Rental Car AI Scanners Spark Customer Backlash

As millions of travelers prepare for road trips, a new technological development in the rental car industry is causing a stir. Some rental companies are now using artificial intelligence scanners to inspect vehicles for damage, but the rollout has led to customer complaints about unexpected fees and raised questions about fairness.

A Customer's Costly Surprise

The potential pitfalls of this new system were highlighted by the experience of Adam Foley. After a family trip to Atlanta where he rented a car from Hertz, Foley was surprised to receive automated messages from the company upon his return home. The messages alleged that damages were found on the vehicle, and he was billed $350—$80 for two minor dents and a steep $190 processing fee.

"So a total of $350 for pretty negligible events that I didn't even detect," Foley told CBS News, later describing the feeling as "pretty extortive" in a LinkedIn post.

The Technology Behind the Scrutiny

The damages on Foley's car were identified by AI-powered photo booths that capture thousands of high-resolution images of vehicles as they enter and leave the rental lot. This technology is provided by UVeye, a New Jersey-based software company.

Hertz is currently using this system at 10 U.S. airports and has plans for a nationwide rollout, though it says the process is still being refined.

Hertz Defends Its Digital Inspection Process

In a statement to CBS News, Hertz argued that the old manual inspection process "caused confusion and frustration" because it was "subjective and inconsistent." The company positions the new digital inspections as a move toward greater transparency and objectivity.

"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," the statement read. Hertz also noted that of the over 675,000 rentals scanned so far, more than 97% showed no new billable damage.

The company ultimately waived Foley's charges, stating, "We strive to get it right for every customer - and when we fall short, we work to make it right."

Lawmakers and Advocates Raise Concerns

The new technology has attracted the attention of lawmakers. Sen. Richard Blumenthal (D-CT) has formally demanded answers from Hertz's CEO about how the technology is used and how the associated fees are determined to be fair. Rep. Nancy Mace (R-SC) sent a similar letter.

Consumer advocates are also wary. "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 consumer advocate in Washington, D.C. She acknowledged that technology can be beneficial but warned, "the problem is when these technologies are being used to overcharge customers."

The Broader Industry Adoption

The use of AI inspection technology is not yet universal. Sixt confirmed to CBS News that it uses the technology at some locations, while Avis stated its damage assessment process remains "human-led." Enterprise Mobility said they do not use the technology at their rental locations.

UVeye, the software provider, stated that its systems are "being calibrated to detect different levels of damage based on the client" and that the goal is to "reduce confusion and give customers greater confidence."

The Question of Transparency and Fairness

Despite these assurances, questions of transparency remain. When a CBS News crew rented a car from a Hertz location using the system, they were not proactively informed about the AI inspection. Furthermore, they were unable to view the "before" images of their vehicle.

For Adam Foley, who advises companies on AI technology, the experience was unsettling. He noted he "probably would have picked somewhere else" if he had known about the scanning process beforehand.

While relieved to have his money refunded, Foley believes the outcome was due to the public attention his story received. "It shouldn't take the amount of publicity I received following my post to be treated like a valued customer," he said.