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WASHINGTON (Reuters) -Two U.S. House Democratic lawmakers on Friday asked Hertz Global Holdings (OTC:HTZGQ), and Avis Budget (NASDAQ:CAR) Group to answer questions about rising rental car prices and higher industry profits.
Representative Raja Krishnamoorthi, chairman of the Subcommittee on Economic and Consumer Policy, and Representative Katie Porter said both rental car firms appear to have used their market position to raise prices as expenses fell.
They said in a statement they want documents and information by April 1 “from both companies explaining the increases in rental car prices despite falling costs, as well as a list of any known investigations into these price increases.”
The companies did not immediately respond to requests for comment.
The lawmakers’ letters said the financial results suggest the firms “may have prioritized maximum profits and
shareholder payouts at consumers’ expense” and “may have
engaged in predatory business practices during the pandemic, taking advantage of consumers who rely on affordable rental car prices.”
Last month, Hertz posted a record adjusted profit in the fourth quarter as demand for rental cars remained strong, but post-bankruptcy restructuring costs yielded a large net loss.
Avis Budget said in February it had record revenues https://ir.avisbudgetgroup.com/news-releases/news-release-details/avis-budget-group-reports-record-revenues-net-income-and and net income in the quarter ending Dec. 31.
The higher revenue is the result of an industry-wide drastic increase in prices as customer demand outstrips vehicle supply with consumers returning to the rental counter for leisure and business travel, analysts say.
