Affordable Car Hire has been rocked by a $2.2m lawsuit filed against it by Avis Budget. Co-founder Angela Day told Lee Hayhurst she is determined to fight for the broker’s future
The failure of B2C car hire broker Atlas Choice in mid-December last year went more or less unnoticed in the trade, although it is estimated to have left suppliers £18 million out of pocket.
However, Angela Day, co-founder and chief executive of B2B broker Affordable Car Hire, believes it so rocked car rental firms that it played a significant factor in Avis Budget’s decision to sue it for $2.2 million.
Lawsuit shock
Speaking after lodging a $15 million counterclaim against Avis Budget (Travel Weekly, April 27), Day said she was shocked when the litigation came through in January.
Court papers set out how Affordable had been involved in a long-running dispute over rates invoiced by Avis Budget. The US-based car rental giant initiated the legal case, claiming Affordable had failed to pay it since August.
Day said talks had been taking place with Avis until things suddenly went quiet in December.
“The impact of [the] Atlas Choice [failure] across the car rental sector unnerved people,” she said.
“We’d heard feedback that Atlas Choice had burnt holes in many car rental companies, which was a real shame because it put brokers in such a poor light.”
“When you’ve slogged your guts out to build a business for 12 years you don’t let go lightly”
The arrival in the post of court papers without warning could not have come at a worse time personally for Day, who was due to undergo surgery that same week.
She said it “felt a bit like Armageddon” for her and co‑director and husband James Moore. “We were shocked it had come to this. This was the last thing we wanted,” she said.
What made matters worse was the anyonymous sending of copies of the court papers to all of Affordable’s suppliers and trade partners. Travel Weekly also received a copy in the post.
Day would not reveal who she thinks sent them and there’s absolutely no suggestion Avis Budget was involved. Anyone can download the court papers online.
Day was meant to be recuperating from surgery but she spent the following week phoning suppliers, agents and affiliates to reassure them.
The support and positive reaction from many of the agents Affordable works with was one bright spot in a dark period for Day.
“People were saying ‘I’m sure there’s more to this than meets the eye, and we’re sorry it’s gone public, but as long as bookings are safe we enjoy working with you’, which was wonderful.”
Accounts lost
Affordable lost two trade accounts – Barrhead Travel and Midcounties Co-operative – due to the impact on supplier insurance, but Day said trading had recovered to be on a par with last year.
“I was touched by the fact that we retained so many of our clients. But I understand everyone has to do what’s right for their business,” said Day.
Since the litigation went public, Affordable has had to reduce headcount from 35 employees to 24, but Day said she had never doubted the company would survive.
“Our car rental partners have been fantastic, so supportive. Because the company is 12 years old, it has good trading history, which stood us in good stead.”
Brokers’ value
Day believes the value a broker like Affordable offers in generating trade sales and supporting agents can be underestimated by suppliers, which think they can take the business direct.
“We always have to justify our position as the middleman, but travel agents need to be looked after and trained; they have a lot to deal with and so many other products to sell.
“They need as much nurturing and assistance as possible, especially when selling an ancillary product. It’s one of the hardest jobs being a broker because you are trying to please everyone.”
And with what now looks likely to be a lengthy legal process in lawyers’ hands, Day is relieved to be able to get back to running her business.
“When you have slogged your guts out to establish a business for 12 solid years, you don’t let that go lightly,” she said.