The Car and Truck Fleet and Leasing Management Magazine

Some Rental Cars Keep Tabs on their Drivers via Telematics

January 19, 2004

Yungsoo Son's recent road trip was mostly for pleasure. But according to a report in the Associated Press on January 13, 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. Son, who manages a grocery store in Georgetown, Ontario, and his wife, picked up a Ford Escort at a Payless Car Rental outlet in San Francisco in November and embarked on a 12-day road trip. 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 state Highway 1 back to Northern California. 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," Son was quoted as saying in the Associated Press story. Penalties for taking a rental vehicle beyond state lines or national borders are not new. But the way in which 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. According to the article, Son said he was surprised to learn that his movements were being tracked. Some car rental companies have come to rely on telematics — which combines satellite-based Global Positioning System (GPS) 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. Neil Abrams, an auto rental consultant, said early uses of GPS technology in rental cars, like the Hertz NeverLost system, were intended to help motorists find their way. But, according to the Associated Press, recent efforts have quietly focused on catching renters who drive out of state or break speed laws. Abrams says it is not always easy to tell if a car is being monitored, although the fine print of a rental contract should disclose the fact. "It could be anything from an antenna on your rental car to something that's internal and can't be seen," he said. Some tracking technologies simply relay a car's coordinates back to a rental franchisee, though more sophisticated versions can keep tabs on any damage to the vehicle and even disengage the engine by remote control if the car is stolen or driven out of the country. If Son had taken the time to read the fine print, he would have seen a disclosure in an addendum to his rental contract warning that the vehicle might be equipped with a tracking device and that driving outside California would cost him $1 a mile or more. Son appealed his bill to Payless and to Acceleron Corporation, the owner of the San Francisco Payless franchise. In an internal memorandum to Mike Harley, Payless's president and chief operating officer, Kathy Johnson, the company vice president, reported that "the client was informed of the geographical restrictions throughout the reservation and rental process," reported the Associated Press. Johnson says the San Francisco franchisee has had geographic restrictions on its cars "for a number of years," and that it added tracking devices gradually to its fleet in 2003. Son also considers the tracking device an invasion of his privacy. He is disputing his credit card charge and is considering suing Payless, contending that, among other things, it failed adequately to disclose the tracking device and violated his right to privacy. It would not be the first time a motorist has taken a car rental company to court over a tracking device. According to the Associated Press, in 2002, a Budget Rent A Car franchisee in Tucson was sued by at least four customers after they were billed $1 a mile for crossing specified state lines, with the extra fees for two of them totaling more than $7,000. The cases were settled out of court, and the Budget franchisee no longer charges $1 a mile for rentals taken beyond areas authorized by its rental agreements.
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