Thrifty Car Rental 2010 Annual Report Download - page 26

in our domestic vehicle rental operations are regulated under state laws governing the licensing of
such products. Any changes in U.S. or foreign law that change our operating requirements with
respect to optional insurance products could increase our costs of compliance or make it
uneconomical to offer such products, which would lead to a reduction in revenue. As a result of any
changes in these laws or otherwise, if customers decline to purchase supplemental liability insurance
products through us, our results of operations could be materially adversely affected.
The U.S. Congress and other legislative and regulatory authorities in the U.S. and
internationally have considered, and will likely continue to consider, numerous measures related to
climate change and greenhouse gas emissions. Should rules establishing limitations on greenhouse
gas emissions or rules imposing fees on entities deemed to be responsible for greenhouse gas
emissions become effective, demand for car rental services could be affected, or our vehicle costs
and/or other costs could increase and our business could be adversely affected.
Laws in many jurisdictions limit the types of information that may be collected about
individuals with whom we transact business, as well as how we collect, retain and use the
information that we are permitted to collect. The regulations applicable to privacy and data security
are rapidly evolving, and additional regulations in those areas, some of which is difficult for us to
accommodate, are often proposed and occasionally adopted. Privacy and data security regulations
could have an adverse effect on our business through hindering our transaction processing activities
and/or through the resulting cost of complying with such regulations. Additionally, it is possible that
we could face significant liability for failing to comply with such requirements or new requirements as
they are adopted.
We are subject to Payment Card Industry (“PCI”) data security standards, which require
periodic audits by independent third parties to assess compliance. PCI data security standards are a
comprehensive set of requirements for enhancing payment account data security that was
developed by the PCI Security Standards Council comprised of the major credit card companies to
help facilitate the broad adoption of consistent data security measures. Failure to comply with the
security requirements as identified in subsequent audits or rectify a security issue may result in fines.
Although unlikely, restrictions on accepting payment cards may be imposed on companies that are
not compliant and fail to timely remediate this non-compliance. While we have not been subject to
any fines or limitations on our ability to accept payment cards, there is no assurance that we will not
incur fines or such limitations in the future.
Low Cost Structure
Our low cost structure has historically been one of our primary competitive advantages, as it
has allowed us to offer low cost vehicle rentals and drive rental transactions to our brands. Our
inability to maintain our low cost structure could have an adverse affect on our results of operations
and cash flows. In an effort to maintain control on operating expenses, we have implemented cost
reduction initiatives. These initiatives include, among other things, headcount reductions, business
process re-engineering and internal reorganizations. We cannot provide assurance that we will be
able to continue to implement cost reduction initiatives to offset increasing fixed costs or, that we can
do so without adversely affecting customer service levels and employee morale, which could in turn
adversely affect our results of operations and prospects.
Manufacturer Safety Recalls
Our vehicles may be subject to safety recalls by their manufacturers. Under certain
circumstances, the recalls may cause us to attempt to retrieve cars from customers and cause us to
decide not to re-rent vehicles until we can arrange for the repairs described in the recalls to be
completed. We could face liability claims if recalls affect vehicles that we have already sold. If a
large number of vehicles are subject to simultaneous recalls, or if needed replacement parts are not
available, we may not be able to re-rent recalled vehicles for a significant period of time. These
types of disruptions could jeopardize our ability to satisfy demand for our vehicles, or could result in
the loss of business to our competitors. Depending on the severity of any manufacturer recall, it
could have a material and adverse effect on our operations and cash flows.
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