Put investment bankers in a room with ex-Microsoft employees and chances are that technology and money may make a marriage.
In the case of Rent-a-Toll, pitting a data-driven technology solution up against an age-old problem for rental car companies -- customers who buzz through automated toll lanes without paying -- has been enough for one major rental car company, Dollar Thrifty, to divorce itself from dependence on labor-intensive adjustments to customers' bills.
Rick Welch, CEO of Rent-a-Toll, said the company, which was founded by Microsoft alumni and a team of investment players, was looking to expand in the marketplace after developing a partnership with Dollar Thrifty that offers consumers a daily or weekly add-on to their rental agreement to cover any tolls the customer incurs.
Tolls are recorded automatically on a customer's bill but are paid for upfront.
Rent-a-Toll has operations in Florida, Texas and Colorado and is looking to expand by the end of the year.
Worry-free toll collection
"When consumers buy the prepaid package with the rental, they don't have to worry about having to dig in their pockets for change for tolls or about stopping and waiting in line at toll booths," Welch said. "They just drive through the automated lanes, and the record goes automatically to Rent-a-Toll."
Part of what sets Rent-a-Toll apart is that there does not need to be a transponder attached to a rental vehicle to make the system work, though in some jurisdictions where the company is seeking expansion, like New York, a transponder might be an option.
Instead, the company has put together a system for accessing license plate photographs taken by tolling authorities in the states where they do business.
With consumers paying a little under $6 a day for the service, the company's database automatically records any rental-car plate in its inventory that passes through a participating tolling authority.
That makes it easier for rental car companies because they don't need to have inventory with a transponder attached available at all times. The system works with any car in the fleet without adding equipment.
"Customers who run the wheels off a car may actually pay less with the prepaid package than they would if they paid for the tolls," Welch said.
But he said the service was primarily designed to give rental car companies a way to build a revenue stream while undercutting costs for toll violations by customers that they often can get stuck paying.
The company started testing its license-plate recognition interface with tolling authorities in late 2006. It has been working primarily with Dollar Thrifty and Sunshine car rental companies so far.
Some car rental companies use a different system that employs a transponder that records toll charges, which are added to a customer's bill later.
"I think what we have is both a customer service tool and a way to create a revenue steam for car rental companies with the add-ons that are now popular, like the GPS," Welch said. "It's not just a cost savings for customers, but a time-saver as well, since it allows out-of-town drivers to tool around the toll roads like locals."
Toll roads, he noted, are increasing as governments look to tolls and creation of tolling authorities to fund highway building. Toll roads account for about 10% of new highways built each year, Welch said.