Some Rental Cars Are Keeping Tabs on the Drivers

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Wed, 14 Jan 2004 00:33:21 -0800
From: Dewayne Hendricks <dewayne () warpspeed com>


Some Rental Cars Are Keeping Tabs on the Drivers
By CHRISTOPHER ELLIOTT
<<http://www.nytimes.com/2004/01/13/business/13gps.html>http://www.nytimes.com/2004/01/13/business/13gps.html>

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.

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."

Mr. 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.

<snip>

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