Hertz's AI-Powered Car Scanners Spark Controversy and Congressional Inquiry

Nancy Mace Hitches Her Wagon to the Hertz AI-Scanner Controversy

Customers say the car rental company's scanners send huge bills for minor scuffs. Car rental giant Hertz is in the hot seat, after customers have come out of the woodwork to complain that the company's newly instituted AI scanners are charging them outrageous fees over minor issues. Now the system reportedly has the attention of one of Congress's most artificially intelligent members. The company recently rolled out the scanners as part of a partnership with Israeli firm UVeye, whose products were originally developed as a homeland security deviceâ€"designed to detect guns and bombs. Its executives ultimately decided to make money by scanning cars. UVeye's product is described as an "AI-driven inspection technology," and is designed to assess returned cars for damages. According to The New York Post, "dozens" of Hertz customers have complained about the company's AI scanners, with many claiming they're being sent huge bills for minor scuffs and scrapes. On Reddit, the scanners have also gotten a lot of hate. The Drive recently interviewed a Hertz customer who said he was charged $440 over a minor scuff on the tire's hub. When the customer attempted to reach a human, he says he was faced with a complicated, not altogether clear system for filing a complaint. The outlet writes, of the customer's ordeal: When he returned the car, he did so with a 1-inch scuff on the driver’s side rear wheel. Patrick says he was alerted to the damage “minutes†after dropping the VW off, and with it, charges for the blemish: $250 for the repair, $125 for processing, and another $65 administrative fee. That’s $440 all told, for curb rash on one wheel. Now, so much animosity has built up against the rental giant's automated system that congressional curiosity has settled on the company in the unlikely form of U.S. Rep. Nancy Mace (R-South Carolina). The Post writes that Mace, who is mostly known for her unhinged opinions about immigrants, liberals, and the LGBTQ community, sent a letter to Hertz CEO Gil West this week, asking for clarification about the company's use of AI. The exact contents of the letter aren't clear, although the Post writes the following of Mace's inquiry: Rep. Nancy Mace, who chairs the House Subcommittee on Cybersecurity, Information Technology and Government Innovation, asked Hertz CEO Gil West to provide her office with a “better understanding†of the company’s “experience as an early adopter of AI scanning technology,†according to the letter obtained by The Post. The South Carolina congresswoman questioned how the AI scanners “may impact†Hertz’s “work as a vendor to the Federal government.†Gizmodo reached out to Mace's office and Hertz for comment. In a statement previously shared with the Post, Hertz vaguely defended the new system: “The vast majority of rentals are incident-free. When damage does occur, our goal is to enhance the rental experience by bringing greater transparency, precision, and speed to the process.†Mace is clearly an imperfect vector to probe this issue. She recently bragged about securing infrastructure funding that she voted against in 2021, so don't expect much from the congresswoman. But now that Hertz's practices have received such high-level notice, maybe a lawmaker who is a serious person will step in and review the situation.

Behind the controversial AI tech used to inspect rental vehicles for damages

Emmy Award-winning journalist Kris Van Cleave is the senior transportation correspondent for CBS News based in Phoenix, Arizona, where he also serves as a national correspondent reporting for all CBS News broadcasts and platforms. 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. 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."

House panel eyes AI use in rental car damage assessments

A House Oversight panel is seeking information from a major car rental company about its use of artificial intelligence (AI) to inspect cars for damage. The Subcommittee on Cybersecurity, Information Technology, and Government Innovation recently requested a meeting with officials from Hertz to discuss the technology's use. "Some other car rental companies reportedly use AI as a tool but require human staff to review any damage flagged by the scanning system before billing customers; however, Hertz is apparently the only car rental company in the U.S. that issues damage assessments to customers without human review," Subcommittee Chair Nancy Mace (R-S.C.) wrote in a letter to Hertz CEO Gil West. Hertz's AI scanners, which the company has been rolling out in airports this year, assess automobiles as the exit and enter the location, then quickly charge the user based on AI-documented damage without an independent review from a human. Reports have spread since the scanning system began about questionable charges over damages detected by AI. MotorTrend reported in April that the scanners measure treadwear and can analyze a car's undercarriage, body and glass. The system is powered by Israeli tech company UVeye. Hertz didn't immediately respond to The Hill's request for comment.

Rep. Nancy Mace demands answers from Hertz over AI scanners charging...

A top Republican lawmaker on Wednesday fired off a letter to Hertz demanding answers over its artificial intelligence-powered scanners that bills car renters for minor scuffs and dents -- without them being given a chance to appeal the charges. Rep. Nancy Mace, who chairs the House Subcommittee on Cybersecurity, Information Technology and Government Innovation, asked Hertz CEO Gil West to provide her office with a "better understanding" of the company's "experience as an early adopter of AI scanning technology," according to the letter obtained by The Post. The South Carolina congresswoman questioned how the AI scanners "may impact" Hertz's "work as a vendor to the Federal government." Mace's letter gave Hertz until Aug. 27 to reply. The missive comes after dozens of Hertz customers complained about getting slapped with AI-generated bills ranging from $190 to $500 for minor dings and scratches -- with no human review and little chance to fight back. At the heart of the controversy is the UVeye system -- a set of AI-powered cameras that photograph cars before and after rental and then automatically spit out damage reports. Hertz has deployed the scanners at six airports and plans to expand them to additional locations nationwide. The company has bragged about the technology as a win for transparency and speed. Promotional materials say the system can inspect a vehicle in seconds, compare images, and generate clear reports for customers. "Through consistent, data-backed assessments and clear documentation, our customers can have complete confidence in the condition of our vehicles both pre- and post-rent," Hertz executive vice president Mike Moore said in a statement cited by lawmakers. Hertz says that "over 97% of vehicles scanned show no billable damage," which "reinforc[es] that the vast majority of rentals are incident-free." The system is designed to flag only chargeable issues, with thresholds in place so customers are not billed for ordinary wear and tear -- for example, a dent must exceed one inch before it is assessed, according to a company rep. A company spokesperson told The Post last month: "As we work to enhance our fleet safety, quality, and reliability for our customers, this new technology is aimed at proactively managing vehicle maintenance and enhancing vehicle inspections." The spokesperson added that whether damage is detected by AI or by human inspection, customers can dispute charges through the company's Customer Care team via email, phone, or in person at rental locations. Those using digital vehicle inspections also have access to a dedicated chat function that ensures consistent answers to common questions. If a customer disputes a charge through that channel, live agents review the flagged images and communicate their decision through the AI system. "By automatically scanning vehicles at both pickup and return customers get a more streamlined rental experience, 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 Hertz rep said.