International Car Rental Compliance
When I flew over to Austin in Texas to speak to a room full of people about international compliance, the moment the opening screen came up on the display, the groans and sighs around the room were tangible.
I joked that compliance had become the sexiest part of my job since the dancing pole had been removed from the office. That gained their attention slightly more than before, but then I set out to show why this is more than being compliant...
It’s about how trust can be developed with your customers, and in most cases that begins with a visit to your website. From that point they’re on their own, with nobody to explain, inform and hold their hand through the process.
With around 14 years of experience under my belt in global car rental eCommerce, and despite my areas of responsibility already spread across a number of areas, in 2014 I was also tasked with overseeing online compliance in a project we called the
Pricing Clarity Initiative but it turned out to involve so much more than clear pricing.
Meeting these legal obligations provided the opportunity to make many improvements which, without exception, were for the customer’s benefit. The challenge was how to implement these changes to a global car rental platform when the same rules didn’t apply globally.
It took a lot of effort, and there was some resistance, but it was the catalyst for many customer centric improvements which made a positive difference, increased trust, and were good for the brand.
Although my initial objective was to meet the demands of the European Union Commission and the CMA for the websites which served our European customers, most of the changes would have a consequential impact on other countries too, and not necessarily in a good way.
So the scope of the overall compliance initiative, which involved multiple projects of varying magnitudes, needed to be expanded to a global perspective.
The varied rules, requirements and expectations of other countries also needed to be taken into account, and solutions implemented so that Europe, the US, Canada, Australia and elsewhere could have their own rules and requirements handled appropriately.
Some were cultural, but many were legal and they varied from country to country. They included rules around source based pricing, surcharges, age restrictions, opting into marketing communications, and many others besides clarity around pricing, such as whether prices displayed are inclusive of taxes and other charges.
In the UK you would expect that if a child seat priced at £20 is added it to a car rental reservation, the overall price of that reservation would increase by £20 because the displayed price should be inclusive of taxes and other charges.
That's what UK customers expect. They also expect that items in a shop are displayed with their final price, and wouldn't expect more to be added at the checkout. In the US things are different, because sales tax is added to the cost of the item at the checkout.
So on that basis, in the US if a child seat priced at $13.99 is added to the reservation, the price is likely to increase by a few dollars more than $13.99 due to tax being added, as well as increases to other charges, such as location service charges, which can also be subject to tax.
But what about a UK citizen who wants to rent a car in the US? you might ask.
Based on the aboove explanation, the US rules would cause the price of the item to be displayed exclusive of tax, because that's what US customers expect. But for the UK customer, the additional increase in the amount added to the overall total could be confusing. It could even lead to them feeling that they're being ripped off, and that would be contrary to what the
Pricing Clarity Initiative set out to achieve.
Country driven rules
For this reason it was necessary to determine what conditions needed to be met for each requirement to be handled correctly. Some conditions would need to be based on the customer's country of residence, and some based on the country of rental. We referred to those as
destination countries, respectively.
In some cases the combination of countries needed to be taken into consideration, which was especially relevant around the time of BREXIT when the UK left the EU...
Suddenly there were different rules for UK citizens renting a car in Europe, and European citizens renting a car in Europe, which now needed to exclude the UK. This brought about a number of specific functional changes, such as for the new requirements surrounding driving licences and driving permits.
Why might a car rental company display prices as
Estimated, even when making the effort to be transparent about pricing? After all, most customers want to know precisely how much they'll be paying, and not a estimation.
On one hand, there is the potential for the customer to add other options to their rental when they arrive at the counter. This might include insurance waiver upgrades, or adding another driver. But in my opinion if the selections made online are all that the customer requires, why might there still be the need to state that the price is approximate?
Currency exchange rates are often the cause. Let me explain...
Currency exchange rates
Fluctuations in currency exchange rates happen all the time, and if you check the exchange rates between two currencies today, by tomorrow they might have changed. So how can this impact car rental prices?
Let's look at some of examples:
Ex1: Source US > Destination US
If a US customer is renting in the US, they'll pay in USD, regardless of whether they're paying in advance online, or paying when they collect the vehicle. Therefore there should be no need to show the price as
approximate based on the source and destination currencies being the same.
Ex2a: Source US > Destination UK
If that same US customer intends to rent in the UK, and is paying ALL of the cost their rental cost online in advance, or ALL at the location, there should be no need to show the price as
Ex2b: Source US > Destination UK
However, if that same US customer is renting in the UK but will be paying online in advance, but also has part of the rental cost to be paid at the location, the proportion payable online would be in USD, and the amount payable at the location would be in GBP.
In this case it could be appropriate to display the price as
approximate, because the exchange rate between USD and GBR could change between when the reservation was made online, and when the vehicle is picked up.
For this reason part of the Pricing Clarity implementation was handled with some logic in the coding based on whether the source and destination currencies are the same, and whether ALL of the total cost was being paid online or at the location, or whether part of the total was being paid online, with the remainder at the location.
As such there were three variations of the messaging which enabled us to be compliant, and of course this made things far clearer for the customer.
Rate display and comparisons
The display of prices in different currencies can also apply to the page where the vehicles are displayed.
The currency to pay online will typically be displayed in the currency of the renters currency of residence (source currency), and the currency to be paid at the location will typically be in the currency of the rental location (destination currency).
Pay Now to
Pay Later rates
If both source and destination currencies are the same, that makes the display very straightforward. But if the currencies are different, and the price for Pay Now is displayed in source currency whilst the price for the Pay Later option displayed in destination currency, it can be difficult for a customer to compare Pay Now and Pay Later Rates.
It could be difficult for a US customer renting in London to decide whether paying 132 USD in advance is a better deal than paying 119 GBP later.
Likewise, it could be difficult for an Italian citizen renting in Toronto to deciding whether paying 70 EUR in advance is a better deal than paying 105 CAD later.
So by providing a like-for-like comparison in the same currency for Pay Now and Pay Later rates, it can make the decision easier for the customer.
An example is shown below, where the Pay Later price is displayed in destination currency, but with an approximate price shown in source currency. This will usually be based on today's exchange rate between the two currencies, but it has the potential to change when the exchange rate changes.
However, if the Pay Later rate uses a real time currency conversion which is based on the currency of the rental location, it is likely that "Approx" will be displayed next to the price. This is because currency exchange rates change frequently, and are likely to have changed... up or down... by the time the rental takes place.
A lack of consistent naming can also lead to confusion!
Inconsistent naming can lead to confusion!
Different ways of referring to the same or very similar charges can also vary from country to country too, and the use of industry jargon doesn't help either.
Rental Surcharge, Location Service Charges, Customer Facility Charge, Vehicle Licensing Cost Recovery, Vehicle Licencing Fee, One Way Surcharge, Drop Fees, and different ways of referring to age related surcharges and other fees, charges and options also have the potential to confuse customers.
Confusion and Trust
A confused customer could simply leave the reservation process and go elsewhere, but they can also become suspicious about what they're being charged for. So to put it in simple terms, if you aren't prepared to be clear about what you're charging a customer for, why should they trust you?
Add language to the mix
I have shown how customers living and renting in the same and in different countries can influence the content, messaging, currencies, features, options, requirements, terms and conditions, etc. Age can also have an impact, and the level of impact can also depend on the country of rental.
Add 28 languages into the mix, to cater for citizens throughout Europe and the rest of the world, and you have a challenge!
This is not just a case of translating the words on the website. Remember that much of the content is dynamic, which means that each customer during each separate visit to your car rental website will see variations in content and options based on the selections they make.
It's not all staring you in the face...
There will always be far more content
behind the scenes than you'll see at any one time when viewing a page. Some of that content may be held in a Content Management System (CMS), as well as in database tables, and in separate tools and systems that are used during the reservation process. That could include location information, vehicle info, ancillaries, legal and informative content, promotional content, and so on.
Remember that country variations of individual sentences, paragraphs or even entire sections may be needed, based not only on where the customer lives, but where they'll be renting a car.
So the volume of content and variations could be vast depending on your business model, market and customer base. But with planning it is manageable.
Can we cut corners?
You answer that, bearing in mind what you think of your customers, and the level of risk you're prepared to take. Here's a real life example to illustrate the point:
During the time I spent implementing changes to comply with EU regulations, a consumer programme which is broadcast on a national TV station here in the UK, featured complaints for car rental in general.
One of the complaints focused on a Portuguese citizen renting a car in Germany. The Portuguese customer had been handed a rental agreement in German, and was asked to sign it before being allowed to take the vehicle.
Subsequent delays and lack of the clarity over the terms for returning the vehicle left the customer with additional costs which he was unaware of because he couldn't understand German. And even though he made the reservation online in Portuguese, the information relevant to the charges he faced was not available.
Of course he felt it unfair that he had been put in that position and that this had led to additional costs.
The complaints that followed led to fines being imposed on that car rental company (who were named on the programme!), but it also looked bad on the industry overall.
It was therefore a sobering thought that we already had translated rental terms available online to download, but it was a timely reminder the compliance, transparency and fair treatment of customers can make a huge difference.
So much more to cover...
There is scope for so much more to be discussed, whether it be additional examples of compliance issues and examples throughout a
guest) reservation, or a reservation where the customer has enrolled into a loyalty scheme, or is taking advantage of a promotion.
They might be a corporate client, or they might be renting with your company via a third party booking channel, such as Expedia, or RentalCars.com, or as part of an affiliation you have with hotel or airline company.
GDPR is of course an important part of compliance which I haven't touched on here due to the focus given to the car rental reservation process, but it should of course never be overlooked.
This is more than being compliant... This is about how you develop relationships with your customers.