Airport customers could pay 11 percent more on rental cars
BY FRAN SPIELMAN City Hall Reporter firstname.lastname@example.org December 11, 2012 1:10PM
Budget car rental at O'Hare | Sun-Times Library
Updated: January 13, 2013 6:20AM
O’Hare and Midway Airport passengers could pay 11 percent more to rent a car — in addition to the $8 and $3.75 fees imposed respectively last year to bankroll rental car campuses — under a plan advanced Tuesday after the rental car industry agreed to bolster minority contracting.
Rental car companies wanted the right to levy a so-called “concession recovery fee” that would allow them to recoup from their leisure customers costs paid to the city for the right to operate at O’Hare and Midway.
That gave the City Council’s Black Caucus the leverage it needed to bolster minority contracting hampered by the rigid earnings definition of a “disadvantaged” business imposed by the federal government.
In a ground-breaking side deal tied to the new fee approved by the City Council’s Aviation Committee, the rental car industry agreed to voluntarily strive to give companies certified by the city as owned by minorities and women 15 percent of “non-fleet” expenditures from 2013-to-2016 and 30 percent after that.
That’s as much as $30 million a year for everything from auto parts, repairs and body work to insurance, gasoline, advertising and custodial services.
“This is the first time this has ever been done anywhere. . . . It was 0 percent before,” said Ald. Leslie Hairston (5th).
“The opportunity was, they were now deemed a concession and, as such, had to meet the city’s requirements. . . . With the economy being what it is and seeing jobs leaving the city, we want to make sure that we do something to keep jobs.”
Robert Bouta, senior vice president of the Avis Budget Group, called the side deal “historic, groundbreaking and totally new. . . . This will allow us to get outside the scope” of the federal definition of a disadvantaged business and use companies “properly certified” by the city.
But he warned that the industry would need a “ramp-up time” to get to the $30 million-a-year goal for minority contracting.
As for the 11 percent fee to be imposed on airport car rentals, Bouta called it a matter of fairness. O’Hare and Midway are the nation’s only major airports that do not allow rental car companies to pass along to leisure customers the costs of doing business at the airports.
“It gives us a chance to structure our rates similar to Orlando and New York,” Bouta said, pegging the fee at roughly $3 for a $30-a-day rental.
“We now have the option to pass the concession fee through to leisure customers. We don’t do that automatically. We can’t agree to do that as an industry. It’s just that this city has been the only city that hasn’t given us that option. We would like to make more money if the market allows.”
Last year, the City Council approved then-Mayor Richard M. Daley’s plan to add $8 to the cost of renting a car at O’Hare to bankroll a $393 million facility that will consolidate airport rental car companies into a central location to make way for new runways. A $3.75 fee was imposed at Midway.