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Some Rental Cars are Keeping Tabs on the Drivers<br><br>
January 13, 2004<br>
By CHRISTOPHER ELLIOTT <br><br>
<br><br>
<br><br>
Byungsoo Son's recent western trip was mostly for pleasure.<br>
But the car rental bill he was hit with at the end is a<br>
cautionary tale for the business travelers who make up the<br>
bulk of the auto rental industry's customers. <br><br>
Mr. Son, who manages a grocery store in Georgetown,<br>
Ontario, and his wife, Junghyun, picked up a Ford Escort at<br>
a Payless Car Rental outlet in November in San Francisco -<br>
their son, Jaehwa, is an intern for a credit card company<br>
there - and embarked on a 12-day road trip with him. <br><br>
First, they drove to Las Vegas, 50 miles east of the<br>
California state line, and from there 200 miles to the<br>
Grand Canyon in Arizona, before circling back to Palm<br>
Springs, Calif. They then traveled west to the coast to<br>
drive on the scenic state Highway 1 back to Northern<br>
California. <br><br>
Mr. Son received a shock when he returned the car. The<br>
$259.51 bill he expected had ballooned to $3,405.05 - most<br>
of it a result of a $1-a-mile fee for each of the 2,874<br>
miles driven. It turned out that by crossing the state<br>
line, he had violated his contract with Payless. <br><br>
"If we had known we couldn't drive the car outside<br>
California, we wouldn't have rented it," Mr. Son said. <br><br>
Penalties for taking a rental vehicle beyond state lines or<br>
national borders are not new. But the way in which Mr.<br>
Son's surcharge was applied was somewhat novel. The rental<br>
company presented him with a map showing his exact route<br>
outside California as relayed by a tracking device in his<br>
car. Mr. Son said he was surprised to learn that his<br>
movements were being tracked. A letter was included with<br>
the bill. "Should you choose to dispute this amount,"
wrote<br>
Umesh Pudasaini, the Payless branch manager, "we will<br>
pursue all avenues" to collect full payment. Car rental<br>
companies have come to rely on an emerging technology<br>
called telematics - which combines satellite-based Global<br>
Positioning System tracking, wireless communications and<br>
vehicle monitoring systems - to keep tabs on their<br>
vehicles. About a quarter of the rental cars in the United<br>
States are equipped with tracking technology, analysts<br>
estimate. The industry views telematics as a way to enforce<br>
its contracts, but some customers regard it, at best, as a<br>
means to make more money and, at worst, as an invasion of<br>
privacy. <br><br>
Neil Abrams, an auto rental consultant, said early uses of<br>
G.P.S. technology in rental cars, like the Hertz NeverLost<br>
system, were intended to help motorists find their way. But<br>
recent efforts have quietly focused on catching renters who<br>
drive out of state or break speed laws. <br><br>
The car rental industry already has a reputation for high<br>
gasoline-refill charges and airport use fees, among other<br>
items, and business travelers are concerned that telematics<br>
will offer yet another opportunity for companies to impose<br>
additional charges. <br><br>
Donna Williams, a former investment banker, is worried<br>
about another potential drawback. "You don't always want<br>
your car rental company knowing where you're going," said<br>
Ms. Williams, the author of "The Business Travel Almanac''<br>
(Que Publishing, 2004). "What if you're doing your due<br>
diligence on a transaction, and you've rented a car with a<br>
tracking device? If your rental company knows who you are,<br>
which company you work for, and where you are, it could<br>
threaten the whole deal. It could even be used as insider<br>
trading information." <br><br>
Mr. Abrams says it is not always easy to tell if a car is<br>
being monitored, although the fine print of a rental<br>
contract should disclose the fact. "It could be anything<br>
from an antenna on your rental car to something that's<br>
internal and can't be seen," he said. Some tracking<br>
technologies simply relay a car's coordinates back to a<br>
rental franchisee, though more sophisticated versions can<br>
keep tabs on any damage to the vehicle and even disengage<br>
the engine by remote control if the car is stolen or driven<br>
out of the country. <br><br>
"When you put a perfect stranger in a $30,000 vehicle, you<br>
have to protect yourself," Mr. Abrams said. <br><br>
The customers also need to be protected, said Mari Anne<br>
Sullivan, president of the Association of Car and Truck<br>
Rental Independents and Franchisees. "There are liability<br>
issues when you take a car out of state, and the tracking<br>
devices also help prevent theft," Ms. Sullivan said.
"That<br>
keeps rental costs down." <br><br>
But Mr. Son contends profit also plays a part. He said he<br>
made his itinerary before reserving the car and never hid<br>
his plans from Payless. He also says the agent at the<br>
rental counter neither asked him where he intended to go or<br>
told him of the restrictions. Mr. Son admitted that he did<br>
not read the contract. <br><br>
"There were many customers waiting behind us, and I felt<br>
rushed to sign the contract," he said. <br><br>
If Mr. Son had taken the time to read the fine print, he<br>
would have seen a disclosure in an addendum to his rental<br>
contract warning that the vehicle might be equipped with a<br>
tracking device and that driving outside California would<br>
cost him $1 a mile or more. <br><br>
Payless confirmed the restrictions in an e-mail message it<br>
sent to the customer, but Mr. Son's son made the booking on<br>
his behalf, so he did not see it. <br><br>
Mr. Son appealed his bill to Payless and to the Acceleron<br>
Corporation, the owner of the San Francisco Payless<br>
franchise. In an internal memorandum to Mike Harley,<br>
Payless's president and chief operating officer, Kathy<br>
Johnson, the company vice president, reported that "the<br>
client was informed of the geographical restrictions<br>
throughout the reservation and rental process." <br><br>
Ms. Johnson says the San Francisco franchisee has had<br>
geographic restrictions on its cars "for a number of<br>
years," and that it added tracking devices gradually to its<br>
fleet in 2003. <br><br>
Payless deferred to its franchisee for a decision on Mr.<br>
Son's request. Mr. Pudasaini turned him down. "You violated<br>
the signed rental agreement and jeopardized our company and<br>
your family," he wrote in an e-mail message to Mr. Son.<br>
"You planned this trip in advance but decided to conceal<br>
your intent." <br><br>
Jaehwa Son, who was present when the car was picked up and<br>
returned, denied his father hid anything from Payless. "Why<br>
would anyone even try to risk a $3,400 car rental bill by<br>
concealing that kind of information?" he asked. "We just<br>
didn't know about the rule." <br><br>
Mr. Son also considers the tracking device an invasion of<br>
his privacy. He is disputing his credit card charge and is<br>
considering suing Payless, contending that, among other<br>
things, it failed adequately to disclose the tracking<br>
device and violated his right to privacy. <br><br>
It would not be the first time a motorist has taken a car<br>
rental company to court over a tracking device. In 2002, a<br>
Budget Rent A Car franchisee in Tucson was sued by at least<br>
four customers after they were billed $1 a mile for<br>
crossing specified state lines, with the extra fees for two<br>
of them totaling more than $7,000. The cases were settled<br>
out of court, and the Budget franchisee no longer charges<br>
$1 a mile for rentals taken beyond areas authorized by its<br>
rental agreements. <br><br>
Perhaps the most high-profile tracking case to date<br>
involved Acme Rent-a-Car in New Haven, which imposed $150<br>
fines on customers each time they drove more than 79 miles<br>
an hour for two or more minutes. In one instance, a<br>
customer was charged $450 for his driving. <br><br>
In February 2002, the Department of Consumer Protection<br>
ordered the company to stop fining its customers and to<br>
refund the penalties, arguing that the tracking devices<br>
were inadequately disclosed and the fines were excessive. <br><br>
Readers are invited to send stories about business travel<br>
experiences to businesstravel@nytimes.com. <br><br>
<a href="http://www.nytimes.com/2004/01/13/business/13gps.html?ex=1075056393&ei=1&en=6b4f25d0f0b1f672" eudora="autourl">http://www.nytimes.com/2004/01/13/business/13gps.html?ex=1075056393&ei=1&en=6b4f25d0f0b1f672</a><br><br>
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