US agency fines Zipcar for uncompleted recall rentals

By David Shepardson

WASHINGTON (Reuters) – U.S. auto safety regulators said on Monday car-sharing firm Zipcar has agreed to pay a $150,000 fine after a government investigation found it allowed customers to rent vehicles with uncompleted recalls.

Zipcar could be forced to pay another $150,000 if it does not comply with terms of the settlement with the National Highway Traffic Safety Administration (NHTSA) following a government investigation of over five years.

A 2015 law requires rental car companies with 35 or more vehicles to complete recall repairs before renting vehicles.

The agency is requiring Zipcar, a unit of Avis Budget (NASDAQ:) Group since 2013, to submit an audit report of all Zipcar vehicles with uncompleted recall repairs at any time within 150 calendar days after the effective date of the settlement.

On Monday, Zipcar said the settlement stems from a 2017 recall in which less than 50 of 12,000 vehicles of its global fleet were found in violation.

Zipcar added the recall “was a unique mileage-based recall that did not require the immediate grounding of the vehicles” and added the vehicles are no longer in its fleet.

“Vehicles with open, unrepaired recalls pose a safety risk to everyone on the road,” said Ann Carlson, NHTSA’s acting administrator. “The agency will continue to use the full scope of its enforcement authorities to protect the public from safety defects in their personal vehicles or in a vehicle they rent.”

The settlement agreement lasts one year and may be extended an additional year at NHTSA’s discretion. NHTSA said that since it opened its probe, Zipcar, which has about 1 million members, has improved its recall policies and procedures, including implementing a centralized, real-time automated documentation system for recalled vehicles.

In December, NHTSA said it was investigating whether Hertz had rented unrepaired recalled vehicles to customers.

Hertz, which operates the Hertz, Dollar and Thrifty vehicle rental brands, said in December it was “committed to providing safe rentals for our customers.”