Birmingham, Alabama — The owner of a car rental business that charges a flat fee of $15 per hour and does not offer an auto insurance policy is raising the price of cars on the city’s streets.
The Birmingham-based rental car company, Rent A Car, said Thursday that the rate hikes were being made because of a $3.2 billion tax increase passed in 2017.
The increase was passed in part to pay for roads projects that the state legislature approved in February.
The company said that in January, it received a request from a landlord to increase its rates from $15.30 to $16.50 per hour.
The company said it also received requests from owners who did not want to be identified for fear of retaliation.
The city council approved the tax increase and passed it in May, saying it was needed to pay down the city debt and fund a series of projects.
The tax increase was supposed to begin in 2019, but that date was pushed back until 2027.
The city council also approved a tax increase on April 1.
The tax increase will add $3,500 to rent in 2017, but the city will keep the $15 hourly rate.
Rent A Cars is asking that the $5 increase be placed on the rental company’s bill, but no other changes have been made to the rental car rental industry in the past.
Rent A Cars was founded in 1991 by James A. Johnson and his wife, Carol.
The couple sold the business in 2004.
In the past, the company has offered car rental services in Birmingham, and it had an extensive presence in the city.