Road Warrior

As Rental Car Rates Rise, Travelers Take Taxis

Charisse Jones, USA Today
Michael Goldman | Photographer's Choice | Getty Images

Colby Reeves Jr. was used to renting a car to get around town on his frequent business trips.

Now, Reeves says, high rental rates increasingly are forcing him to bypass the rental-car counter and head for the nearest subway stop or taxi stand. (Read more: Seven Tips for Saving on Rental Cars)

"I think it is only prudent to consider the cost and convenience of a cab," says Reeves, executive vice president of a construction company who lives in Knoxville, Tenn. "It takes a very long cab ride to cost as much as a rental."

Rental car rates vary from city to city, or by the day of the week. They can soar because of a convention or plummet because of a storm. But rates generally have been on the rise this year compared with 2012, and some frequent business travelers say costlier rentals are leading them to seek other ways to get to a meeting or hotel.

Car rental consultant Neil Abrams says his company's travel rate index is on an upward trend.

The index, which looks at the eight major car-rental brands in 10 large airport markets, shows the daily rate for a midsize car booked a week in advance was $65.08 on the third Monday in January compared with $58.42 that day last year.

Enterprise, which also operates the National and Alamo rental car brands, says rates at some of the top 200 airports their brands serve were up to 4 percent higher in February than during that month last year.

Bailey Allard, a consultant who lives in Chapel Hill, N.C., and is on the road roughly 45 weeks a year, adds up the numbers for every trip.

"It is almost always cheaper to take taxis than to rent a car, unless I can get a deal on (discount site) Priceline at the 11th hour," he says. "It's gotten crazy."

A cab not only can save money, Allard says, it can save time.

Often, he says, "You have to take a later flight just to turn your rental car in and make the plane."

Betsy Olwine, a director of sales training operations who lives in Denver, says she is also taking taxis more often because it works out better for her bottom line.

"Taking a cab was cheaper and easier for the amount I was driving," she says.

Piling It On

Other corporate trekkers say they're less put off by the rental rates than by the taxes and fees tacked on to their bill that can dramatically increase the final tally. (Read more: Sticker Shock: Cities With the Best and Worst Travel Taxes)

"The taxes and fees can add up to 25 percent of the bill, so it is a big issue," Chris Brown, executive editor of Auto Rental News, says of the levies imposed by some municipalities to raise money for a new stadium or other project. "I think there is a general thought ... out there that these fees are exorbitant, and they could catch the renter off guard."

Ned Maniscalco, spokesman for Enterprise Holdings, says company officials recognize renters' concerns.

"There are numerous examples of taxes that get added to the cost of a rental car ... that are not really related to transportation," Maniscalco says. "It's an ongoing issue and one we're doing our best to make our customers' voices heard on."

On a recent trip, Bill Catlette, an executive coach and author who lives in Collierville, Tenn., rented a car in Seattle for a week.

But when he did the math, he decided to return the car a day early and hail cabs instead.

"It's reached a point where the add-on fees, particularly when you're renting at an airport location, (are) outrageous," Catlette says. "You turn a rental car in and look at the bill and you've got 25 percent or 30 percent in fees on there. ... It's like looking at your phone bill."

Returning his rental car early meant Catlette spent roughly $50 on taxis, and saved about $15. "And I didn't have to do the driving or pay the parking," he says.

Peter Juhren says he finds rental car rates reasonable but is fed up with the extra fees and taxes. If he's in a city such as New York or Washington, he hops on the subway.

"They are economical, clean, inexpensive and usually faster than surface transportation," says Juhren, a corporate service manager who lives in Salem, Ore.

Lower-Cost Cars

Some trekkers continue to rent a car. But rather than pay for additional perks, they save money by using their own devices.

"Because it's so much better to have the flexibility of a rental car, I am continuing to rent from Hertz as opposed to getting a cab," says Scott McKain, a business consultant who lives in Henderson, Nev. "However, what I have cut back on are the extras."

Instead of paying extra for a satellite mapping system or satellite radio while he drives, McKain uses apps available on his iPhone.

"I find I'm saving at least $40 per rental by the time you include all the taxes and fees," McKain says, "with zero loss in terms of the experience I'm receiving as a traveler."

Some corporate trekkers who stick to renting cars have their own strategies for getting the best price, such as picking a car up at a location other than the airport.

Charlie Massoglia, an executive at a food products company in Jackson, Mich., says he opts for cabs only when the parking tab for a rental car will be as much as the rental itself.

"Otherwise, I get creative in making reservations," he says. "Frequently, you can get a less expensive rate making a U.S. car rental reservation from a non-U.S. site."

It can also be cheaper to book a flight and rental car as a package rather than individually, he says.

Others appreciate a little solitude behind the wheel, whatever the cost.

"After dealing with crowds all day, the last thing I want to do is spend more time with a bunch of people I don't know," says Earl Quenzel, owner of an advertising agency based in Fort Myers, Fla.

"Renting a nice luxury or specialty car from Hertz with a good sound system ... is the perfect way to wind down after a stressful day of traveling." (Read more: Audis For Everyone: New Rental Car Firm SilverCar Offers Only Audi A4s)