As millions of Americans get ready to hit the road for Labor Day weekend, some rental car companies are deploying artificial intelligence scanners to look for damage — and it may lead to more consumers getting dinged.
The new technology that spots damage to rental vehicles has sparked concerns among lawmakers after some customers complained about surprise repair costs and added fees.
Adam Foley and his wife said they rented a car from Hertz during a family trip to Atlanta this summer. When they returned home to San Antonio, Foley said he started getting automated messages from the rental company. The messages claimed damages were found on the rental vehicle, saying he owed $80 for two small dents and another $190 for a processing fee.
“So a total of $350 for pretty negligible events that I didn’t even detect,” Foley told CBS News. He raised his concerns last month in a LinkedIn post. “I think as a consumer it feels pretty extortive.”
The damages were identified by AI-powered photo booths that snap thousands of high-resolution images of the vehicles before and after rentals. UVeye, a New Jersey-based software company, provided technology.
An AI-powered photo booth takes images of Hertz vehicles before and after rentals. / Credit: CBS News
Hertz says it is currently using the system at 10 U.S. airports, with plans to roll it out nationwide, but added that the company is still continuing to refine the process.
In a statement to CBS News, the company said the old process of manually inspecting cars “caused confusion and frustration” because it was “subjective and inconsistent.”
“With digital vehicle inspections, we’re introducing much-needed precision, objectivity, and transparency to the process — giving our customers greater confidence that they won’t be charged for damage that didn’t occur during their rental, and a more efficient resolution process when damage does occur,” the statement reads.
Hertz also said it has waived Foley’s damage costs, telling CBS News: “We strive to get it right for every customer – and when we fall short, we work to make it right.”
Democratic Sen. Richard Blumenthal of Connecticut on Tuesday demanded answers from the CEO of Hertz on how the technology is being used, including an explanation on how the fees are reasonable and fair to charge consumers, according to a letter obtained by CBS News.
Republican Rep. Nancy Mace of South Carolina, chair of the Subcommittee on Cybersecurity, Information Technology, and Government Innovation, also sent a similar letter to Hertz last week.
“We’ve seen cases where customers have disputed the damage because they think it’s a shadow and not actually a dent or a scratch or a mark,” said Lindsay Owens, a Washington, D.C.-based consumer advocate.
Owens told CBS News that such technology can be used for good and can make things easier for consumers. “I think the problem is when these technologies are being used to overcharge customers,” she added.
Hertz declined to be interviewed but said the UVeye system offers precision and objectivity, giving its customers “greater confidence that they won’t be charged for damage that didn’t occur during their rental.”
UVeye said its inspection systems are currently inspecting millions of vehicles every month at dealerships, service centers and car rental locations.
Sixt confirmed to CBS News it is using the technology at select locations. Avis looked at AI in 2019 but their damage assessment process remains “human-led,” the company said. Enterprise Mobility said they did not use the technology at their rental locations.
The UVeye scanners are “being calibrated to detect different levels of damage based on the client,” the software company told CBS News in a statement. “UVeye technology reduces the need for manual walkarounds, increases vehicle safety, and ensures a reliable, objective record of vehicle condition. The goal is to surface issues early, reduce confusion, and give customers greater confidence in the process.”
Of the over 675,000 rentals scanned so far at Hertz, the rental company says more than 97% showed no billable damage.
A CBS News crew rented a vehicle from Hertz at Phoenix Sky Harbor Airport recently, and the company did not proactively notify us that the AI system was in use. When asked about it at the counter, we were not able to view the “before” images of the car — and we did not receive a bill for any damage.
As for Foley, whose job is to advise companies on using AI technology, he said he “probably would have picked somewhere else” had he known about it.
“I don’t want to have to worry about driving behind a truck that kicks up a rock,” Foley said.
Foley added that he’s relieved to get his money back.
“I think that without national news coverage the charges would still be standing today,” he said. “It shouldn’t take the amount of publicity I received following my post to be treated like a valued customer.”
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