Hertz, Enterprise at odds over changes to reduce car-rental risks

The Houck sisters, Raechel (left) and Jacqueline, died in October 2004 in a PT Cruiser they had gotten from Enterprise Rent-a-Car.
The Houck sisters, Raechel (left) and Jacqueline, died in October 2004 in a PT Cruiser they had gotten from Enterprise Rent-a-Car.
Posted: June 25, 2012

In hindsight, many of the vehicle crashes that kill more than 30,000 people a year in the United States seem utterly senseless — avoidable if a drunk had just stayed off the road, a distracted driver had let a text go unanswered, or a commercial driver had been better rested or less worried about the costs of delay.

Even in that sad litany, the deaths of Jacqueline and Raechel Houck stand out: preventable by a simple fix in car-rental practices. Yet, after two years of crusading to get rental-car companies to change their ways, their bereaved mother, Carol "Cally" Houck, still hasn't quite succeeded.

Jacquie was 20 and Raechel 24 when they died in October 2004 in a PT Cruiser they got from Enterprise Rent-a-Car. They were killed in a crash on a California road after fire erupted under the hood and they lost control. After long litigation, Enterprise admitted liability two years ago, and accepted a jury verdict that awarded $15 million to their family.

Enterprise's failure? It rented the car to the Houcks even though the vehicle had been recalled by Chrysler for a safety defect — a faulty power-steering hose that could lead to seemingly spontaneous fires — a month before the crash.

"That car was a ticking time bomb," says Cally Houck, who says she learned through the lawsuit that Enterprise had rented the car three times before without bothering to have it repaired. "When they got there, it was the only car on the lot, and they were told it was an upgrade."

Houck learned, too, that the risk wasn't isolated — or limited to Enterprise, a privately held Missouri company that now ranks as the nation's largest car-rental company and that also owns the National and Alamo car-rental brands.

After the verdict, an Enterprise executive acknowledged the company's mistake. "Given all we have learned," he said in a statement, "today we would not rent the vehicle the Houck sisters were driving until it was repaired."

But Enterprise held out the possibility that it might still rent a recalled vehicle if it judged the risk to be minimal. And others in the industry described similar, carefully hedged policies.

Shocked by what she heard, Houck turned for help to advocates such as Rosemary Shahan, president of California's Consumers for Auto Reliability and Safety, and later to lawmakers such as Sens. Charles E. Schumer (D., N.Y.) and Barbara Boxer (D., Calif.).

Decades ago, Shahan helped win passage of the nation's first lemon law. But even she didn't realize the risks that rental companies were taking. She knew that new-car dealers couldn't sell a recalled vehicle without first making repairs, so she assumed that car-rental companies faced similar requirements.

"At first I was aghast, because I didn't know the loophole existed. But then I realized, ‘We need to change the law,'?" Shahan says.

That goal is embodied in legislation proposed by Boxer and Schumer. But Boxer has been pushing for an interim step: a public pledge by rental companies "not to rent or sell any vehicles under safety recall until the defect has been remedied."

Hertz, the nation's number-two car-rental company, stands out by its support, Shahan says. In a letter to Boxer last month, a Hertz executive made the commitment she requested, saying it reflected "long-standing Hertz policy." Shahan says Hertz has been "lobbying with us" to write the policy into law.

But other competitors, while saying they agree with the pledge's general principle, have balked at such a straightforward promise.

Shahan says Enterprise and the number-three company, New Jersey's Avis Budget Group Inc., have proposed watering down the bill that Hertz now supports.

One change would allow them the wiggle room to make repairs "as soon as practicable" rather than before further rentals. Another would allow them to decide that notice to a customer at a car-rental counter would be adequate to justify renting an unrepaired car.

Enterprise has suggested, for instance, that it might rent an unrepaired vehicle recalled for a failure in a seat-belt warning chime if it could advise a customer beforehand.

Shahan says permitting such discretion adds needless risk. If a wiggly child in the backseat disconnects a seat belt, the chime gives instant warning, while words spoken at a rental counter may fade into memory.

Rental risks aren't the only issue here: Car-rental companies also sell a lot of cars into the used-car market. An unrepaired rental car today could be an unrepaired used car tomorrow. Recall notices don't travel with a car's title.

Shahan says she understands the financial hit that rental-car companies face when they have to ground a car or forgo a rental, and says a level playing field would help the industry adapt. But she says one proposal by Enterprise and Avis — to also apply any new rules to taxis and limousine services — is less about fairness than about "trying to get more opponents to anything we do."

Shahan says opponents to clear rules are also disingenuous when they compare delays in repairs to consumers' tardiness in responding to recalls, or their willingness to continue driving a car when a recall doesn't explicitly recommend grounding.

"It's very rare for manufacturers to tell consumers not to drive a car," she says. "If it's your car, you may decide you're not going to drive it, or not let your kids drive it."

In contrast, rental cars are used intensely — often driven hundreds of miles a day by people who want a newer, safer car for a business trip or vacation.

Houck has amassed more than 161,000 signatures on a Change.org petition drive urging Enterprise to embrace her proposal. Earlier this month, she joined Boxer at a Capitol Hill news conference to retell her story and urge other companies to go along with Hertz.

"I feel compelled to do it, to honor my daughters' memories," she told me Friday. She says Jackie and Raechel would have counted on her to not give up.

"There's one thing that would fix this. It's easy, it's fair, it's not super-regulation or Big Brother," Houck says. "It's very simple: If you have a car under safety recall, you don't rent it, you don't sell it, you don't put it into the hands of a consumer. That's all we're asking."

And if she finally succeeds, this much is clear: There will be families somewhere who will be spared needless tragedy. And they'll never know the role that Cally Houck played.

Contact Jeff Gelles at 215-854-2776 or jgelles@phillynews.com.

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