA hertz location wanted to charge us $500 for a one-way fee. They had no real affiliation with the Hertz locations here in Baltimore so we drove it back when we no longer needed it. Normal rental rates just a fee for one-way.
While I believe Avis was wrong for charging this price the customer still had the option of walking away. If you went to buy a TV or a car and the price was too high would you buy it and then request a refund. I went to Avis website today it would not give a quote kept saying sold out Hertz quoted $160.00 The airlines charge more for last minute airline travel agent discounts fares I suppose the rental car companies are entitled to abuse the public the same way. I think your header was a little bt over the top with sensationalism. No one was paying $336 / Hr saying $855/ day would have accomplished the same interest more honestly
I would call this another case where the service operator cared more about his end-of-year bonus, that about the customer. The problem with paying these guys commission is that they care about their wallet before they care about the customers wallet. The company hurt itself by its own rewarding scheme.
So I don t think it s entirely fair to blame the service operator entirely. The problem is more with the way companies airline travel agent discounts reward their sales reps. The same thing got the entire economy in trouble with the financial crisis. When people get paid commission, they don t care about the customer, nor the company anymore. They only care about their own wallet. Especially in cases where the chance is really small that the operator has to face the same customer again.
Should Avis be allowed to charge XXX. Of course. During the converse, when there is a glut of cars and Avis has to charge firesale prices, then customers should offer to pay more because the prices are too low? Of course not! The relationship with Avis is an arms length transaction with the price being set by whichever entity has the stronger position. During holidays its Avis, and during off-times its the customer.
As a teaching point, Floss s story fails, not the least of which because he s not a disinterested party, but also because Floss was in a position to make an informed, rational choice, which he did, but has unilaterally decided that the price, which he agreed to, was too high.
First, Floss didn t try very hard to get a better price. According to the story he only tried three rental agencies before agreeing to pay this huge sum. Under those circumstances, I don t really feel that sympathetic. As a professor, surely airline travel agent discounts Floss is internet savvy. He could have fired up the old laptop and checked dozens of car rental agencies, or depending on the time of day, called airline travel agent discounts a travel agency and paid them do it for him. I mean, its Chicago, not some far away place with 1only one car rental agency.
I was in a similiar situation the very next day needing a rental airline travel agent discounts car and my preferred vendors were out. I found cars on priceline/hotwire at $150 per day in Los Angeles. I can only surmise that the same would have been true in Chicago.
Second, Floss exhibited inflexibility. He and his family wanted him home by Christmas Eve. I respect that. But one of the prime rules of travel airline travel agent discounts is that if you have no flexibility in your travels plans, airline travel agent discounts be prepared for the very real possibility that you will pay through the nose. There is no indication that Floss checked out any other possibilities such as flying another airline, or revisiting the decision that being home by Christmas airline travel agent discounts Eve was inviolate.
The reason why states have anti-gouging laws during natural disasters is because people don t have a choice about purchasing food and water once the normal competitive infrastructure breaks down. Floss case is not remotely analagous. Floss didn t have to take Avis offer. He made a conscious decision with his eyes wide open. There is no ethical precept which would require any refund.
I have to agree with Carver Farrow. While I still think Avis was short-sighted for charging such a ridiculous sum (they have lost that customer permanently), the customer did have other options and chose to accept the rate. Christmas Eve is of course a tough time to start exploring last-minute options, and perhaps Avis will decide to be nice and issue a partial refund. But basically what happened airline travel agent discounts here is a vendor named a price and the customer accepted. This is very different than already having a reservation and then being charged a higher rate.
The key part here is not that it is a per-hour rate. It is the one-way fee that was charged as a daily rate rather than a single line item. If this customer had chosen to return the car to Midway as a normal renter would have done, they would have gotten a normal rate. This is NOT supply and demand. If they had a lot full of cars, I am confident that they would have charged airline travel agent discounts the same exact rate.
When a company airline travel agent discounts charges ANY price for anything and the customer accepts, airline travel agent discounts it is NOT price gouging. If the company CHANGES airline travel agent discounts the price after the customer accepts the price, then and only then is it price gouging. Honestly, do you want some government employee who has probably never run a business to be in the business of dictating if there is or is not price gouging?
Now, I understand supply and demand just fine, but that sort of price increase in response to a holiay snowstorm seems shortsighted. After all, you can shear a sheep many times, but you can skin him only once.
To me, it s just bad business. Looking at the group he was rented, airline travel agent discounts the car has an MSRP of approximately $11,000. It crosses a line when the customer would be better served by buying a new car, and returning it, instead of renting it.
Sven, it looks to be a Hyundai Sonata. airline travel agent discounts I don t think that s considered a compact. I agree that Avis was within its legal rights airline travel agent discounts to charge this ridiculous fee but I hope the publicity was worth it to them.
Larry Bradley What dictionary are you using? Charging $10.00 for a bottle of water in the aftermath of a disaster is one very common example of price gouging, yet it flies in the face of both of your definitions; the price is set at $10 BEFORE the buyer accepts the offer, but the buyer accepts the price due to duress.
Of course he had to accept the price. It was Christmas Eve. It was in the middle of a snow storm that canceled everyone s flight. I suppose he could have sat around in the airport airline travel agent discounts for a few days (I believe they canceled Christmas Day flights, too) and completely missed Christmas. In fact, he could have missed his trip all together if he only took a few days off. If he wanted to get home, he had to fight the other thousands of stranded people for a car. A bus would not get him to Minneapolis in a timely fashion (they couldn t run in the bad weather either). Come on, people, there were not other options available to him.
It is absolutely price gouging. Remember after 9/11 and some stations sold gas for $5/gallon? That was price gouging because it was taking advantage of a disaster to raise their prices to unacceptable levels. People had to accept it because they had to have gas to fill their cars to get to work, get groceries, etc. That was prosecuted by the state s attorney general. I m not sure that will happen in this case, but it s certainly worth looking into.
Price gouging is a subjective term. Everyone has a different definition of what constitutes it. That s the problem with a government official determining it. Usually they do it to get face time on TV for another election to a higher office. Florida s new governor is a prime example. IF free market principles were applied during the aftermath of a natural disaster, I would suggest that supplies would flow faster in needy areas and as a result, the price would drop faster. If someone has a truckload of water in Canada and figures he can make some money even with the transport costs, why shouldn t he be able to deliver it at a profit? The more product that flows in, the faster the price would drop. Government price mandates merely prolongs the process of recovery. If you owned a hotel in Florida and charged 3 times the rate after a disaster knowing that your occupancy rate would fall through the floor due to lack of tourism after the homeowners moved back home, why would you want the government to dictate that you as a business airline travel agent discounts owner could not recover your costs? Do you think the government is going to give up some of