Some rental companies keep tabs on their drivers

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By | January 13th, 2004

Byungsoo Son’s recent western trip was mostly for pleasure. But the car rental bill he was hit with at the end is a cautionary tale for the business travelers who make up the bulk of the auto rental industry’s customers.

Mr. Son, who manages a grocery store in Georgetown, Ontario, and his wife, Junghyun, picked up a Ford Escort at a Payless Car Rental outlet in November in San Francisco — their son, Jaehwa, is an intern for a credit card company there — and embarked on a 12-day road trip with him.

First, they drove to Las Vegas, 50 miles east of the California state line, and from there 200 miles to the Grand Canyon in Arizona, before circling back to Palm Springs, Calif. They then traveled west to the coast to drive on the scenic state Highway 1 back to Northern California.

Mr. Son received a shock when he returned the car. The $259.51 bill he expected had ballooned to $3,405.05 — most of it a result of a $1-a-mile fee for each of the 2,874 miles driven. It turned out that by crossing the state line, he had violated his contract with Payless.

”If we had known we couldn’t drive the car outside California, we wouldn’t have rented it,” Mr. Son said.


Penalties for taking a rental vehicle beyond state lines or national borders are not new. But the way in which Mr. Son’s surcharge was applied was somewhat novel. The rental company presented him with a map showing his exact route outside California as relayed by a tracking device in his car. Mr. Son said he was surprised to learn that his movements were being tracked. A letter was included with the bill. ”Should you choose to dispute this amount,” wrote Umesh Pudasaini, the Payless branch manager, ”we will pursue all avenues” to collect full payment. Car rental companies have come to rely on an emerging technology called telematics — which combines satellite-based Global Positioning System tracking, wireless communications and vehicle monitoring systems — to keep tabs on their vehicles. About a quarter of the rental cars in the United States are equipped with tracking technology, analysts estimate. The industry views telematics as a way to enforce its contracts, but some customers regard it, at best, as a means to make more money and, at worst, as an invasion of privacy.

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Neil Abrams, an auto rental consultant, said early uses of G.P.S. technology in rental cars, like the Hertz NeverLost system, were intended to help motorists find their way. But recent efforts have quietly focused on catching renters who drive out of state or break speed laws.

The car rental industry already has a reputation for high gasoline-refill charges and airport use fees, among other items, and business travelers are concerned that telematics will offer yet another opportunity for companies to impose additional charges.

Donna Williams, a former investment banker, is worried about another potential drawback. ”You don’t always want your car rental company knowing where you’re going,” said Ms. Williams, the author of ”The Business Travel Almanac” (Que Publishing, 2004). ”What if you’re doing your due diligence on a transaction, and you’ve rented a car with a tracking device? If your rental company knows who you are, which company you work for, and where you are, it could threaten the whole deal. It could even be used as insider trading information.”