By on April 5, 2011

We’ve long struggled with finding the right balance of recall coverage here at TTAC, as the sheer volume of them makes it extremely difficult to separate the life-saving wheat from the irrelevant chaff. Now, it seems the rental car industry is tired of struggling with the same challenge and is lobbying the government for reform of the recall system. Bob Barton of the American Car Rental Association explains the problem to the NYT

We can’t determine the significance of a recall and whether a vehicle is no longer safe to operate or whether it can continue to operate and then should simply be brought in for service at some point in time. We simply want the manufacturers to instruct us when a vehicle needs to be grounded and we will absolutely comply.

Fair enough. Recalls are carried out for plenty of non-safety-critical problems. But where do you draw that line? And, more importantly, does the rental industry enjoy enough of a reputation for safety consciousness to assure customers that their calls for reform won’t result in any increased danger?

It turns out that these two questions are actually closely related. Despite its framing of this lobbying issue as a matter of practical reform, the rental car industry is actually responding to a NHTSA investigation that recently found

30 days after a recall — 10 to 30 percent of vehicles sold to rental car companies had been repaired.

By 90 days, it had improved to about 30 percent and within a year, the number had improved to 50 percent or higher…

Rental car companies are not legally required to complete recalls before they rent the cars to customers.

This finding, that rental firms aren’t legally compelled to rent fully recall-compliant vehicles and that recalls take months to receive fixes, raises serious questions about the industry’s ability to guarantee the safety of their vehicles. Given the lack of legal pressure to comply with any recall, the NYT asked Barton how rental firms respond to recalls in the status quo.

Asked how recalls are handled now, Mr. Barton said: “If we get a notice that says the vehicle needs to be grounded, every company will set their own policy. But as a general rule I would suggest everybody would ground that vehicle.”

Asked about recalls for which the automaker does not say the vehicle should be parked until fixed?

“Every company will set their own policy, but ultimately that repair will get done, but maybe not immediately,” he said.

Not the most reassuring responses ever, to be sure. And given NHTSA’s investigation into the timeliness of rental fleets’ recal repairs, it seems obvious that this lobbying effort is a way to keep the industry operating without increased repair costs should NHTSA (or Congress) demand timely compliance with recalls. But without a coherent industry position, it’s hard to put its lobby arm in the driver’s seat of reforms to the nation’s entire recall system. As a result, a number of consumer groups have already voiced opposition to the ACRA’s initiative.

On the other hand, the ACRA insists that not even taxi or shuttle bus fleets are able to comply with the sheer volume of recalls, so a measure requiring the same level of recall compliance as new car dealers could have impacts beyond the rental car industry which has already attracted scrutiny. If NHTSA wants to take on the challenge and risk of creating a graded recall system, it should do so as a way to improve the communication of defects rather than a way to enable businesses who cut costs on safety. But if that happens and deaths from rental car and taxi malfunctions increases, there will be no evil lobbyists to scapegoat. NHTSA will have abdicated its mandate. Reforming the recall system is a big step and it should be done extremely carefully.

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4 Comments on “Rental Car Industry Calls For Recall Of The Recall System...”

  • avatar

    As a fleet manager I can tell you that this is an issue for every fleet, not just rentals. Making these calls is part of my job and I would expect rental company fleet managers to do the same. If the recall is a basic safety item like brake, tire or steering related then I will ground units unless the problem is very minor. A quick call to the manufacturer’s rep will often clarify the issue, and they know better than to BS a fleet customer. Someone else is always trying to sell me their trucks. The decision to ground fleet units is sure to upset the operations department, essentially my “customers”, but tough calls are what I get paid to do. My employer understands this, although I am expected to use sound judgement in the matter. Everyone understands the legal ramifications should one of our units be involved in a serious accident where an uncorrected defect proves to be a factor.
    This sounds to me like someone wants to offload some responsibility. I can imagine the logistical nightmare of trying to find every unit affected in a widely scattered fleet. The cost of inconveniencing customers and getting all those units in for repair would also be high. A wrong decision either way could be catastrophically expensive, but that’s business. A better strategy would be to insist your supplier of vehicles provide a better product. This is one of the reasons I no longer solicit bids on light trucks from Chrysler dealers as an example. My small volume won’t change anything there, I just don’t have that kind of clout.
    But the big rental fleets sure do.

    • 0 avatar

      >>A better strategy would be to insist your supplier of vehicles provide a better product.<<

      This is the crux of the biscuit. Having to grade recalls pales if you reduce the amount of recalls necessary.

  • avatar

    If you’re in the car rental business you need to know how to use the internet. Want some advance warning? Check your vehicles on NHTSA once a week, you typically only carry a few models of one make so how hard could that be? Want a great reason to get your customers email? Tell them for safety reasons they may have to be notified during their vacation.

    Most minor recalls involve a notification sticker of some kind be applied. How long does that take? The slowest employee should be able to sticker up 50 cars in an hour.

    What this group is looking for is a way out of the prolonged serious recall. The type of recall like the rear latch on a Chrysler minivan where they tell you its dangerous but don’t come in until we have enough parts. This type of prolonged recall is getting very common and is a disaster from a liability standpoint. What does a rental compnay do? keep renting the cars until the parts come in or quickly lease a bunch of new cars? You know what your lawyer would say.

    The first comment was right – just start leasing cars and trucks that have lower rates of recalls – that is to say before you buy your next fleet of rental cars take five minutes to check the vehicle’s previous recall history, you have the internet so use it.

  • avatar

    No one auto manufacturer is immune to recalls.  I think the best practice on the recall standpoint would be to diversify the fleet, but that means more time and training for maintenance items, which is probably much more costly.  I often read about recalls on the internet before my dealer knows about them and sometimes before the recall is in their system.  So, knowing ahead of time isn’t going to solve many problems.  I also imagine that the lines at a dealership might be quite long when someone is trying to get fleet vehicles fixed via recalls.

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