ICYMI: Groundwork’s Owens Joins CBS Evening News to Break Down Hertz AI Pricing Scheme
ICYMI: Groundwork’s Owens Joins CBS Evening News to Break Down Hertz AI Pricing Scheme
“The problem is when these technologies are being used to overcharge customers”
In case you missed it, Groundwork Collaborative Executive Director Lindsay Owens was featured on CBS Evening News in a segment on how rental car company Hertz is using AI to squeeze consumers. In the segment, she discusses how consumers are pushing back on Hertz for using AI to scan cars for damage, slapping hundreds of dollars in administration and processing fees on top of alleged damage claims. Owens has sounded the alarm about the wave of high-tech pricing schemes across the travel industry, including airlines like Delta, rental car companies like Hertz, and hotels. Watch the CBS interview here.
“We have seen cases where customers have disputed the damage because they think it’s a shadow and not actually a dent or scratch or a mark…These technologies can absolutely be deployed for good. They can make things easier for consumers. The problem is when these technologies are being used to overcharge customers,” Owens said.
Following the segment, U.S. Senator Richard Blumenthal (D-CT) sent a letter to Hertz CEO Wayne “Gil” West, demanding information about Hertz’s use of AI, the excessive fees incurred by consumers, and whether Hertz plans to eventually phase out employee inspections with its scanners. Read the letter here.
BACKGROUND
- Car rental company Hertz and its subsidiaries (Dollar and Thrifty), Sixt, and Avis (Budget and Payless) increasingly rely on AI-driven technology to determine damage to rental cars, leading to surprise charges for damage that’s nearly imperceptible to the human eye:
- Hertz has implemented AI-powered damage detection technology at six major U.S. airports, with plans to expand. The system captures thousands of high-resolution images as vehicles pass through rental lot gates at pickup and return, with AI flagging any discrepancies.
- The AI system automatically generates damage reports, which are reviewed by a human only if a customer disputes the charge. Charges are attached to a series of hidden fees.
- For example, one customer was charged $80 for the damage and $115 in fees, including those incurred “as a result of processing” the damage claim and the “cost to detect and estimate the damage” that occurred during the rental.
- Another customer was charged $440 ($250 for the repair, $125 for processing, and another $65 administrative fee) for a 1-inch scuff on his rental’s wheel.
- The company incentivizes quick payment with discounts for those who pay immediately or within a short window—placing a heavier burden on lower-income customers who may not have cash readily available.
