Enterprise Rent-A-Car has long touted its “green” credentials, from being the first in its industry to issue a sustainability report to adding hybrid cars to its U.S. fleet. The company also promotes itself as a leading corporate citizen, most recently with its assistance in relief efforts after the devastating Louisiana floods. But the recent revelation that the self-described world’s largest car rental agency is now a paying member of the American Legislative Exchange Council (ALEC) threatens to damage the company’s reputation.
As first reported in the Guardian, the company’s ALEC membership caught the attention of the Center for Media and Democracy. The Madison, Wisconsin-based advocacy organization has been a leading critic of ALEC. The Center describes ALEC as a front for industry groups seeking to rewrite laws that undermine public policy, from the implementation of clean energy to more stringent regulations on pesticides. Earlier this year, an ALEC-inspired bill that prohibited cities in Wisconsin from banning plastic bags was passed into law by the state's legislature. Opponents of ALEC slammed the organization for sending legislators pre-drafted laws that, in the end, allow its clients to avoid regulations, taxes and any measures that would have an impact on their revenues.
The backlash against ALEC and its tactics have spooked some of the world’s largest companies, including energy giant BP, the automaker Ford Motor Co., online auctioneer eBay and CPG giant Johnson & Johnson to sever ties with the lobbying group.
Enterprise defended its engagement with ALEC over what it says are unfair car rental excise taxes, Sam Thielman wrote in the Guardian. Indeed, in an era in which citizens are loath to pass any tax increases, levies on visitors -- including hotel and car rental taxes -- are seen as an easy way to raise revenues for projects such as new sports stadia or providing salary raises for teachers. In 2014, for example, an Arizona judge ruled that a car rental tax was unconstitutional because those fees under that state’s constitution should have been used for road and highway maintenance, not a football stadium or hockey arena.
And Enterprise can certainly use that case as precedent to explain why car rental taxes are punishing to car rental companies and unfair to consumers. Unfortunately for Enterprise, its alignment with ALEC threatens to harm the relationships it has with many of its stakeholders. And considering that another company in the wider hospitality industry, Expedia, cut its ties to ALEC earlier this month, Enterprise finds itself standing alone. At a minimum, the optics are bad. At worst, Enterprise could lose trust and damage its brand. As the Daily Kos reported earlier this week, “It seems that Enterprise has become more concerned with local taxes and lost sight of its duty to be responsible stewards of the communities where it does business and its employees and customers live.”
In its aversion to paying local taxes, Enterprise’s membership could be helping ALEC fund other initiatives that go against the company's so-called values. And that is why the surprise and outrage at Enterprise’s decision has been loud and rapid.
Image credit: Paul Kimo McGregor/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's worked and lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.