Amid the tourist crowds associated with Hawaii’s spring break, rental car prices have skyrocketed to as much as $1,000 due to a shortage of inventory in suppliers’ fleets. The issue has now caught the attention of government agencies who are extremely concerned about the current cost of renting a car and question the validity of such a sudden and drastic increase in rates, even from a legal standpoint.

I don’t want to judge anyone or any company, but I think it really deserves our attention. We will investigate the basis on which such high amounts are charged for car rentals, said Steven Levins, executive director of the Hawaii Department of Commerce and Consumer Affairs.


Current trend

When the COVID-19 pandemic broke out in the early 2020s and air traffic came to a virtual standstill, many car rental companies, which had run into trouble due to falling demand, sold most of their fleets in an attempt to recoup the capital invested. Today, with the sudden and dramatic increase in mainland visitors, the supply of available vehicles is simply too small to meet demand. Nevertheless, officials plan to investigate the ethics of such an astronomical rent increase.

For whatever reason, demand has driven up prices, but I want to reiterate that supply and demand are not everything and do not make everything. When we analyze this issue, the fact that supply has declined does not necessarily mean that the company is justified in raising costs, Levins said.

Local news agency KHON2 discovered that some particularly opportunistic islanders are even buying vehicles to rent out to tourists. Reporters spoke with Amy Weed and Jeremy Jones, who both rent out their cars through a peer-to-peer car sharing platform called Turo. They said they had recently seen the new owners come in.

Jones, owner of Honolulu-based WeedriveTesla, said: In the last week and a half alone, I have seen several new or existing owners expand their fleets.

If there are no rental cars, the other means of ground transportation available are of course taxis. Howard Higa, president of Oahu’s largest taxi company, TheCAB, said: Our business has doubled, tripled, and that’s a good thing. But the point is, if you can’t sustain it, it’s pointless. He stated: Often we have 20, 30 or 40 customers waiting for us, and even that we can’t handle with our shipments. We can’t even handle the drivers. We don’t have many drivers.

So it seems that even the taxis don’t have enough supply to satisfy all those tourists, but you won’t see taxi prices going up just because demand is high. Mr. Higa noted that taxi fares are regulated by the City Council and believes that other transportation services should also be subject to fare caps and pricing requirements. I think there has to be a limit, Higa said. All taxi companies are regulated, and we struggle with that. We haven’t had a price increase in over 10 years.

Levins said anyone concerned about the rental car rate increase can file a complaint with his office.

We have a very strict law in Hawaii that imposes fines of $500 to $10,000 per violation for unfair and deceptive business practices, Levins says. So there are very serious consequences for anyone who breaks our laws.

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