A simple equation instantly predicts when a hybrid rental car is cheaper than a compact or economy rental car, and could be used to reduce the costs of official government travel.
When a rental car is used for a short distance over many days and gas prices are low, a compact or economy car is generally cheaper. When traveling many miles over a short period and gas prices are high, the hybrid is cheapest.
But travelers requesting a rental car in the automated Defense Travel System (DTS) are always offered a list of compact or economy cars to choose from – even when a hybrid would have been cheaper for the government.
DTS could modify its software to instantly predict the cases where a hybrid would be cheaper, and then instantly offer the traveler a list of hybrids available for rent.
The formula is: Total Cost = Rental Contract + (Estimated Rental Miles to be Driven / Average Car Class MPG) * Current Local Gas Price
Inputs can be completely automated using data from www.fueleconomy.gov, www.gasbuddy.com, and www.mapquest.com.
In FY06 DoD travelers rented 1.7 million cars for official duty travel, at an estimated cost of $510 million, excluding the cost of gas.
Assuming a hybrid is cheaper only 5% of the time, and in only those cases saves 5% per rental, then this innovation would save DoD about $1.5 million in the first year. Applied to multiple agencies the savings would be higher. Future year savings would increase as gas prices go up and hybrid costs go down.