Car rental company Hertz has begun using AI scanners to check vehicles upon return for damage and in the case of at least one renter, the technology may have gone too far.
One renter who returned his Thrifty rental vehicle, which is part of the Hertz Corporation, to the Hartsfield-Jackson Atlanta International Airport was charged $440 for a 1-inch scuff discovered on a tire by the AI scanner, according to a report by The Drive.
The renter received a message on the Hertz app within minutes of returning his vehicle, but was unable to speak to a human about the charges.
How is Hertz using AI?
In April, Hertz said it would be “transforming its vehicle maintenance process” by partnering with UVeye, to introduce advanced AI inspection to its U.S. operations.
In a press release at the time, Hertz said by implementing the advanced AI-driven inspection technology, “Hertz can significantly enhance the frequency, accuracy, and efficiency of its vehicle maintenance processes, ensuring reliable service, improved vehicle availability and transparency for its customers.”
The AI-powered camera systems and machine learning algorithms enable real-time, automated inspections of a vehicle’s body, glass, tires and undercarriage, the company said.
Hertz said it was starting its rollout at the Atlanta airport and expanding to major U.S. airports by the end of the year.
What happened with the $440 charge to the renter?
The renter contacted The Drive to relay his experience with the new AI scanner. He was alerted to damage for a 1-inch scuff on the driver’s side rear wheel. The bill? $250 for repair, $125 for processing and a $65 administrative fee, all totaling $440. The renter could pay right away, or get a $52 discount if paid within two days or $32.50 discount if paid within a week.
But since he couldn’t get past the chatbot system and was not aware he could flag the claim to request a human agent review it, he reached out through the “contact us” link and had to wait 10 days for a response. He told The Drive’s Adam Ismail that he was not planning on paying the bill within the seven days to get the discount.
In a follow-up email, Ismail told USA TODAY that he had not heard any update from the renter.
In a statement to USA TODAY, a Hertz spokesperson said “Over 97% of cars scanned with this technology show no billable damage, proving that the vast majority of rentals are incident-free. Vehicle damage has long been a common pain point across the car rental industry for customers and companies alike. At Hertz, we’re using this technology to tackle this head-on.”
The goal, the company spokesperson said, is to ensure customers are not charged for damage they didn’t incur, “while bringing greater transparency, precision, and speed to the process when new damage is detected. As we continue rolling out this technology, we remain committed to ongoing innovation and continuous improvement.”
When a customer flags an issue in the dedicated chat, live agents review the flagged damage issues and their determination is communicated via the AI agent, the spokesperson said. The company is also working on integrating live agents into the app.
“With regards to this specific incident, a live agent reviewed this customer’s escalation and manually reviewed the photos at pickup and return and confirmed the damage was new,” the spokesperson said. “While we understand that some customers may hope for a different outcome, we want to ensure every case is handled fairly and objectively, using the best information available.”
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Professor: Hertz’s AI technology parameters may need to be reconfigured
There can and should be advantages to a business using AI, such as not engaging humans and human time to evaluate a problem, said Ramnath Chellappa, professor of information systems and operations management at Emory University’s Goizueta Business School. Among Chellappa’s areas of expertise is AI.
But in this case with Hertz, Chellappa said he found it quite odd and defeating the purpose if it increased the cost to a consumer.
Given that often rental companies will have a rule of thumb for when damage or a scratch is considered significant enough for a charge, Chellappa said it seems the parameters of the AI used by Hertz may need to be adjusted.
“I don’t think the problem here is the technology…I think the problem is in the policy they’re implementing,” Chellappa said told USA TODAY.
“Sometimes we have a tendency to kind of use technologies and blame all the necessary outcomes on it,” said Chellappa. “But this is clearly a case of whether the firm in question has the right policy in terms of what it is going to do with the results from the AI rather than the AI itself.”
Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
This article originally appeared on USA TODAY: Hertz’s AI scanner flagged a tiny scuff. The renter got a $440 bill.
