March 29, 2024

The Haggler: On a Review Site, Car Carriers Get the Last Word

But which of these companies can you trust? A reader found that question is far trickier than it ought to be.

Q. To move our car from Pennsylvania to Texas this summer, my husband and I chose a company based on reviews on TransportReviews.com. The site is the top Google hit when you search for “car transportation reviews.” I soon realized that using this site was a big mistake.

That was clear after I tried to share the lousy experience we’d had with a company called Door to Door Transport, based in Coconut Creek, Fla. The company was a week late delivering our car, and charged us $215 over the estimate. Plus, I had to spend $315 on a rental car for the days when our vehicle was on its way to Texas.

I explained all this in my negative review. Then Door to Door posted a response that suggested my review was full of fabrications. Specifically, the company said that we had asked for a “closed carrier,” which is more expensive than an open one. Not true. We had never even heard of closed carriers.

Door to Door ended its response with this gratuitous dig, which I’ll transcribe to the letter: “It’s unfortunate they would try to slander a 5 star family-owned company simply because they don’t want to pay for what they agreed too.” When I tried to reply to this reply, I was told by an administrator at TransportReviews that no matter what I wrote, Door to Door would get the last word. Does this seem fair? Tina Peterson

Houston

A. The Haggler first called Door to Door. Then sent a couple of e-mails. Then called again. Not a peep.

But Valley Solutions, the company behind TransportReviews, was more responsive. Valley Solutions is based in Cincinnati, and its president, Andrew Wash, says it owns more than 1,000 domain names, most of them transportation-related, many of them dealing with customer reviews.

“This was an industry plagued by scammers,” he said, referring to the car transport business. “People were going to jail. We decided, ‘We’ve got to do something about this.’ So we launched our site.”

Obvious question: Why give the companies the last word when it comes to reviews?

“I guess we kind of decided to end the back-and-forth at Point 2 rather than Point 3,” he said. “Almost every bad review generates a lot of back and forth, a lot of people angry on both sides. And our administrators are trying to get everybody to come to terms. If we were to allow another round, it would double our work.”

Hmm. How about cutting your work in half and just letting customers post those reviews, without the companies’ response? If the real goal was to limit the number of calories burned to operate the site, that might be a solution.

But let’s get to obvious question No. 2: How does TransportReviews make its money? Three different ways, Mr. Wash explained.

Method 1: For a fee that ranges from $50 a month to $250 a month, a transport company can buy itself a higher profile on the site. For instance, for $100 a month — “silver level” — a company’s name is put in bold in the site’s directory and rotated on one of the four “supporter spots” at the bottom of the home page.

Method 2: Ads for transport companies.

Method 3: For $250 a month, a transport company can vie for the business of people who submit bids for service through the site.

Notice a theme to these revenue streams? Go ahead and reread them, in case you haven’t yet figured it out.

All the revenue comes from transport companies! With that in mind, should anyone trust the reviews on the site? Funny you should ask. Because that very question turns up on a TransportReviews list of frequently asked questions.

“We would say yes, the majority of information on this site is trustworthy,” the answer begins. “There are, however, reasons to be cautious when using this site to help make a decision on which auto transport company to use.”

You might expect in the sentence that follows a word about how all the money for the site comes from transport companies. Instead, you’re invited to click an “About the Reviews” page, which cautions readers that the posts might skew a bit toward the negative because, well, often the people motivated to leave reviews have had a bad experience.

All of this brings the Haggler back to some columns earlier in the year, criticizing the Better Business Bureau for the obvious conflict of interest reflected in its letter ratings for companies that paid annual dues. Often, those grades were A’s when the companies had left hundreds of livid customers in their wakes.

The point is that is whenever you get some online consumer guidance — or any kind of consumer guidance — you ought to know who is underwriting the guide. TransportReviews does not hide the sources of its revenue; a few clicks and you can read all about the bronze, silver and gold opportunities that await anyone with a checkbook. But it could certainly make that point clearer.

Which brings the Haggler to his latest million-dollar idea: a review site that reviews the review sites. It’s genius! Grade them all on trustworthiness, candor and so on. Nothing but page views, right? Now, if only there were an obvious way to finance it.

E-mail: haggler@nytimes.com. Keep it brief and family-friendly, and go easy on the caps-lock key. Letters may be edited for clarity and length.

Article source: http://www.nytimes.com/2011/11/27/your-money/on-a-review-site-car-carriers-get-the-last-word-haggler.html?partner=rss&emc=rss

Bucks: Wednesday Reading: How to Avoid Rental Car Fees

April 27

Wednesday Reading: How to Avoid Rental Car Fees

How to avoid rental car fees, finding French cooking classes taught in English, T-Mobile’s new rate plan and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=0d28419c0296d910a4a659c19a424d73

Your Money: Consider the Worst Case With Zipcar

Paying customers are “members,” and they (mostly) watch out for one another by returning the rent-by-the-hour cars and trucks on time so the next user is not delayed. They clean up their takeout containers and fill the gas tank with Zipcar-paid fuel before dropping off the vehicle. Zipcar encourages members to look out for one another by fining those who don’t embrace this communal spirit.

But so far, it has paid no penalty for leaving customers exposed to enormous legal judgments if they get in a serious accident. It caps the liability insurance coverage it provides for members at $300,000 per incident, no matter how many people they may hurt.

Hertz’s copycat car-sharing service, Connect by Hertz, provides even less insurance: the pathetically low bare minimums that each state requires. And even though Hertz sells better coverage to traditional rental car customers on a daily basis, it does not do so for its Connect customers. Zipcar has no such offering, either.

Last week, Zipcar completed a successful initial public offering. Investors are presumably just fine with the fact that the company keeps its insurance costs down by not making the baseline offering, say, $1 million for everyone.

Zipcar and Hertz car-sharing drivers, however, ought to consider the worst case. That’s what insurance is supposed to be for, after all, and neither company’s coverage protects people from it. Would it be so hard to give customers the option to buy a lot more coverage for a bit more money?

Zipcar has known about this issue for many years. I first wrote about it in a Wall Street Journal column in 2005, when the liability coverage was identical to Hertz’s current offering. Felix Salmon, a blogger for Reuters, has periodically hammered away at Zipcar since that time, too.

In 2007, after merging its operations with those of a rival, Flexcar, Zipcar bolstered its coverage to match what Flexcar had been offering. Today, customers who are 21 or older have $300,000 of liability coverage per accident. That would have to cover mangled limbs, brain damage, pain and suffering and anything else that might befall all the people that a Zipcar vehicle mowed down or plowed into.

Drivers under 21 get much less coverage. Zipcar would have to pay a lot of money to provide $300,000 in coverage to less-experienced college-age drivers, and it figures that most of its users in this age group are covered by their parents’ auto policies anyway. So Zipcar does as little as possible here, offering each state’s minimum requirements and no more.

As for your own bodily injury, Zipcar offers the state-mandated minimum coverage here, too. If you have no health insurance, this could be a big problem.

Zipcar members who do not read the disclosures on the company’s Web site would never know about any of this. And many of them don’t, since the company has persisted with the claim elsewhere on its site that its insurance is “comprehensive.”

Wouldn’t a lawyer for an injured person or the family of an accident victim go after Zipcar first, since that’s where the money is? They could try, but a federal law shields rental car companies in many instances, and Zipcar has already cited it in at least one legal skirmish over someone injured in an accident involving a Zipcar.

Just in case, however, Zipcar still insures itself. In a filing accompanying its initial public offering, the company noted that in the event that it was responsible for an accident, say because it failed to maintain its cars, it had coverage up to $5 million in the United States. That is more than 16 times the maximum protection that it offers its members.

Other Zipcar members may assume that their credit card companies offer insurance coverage for rental cars. And the card issuers’ insurance feature may indeed help pay for damage to a vehicle, though Visa’s excludes car-sharing services like Zipcar. But none of these policies offer any liability coverage.

According to a Zipcar spokeswoman, Colleen McCormick, the $300,000 in coverage has been adequate for every accident since it began operations. She added that more than half of accidents involve only the Zipcar vehicle itself. When another car is involved, 93 percent of the accidents have resulted in claims of less than $10,000, and 99.3 percent result in claims of less than $50,000.

That makes the company pretty lucky. Sure, accidents with injuries are rare, but what happens when they do occur? According to ISO, a data provider to insurance companies, about 2 percent of bodily injury liability insurance claims in the United States are for more than $300,000; in the State of New York, it’s 3 percent.

For brain damage in a vehicular accident, the median jury award in 2008, the most recent year for which data was available, was $289,793, according to Jury Verdict Research, which compiles the data and publishes it. For leg injuries, the median was $192,775.

If you think this sort of thing would never happen to you, keep in mind that if you don’t own a car, you’re probably a bit out of practice as a driver. Even if you’re careful, there are scores of jaywalkers to dodge in New York, where Zipcar has a lot of cars. Many of them are quite well off and would want their salaries replaced if you injured them gravely.

And if you’re in or near Boston, another big Zipcar city, you’re contending with the region’s aggressive drivers, all while navigating a street grid that seems to have been laid out according to the paths made by meandering animals or the American Indian hunters who chased them hundreds of years ago.

So let’s say there’s a million-dollar judgment against you. Will the lawyer for the person you have hurt or the family of someone you have killed settle for the $300,000 that Zipcar covers and then simply go away?

They might if you have no assets and seem unlikely to acquire any. Otherwise, beware. “If you have a young Wall Street stockbroker or someone with a really nice six-figure income or has big future earning potential, it is going to be a different case,” said Steven M. Gursten, a lawyer who has won the largest jury verdict for auto accident victims in Michigan in four of the last eight years. “In 16 years of doing this every single day, I’ve had a handful of doctors and others with multimillion-dollar houses and $50,000 in policy limits.”

Sure, you could declare bankruptcy and hope that keeps a lawyer from garnishing your wages from here to kingdom come. “But at that point, you’ve given up control of the situation and your life is in someone else’s hands,” said David Deehl, a lawyer in Miami who has led American Bar Association seminars for other auto accident specialists. “The bottom line is that it is not safe to assume that people will all go away. Some lawyers are stubborn, zealous advocates.”

If you want more coverage, you can buy something called a nonowner’s auto policy. Campbell Solberg Associates, a New York insurance broker, gave me a $200 quote this week on a Travelers policy that would offer $500,000 of liability coverage. Higher limits from other companies that offer this sort of policy wouldn’t cost too much more.

It would be much simpler, however, if Zipcar and Connect by Hertz would let people buy the insurance on a per-trip basis. Zipcar, in fact, already allows members to pay a little bit extra to avoid the possibility of paying a deductible in the event they damage the vehicle. So why don’t they let members make the same choice to buy better liability coverage?

“Never in 10 million drives has a single person had to come out of pocket” for a liability claim, said Rob Weisberg, Zipcar’s chief marketing officer. “Our coverage is two times our next-largest competitor, and our coverage is greater than most Americans have who insure their personally owned vehicles.”

That doesn’t make those Americans adequately covered. And the logic here strikes me as backward. Insurance is supposed to be for things that would be financially catastrophic. To sell protection against a three-figure fee while leaving members exposed to a seven-figure judgment doesn’t make much sense.

So if you’re a Zipcar member, as I am, now you know what the worst case looks like. Still feeling comfortable with the company’s coverage?

Article source: http://feeds.nytimes.com/click.phdo?i=6b76ae962589b8554cbac8c26d53db7b

Bucks: Tuesday Reading: Rental Car Firms Seek Special Recall Rules

April 05

Tuesday Reading: Rental Car Firms Seek Special Recall Rules

Increased e-mail scam risk, American flights return to Expedia, car rental firms’ push for different recall rules and other consumer news from The Times.

Article source: http://feeds.nytimes.com/click.phdo?i=58cd083cc8e095aef061c18370895251