Car Rental: When Customers Want Green, Charge More

(MoneyWatch)  More and more car rental customers want greener and more fuel-efficient alternatives and most of the country's largest rental companies are obliging and asking customers to cough up more green for the privilege. The weird part -- customers are eagerly opening their wallets.
At San Francisco International Airport, the air hub for what is arguably one of the most green-conscious cities in the country, rental companies offer hybrids as well as a selection of compact cars. Dollar Thrifty charges 20 percent more for Toyota Priuses than for any other economy or compact car. Other rental companies like Hertz have a green fee of $5 a day for smaller cars. Most companies find they can charge more because the majority of customers don't want SUVs or other large vehicles that suck down expensive gas.

In fact, some of the companies are shifting their fleet mix to adapt. Hertz said in August that it will be focusing on smaller, more fuel-efficient cars for its 2009 fleet. But few rental companies go as far as Enterprise Rent-A-Car.

The closely held company, owned by the Taylor family, has a Web site that details its $1.25 carbon offsets and how the company is promising to plant 50 million trees. Enterprise also designated its first "Green Branch" in California near the state capitol (the first few were in Atlanta) where customers can choose hybrids or fuel-efficient cars. Seventy percent will average 28 MPG or better.

Despite the rise of green prices, broader economic factors are still taking a toll. Dollar Thrifty reported that its third-quarter earnings will take a hit due to declining travel dollars and vehicle depreciation. The company also hopes to secure more credit for operations.