U-Haul accused of attempting price-fixing with Budget

U-Haul accused of trying to fix pricesU-Haul, the biggest retail rental truck company in the country, was accused by the Federal Trade Commission of trying to get is biggest rival -- Budget -- to collude on prices, which could have driven up costs to consumers.

The two companies together have more than 70% of the self-moving truck rental business, the FTC said. U-Haul signed an agreement, settling the allegations, that it would not discuss setting prices with its competition.

"It's a bedrock principle that you can't conspire with your competitors to fix prices – and shouldn't even try," FTC Chairman Jon Leibowitz said in a written statement. "Consumers deserve better. The order announced today will ensure that U-Haul will not try it again."

A statement sent to Consumer Ally by U-Haul parent company AMERCO was unapologetic and did not either challenge or admit any of the allegations made by the FTC.

"The commission has not alleged that the company entered into an agreement with Budget or any other competitors in violation of Section 1," AMERCO Investor Relations Director Jennifer Flachman wrote. "The complaint does not allege that U-Haul and Budget reached an agreement. The proposed consent order has been entered into for settlement purposes only and does not constitute an admission by Respondents that it violated the law or that the facts alleged in the complaint are true."

Between 2006 and 2008, the FTC's complaint says, U-Haul tried to hike the cost of one-way truck rentals in conversations with Budget. FTC spokesman Mitch Katz told Consumer Ally that no penalty was lodged against U-Haul because no deal was ever consummated that cost consumers money.

The FTC quoted a memo sent by U-Haul CEO Edward J. Shoen that noted competition from Budget was driving down U-Haul's prices.

"Budget continues in some markets to undercut us on One-Way rates," the memo said. "Either get below them or go up to a fair rate. Whatever you do, LET BUDGET KNOW. Contact a large Budget Dealer and tell them. Contact their company store and let the manager know."

Shoen also urged U-Haul dealers to talk to dealers at two rivals -- Budget and Penske – to let them know U-Haul was raising its rates and that they should, too.
AMERCO agreed to a 20-year order that includes monitoring to ensure the company has stopped trying to collude with competitors.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum