Some Rental Cars Are Keeping Tabs on the Drivers

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Some Rental Cars Are Keeping Tabs on the Drivers

Petition regarding Gay Marriages/Civil Unions at the Bottom

http://www.nytimes.com/2004/01/13/business/13gps.html?pagewanted=all&position=
By CHRISTOPHER ELLIOTT

Published: January 13, 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.

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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.

"When you put a perfect stranger in a $30,000 vehicle, you have to protect yourself," Mr. Abrams said.

The customers also need to be protected, said Mari Anne Sullivan, president of the Association of Car and Truck Rental Independents and Franchisees. "There are liability issues when you take a car out of state, and the tracking devices also help prevent theft," Ms. Sullivan said. "That keeps rental costs down."

But Mr. Son contends profit also plays a part. He said he made his itinerary before reserving the car and never hid his plans from Payless. He also says the agent at the rental counter neither asked him where he intended to go or told him of the restrictions. Mr. Son admitted that he did not read the contract.

"There were many customers waiting behind us, and I felt rushed to sign the contract," he said.

If Mr. 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.

Payless confirmed the restrictions in an e-mail message it sent to the customer, but Mr. Son's son made the booking on his behalf, so he did not see it.

Mr. Son appealed his bill to Payless and to the 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."

Ms. 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.

Payless deferred to its franchisee for a decision on Mr. Son's request. Mr. Pudasaini turned him down. "You violated the signed rental agreement and jeopardized our company and your family," he wrote in an e-mail message to Mr. Son. "You planned this trip in advance but decided to conceal your intent."

Jaehwa Son, who was present when the car was picked up and returned, denied his father hid anything from Payless. "Why would anyone even try to risk a $3,400 car rental bill by concealing that kind of information?" he asked. "We just didn't know about the rule."

Mr. 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. 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.

Perhaps the most high-profile tracking case to date involved Acme Rent-a-Car in New Haven, which imposed $150 fines on customers each time they drove more than 79 miles an hour for two or more minutes. In one instance, a customer was charged $450 for his driving.

In February 2002, the Department of Consumer Protection ordered the company to stop fining its customers and to refund the penalties, arguing that the tracking devices were inadequately disclosed and the fines were excessive.