Avis Bandwidth Rental

March 3, 2006 on 4:05 pm | In Business, Insider View, Musings by Josh Jones |

Sweet!

It’s just too cold here in L.A.

Which is why I just got back from vacation in Hawaii.

The weather was nice (though wet), and ironically, I drove more in a week in Hawaii than I do in an average month here in L.A.

And, every rental car place we used always had three “options” for paying for gas.

#1. Pre pay for a tank. Pay only $2.19 / gallon and bring it back empty!

#2. You fill it up. Bring your tank back full (Average gas price on the island: $2.89).

#3. Pay us to fill it up. When you return, pay $5.09 / gallon for any used gas.

There were three things that struck me about this.

Firstly, #2 and #3 are the same frickin thing! All they really need to say is “Bring it back full or pay us $5.09 / gallon, fool.”

Secondly, do ALL rental car companies really need to bend their customers over so bad? It’d be nice if they all just had one option: “Bring it back full or pay us $2.89 / gallon.”

Finally, and this is the big one, you only save money with option one if you bring the tank back less than 1/4 full.

Because otherwise you’ve paid more than $2.89 / gallon for the 75% of the tank you used. And considering that they put the value of themselves filling a tank up about $2.20/gallon (they charge $5.09 for it), they must make a profit of about $2.20/gallon for every tank they have to fill up under option one. Which implies the average person who chooses option one comes back with a tank only 43% empty… and are effectively paying $5.09 per gallon anyway! SUCKERS!

Of course, if YOU know you’ll definitely come back with less than a quarter tank (or you don’t like the hassle of filling up your tank before returning to the airport) option one is fine for you.

That poo was cold!

DreamHost likes option one!

You see, upstream providers are a lot like rental car companies. (Don’t get the insurance!)

Right now, we’ve got an offer on the table to pay $26/mbps a month for an unmetered gigabit line (i.e. “pre-filling the tank”) or $37/mbps a month for actual usage.

For the $26,000/month option to make sense, we’ve obviously got to be able to average over 700mbps on the gigabit line. Which wouldn’t be too hard.. except for the fact things start to get grungey if you start pushing above 850mbps.

Lucky us, right now we’ve got almost exactly 1.7 gbps in over-commit (that is, we’re doing 1.7gbps more than the minimum amount we pay for no matter what) with our current providers. So the plan is to take 2 full gig lines from the new provider, and immediately put 850mbps on each of them!

Option one it is!

But when it comes to Avis, I’m an option two guy till I die!

12 Comments

  1. 1

    …which reminds me of the Dreamhost rewards thing? You can choose between (1) 97 bucks! or (2) 10% of your referral’s payments forever!

    But who would possibly choose (2)? If a referral is paying $10/mo, that means you’d be making $1/mo… so it would take 97 months to make as much as the 1-shot $97 payback.

    Comment by gse — March 3, 2006 #

  2. 2

    Right now, we’ve got an offer on the table to pay $26/mbps a month for an unmetered gigabit line (i.e. “pre-filling the tank”) or $37/mbps a month for actual usage.

    Shouldn’t the second rate be in a different unit? Is it per transfer? Or is it per average usage… or X percentile usage?

    Comment by John Bachir — March 3, 2006 #

  3. 3

    To reply to John Bachir in a totally uncool way, they take your average metered usage for the month, more or less, and charge you at that rate. So if for 95% of the month you sit at right around 50mbps utilization on your line, they multiply 50*37 and bill you that, or you buy the whole thing up front for 26k/month.

    Last time I rented a car I did option 2, though I wish I had done option 1, thats the gamble though. Coming back I am honestly shocked it did not stall out going into the gas station to fill it up before returning it. Option 2 4 LIFE! (And the refill price was like $6.75/gal!) Like with anything on a car, optional things are 99% profit. ;-)

    Comment by Kelly — March 3, 2006 #

  4. 4

    DH use only one provider ?
    What if this one fail ?

    Is there redundancy ?

    Comment by David:moua — March 4, 2006 #

  5. 5

    I just hope they are a quality provider you are going with… not the cheapest low quality bandwidth around (Cogent anyone?)

    Having said that, any problems I have are not due to bandwidth quality, rather to living 5350 miles from the data centre! (ping times are 175ms on a good day, 200ms+ on a bad day)

    A European data centre with the same prices would be much appreciated ;)

    Comment by Peter — March 5, 2006 #

  6. 6

    Specially when you travel with babies… you really don’t have time to make the “value offer maximizer point”. We’re happy to be in a hosting site that have real people behind. You drive…

    Comment by Javier Albarracín — March 5, 2006 #

  7. 7

    Peter,

    Their upstream providers are Level 3 Communications and Global Crossing. My current understanding is they have two gig uplinks for each provider.

    Comment by Will — March 5, 2006 #

  8. 8

    That is correct Will, and the new provider will be Internap.

    Comment by Josh Jones — March 6, 2006 #

  9. 9

    Oh goodie! Expensive Internap bandwidth :D

    Comment by Will — March 6, 2006 #

  10. 10

    Dude, you should have rented a biodiesel mobile in Hawaii!

    Comment by Eric — March 6, 2006 #

  11. 11

    I used to work for a hire car company. The reason that you are charged extra for returning a less-than-full tank is to discourage you from doing it.

    Think about it: the rental company makes more money when someone is using the car. Every day, every hour and every minute when the car is not on rental is a dead loss to the firm.

    So if you can get a car back, clean it and turn it out in an hour, you’ll make more money in the busy season than otherwise possible.

    When someone brings back a car with less than full fuel, the car has to be refueled. This means that someone, somewhere, has to drop what they’re doing to refuel the car. This could be front counter staff, it could be the detailers. It doesn’t matter, because the upshot is that A, that car may turn up late and piss off some other customer, and B, work on all other customers & cars is slowed down, possibly pissing off multiple customers.

    So it’s really about getting you to help out the next customer. It’s also exactly why car companies charge like wounded bulls when you return the vehicle late.

    Comment by Jacques Chester — March 12, 2006 #

  12. 12

    Hey,

    Here in the UK (and the rest of Europe I think) when you rent a car you own all the petrol in the tank. When you leave the kiosk at the rental place they tell you to bring it back _empty_ because you own the petrol inside. This is even Avis’ policy over here too.

    I don’t get what the Jaques Chester guy is saying, all of the rental places over here have their own petrol-filling-up facilties so they don’t have to take the car anywhere. Furthermore, all European rental cars have to be safety checked each time they are returned and most rental companies also valet them - so it isn’t the simple case of the car being returned then instantly rented out again.

    Also, I agree with Peter - we definitely need a Europe datacentre! From my house, a ping to Dreamhost is about 1070ms.

    Comment by Hamish Robertson — June 2, 2006 #

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