Hertz tries tech again; what could go wrong?
Artificial intelligence has become the business world’s favorite new tool, promising cost savings, faster decisions, and even new revenue streams. But the story unfolding at the car rental company Hertz offers a cautionary look at how quickly AI can veer from helpful assistant to harmful enforcer—impacting their customers in troubling ways.
According to a report from View From The Wing, Hertz has unleashed AI-driven systems to detect vehicle damage and automatically bill customers. The results have been eye-opening: the company’s damage claims have skyrocketed, reportedly five times higher than before the technology was implemented. Far from catching damage or fraud, many of these claims involve minor dings and scratches—or even pre-existing flaws that renters say they never caused.
This is a clear example of how AI can be wielded for both efficiency and exploitation. On one hand, it makes sense for a company with thousands of cars constantly cycling through customers to use machine learning and high-resolution image processing. An AI system can scan returned vehicles, flag scratches that weren’t noted at checkout, and accelerate the damage assessment process. What once might have taken a human employee several minutes of inspection can now be done in seconds. In theory, it should reduce disputes by providing consistent, data-driven evaluations.
But in practice, AI has given Hertz an extremely aggressive new tool—one that apparently doesn’t balance fairness or consider customer goodwill. According to customers quoted in multiple articles, charges frequently appear after the rental is complete, with little opportunity to contest the findings. Many are surprised to receive emails or bills for hundreds of dollars weeks after returning a vehicle, often accompanied by automated photos of scuffs that could easily be normal wear and tear. What’s worse, customers say attempts to reach human agents to dispute these charges can turn into a bureaucratic nightmare.
Why is this happening? Quite simply, AI makes it cheap and easy to spot the tiniest cosmetic flaws. Combined with a corporate incentive to maximize revenue from damage fees, the result is a kind of digital over-policing. But, an automated system doesn’t understand the nuance between a superficial scuff and meaningful damage. It doesn’t take into account longstanding rental industry practices where minor blemishes were typically ignored or absorbed as part of doing business. Nor does it weigh whether alienating loyal customers is worth the extra revenue.
This is the darker side of AI adoption. It’s not that the algorithms are inherently unethical—after all, accurately detecting scratches is technologically impressive. The issue lies in how companies choose to deploy these tools. Instead of enhancing customer trust by ensuring genuinely fair damage assessments.
Humans are still needed
AI doesn’t remove the need for human oversight. In fact, it demands more. Algorithms reflect the goals set by their corporate executives. If a company programs its AI to flag and monetize every scratch, that’s exactly what it will do. Without safeguards, appeals processes, or standards that distinguish meaningful damage from ordinary wear, AI becomes a tool for exploitation rather than improvement.
Ultimately, the Hertz example serves as a reminder that while AI is transforming industries, it’s not inherently ethical or customer-friendly. Those qualities depend entirely on how humans design, deploy, and utilize it. If left unchecked, the temptation to leverage AI for short-term gains at the expense of fairness will be too great for many companies to resist.
Hertz misjudged new technology before and they may be doing it again. A number of years ago they added thousands of Teslas to their fleet and it backfired, costing the CEO his job. Enamored with new technology, they never anticipated how renters would rebel when they were given rentals with an unfamiliar interface and no experience in using and charging EVs.
And then there was the time when, due to computer issues, Hertz falsely accused renters of stealing their cars and had them arrested, leading to a $168m settlement. Hertz has shown a propensity of jumping into tech without fully understanding how it can bite them back and alienate their customers.
My advice to renters: choose another rental company until Hertz sorts things out. Stay away from new technology in the hands of a company that has little regard for their customers.
As far as I can tell from reading comments like this, is that Hertz doesn’t put vehicles through the AI scanner when the renter exits the lot. Thus, it seems to me, there’s no way to know if the renter has caused the damage Hertz alleges.
Way ahead of you on this one. I had already abandoned Hertz long BEFORE they started having customers falsely arrested for theft or became infatuated with EVs and AI. For me the writing was already on the wall when they started shoehorning automated toll devices into every rental and I had back-to-back experiences (around 2010 in Florida and Texas, as I recall) contesting post-rental toll billing for charges I couldn’t have made because I disdain toll roads as a matter of principle (I’m old-fashioned and hidebound in many otther ways too despite working as an engineer in the tech sector). Frankly, Hertz hasn’t been a good company so far this century– but now they have a new generation of compliant customers to fleece.
I’m pretty sure I drove through a pair of sensors like this with Avis at LAX last week, so although Hertz has gotten the publicity so far, don’t assume they’re the only one.
Agree with Jerry. Scan the car at the beginning and end of each rental – and/or – make available to customer, as a matter of SOP, the AI scan result as of the car’s previous rental