By David Shepardson
WASHINGTON (Reuters) – Two Democratic lawmakers from the US House on Friday asked Hertz Global Holdings (OTC:) and Avis Budget (NASDAQ:) Group to answer questions about rising rental car prices and higher profits in the sector.
Representative Raja Krishnamoorthi, chair of the Subcommittee on Economic and Consumer Policy, and Representative Katie Porter said both car rental companies appear to have used their market position to raise prices as costs fell.
They said in a statement they want documents and information “from both companies explaining rental car price increases despite falling costs, as well as a list of all known investigations into these price increases,” by April 1.
The companies did not immediately respond to requests for comment.
Letters from lawmakers say the financial results suggest the companies “may have prioritized maximum profit and”
shareholder payments at consumer expense” and “may have”
who engaged in predatory business practices during the pandemic, taking advantage of consumers who depend on affordable rental car prices.”
Last month, Hertz posted an adjusted record fourth-quarter profit as rental demand remained strong, but post-bankruptcy restructuring costs resulted in a large net loss.
Avis Budget said in February it had record revenue https://ir.avisbudgetgroup.com/news-releases/news-release-details/avis-budget-group-reports-record-revenues-net-income-and and net revenue in the quarter ended December 31.
The higher sales are the result of an industry-wide drastic price hike as customer demand exceeds vehicle supply, with consumers returning to the rental counter for leisure and business trips, analysts say.Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data.
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