With a stock that has achieved meme status in the past, Hertz Global (HTZ) investors have plenty of experience watching wild swings in the share price of the rental car company.
So hopefully they were prepared with what happened this week: Hertz’s stock surged 6% on Wednesday after the company announced a deal to sell thousands of its used cars on Amazon Autos, and then quickly saw those gains erased by noon on Thursday.
The stock fell on news that U.S. Rep Nancy Mace – who calls herself “Trump in high heels” – sent a letter requesting a meeting with Hertz CEO Gil West to discuss the company’s controversial AI damage scanners that it uses to evaluate vehicles returned by its customers.
Hertz’s stock fell 6.6% in early trading on Thursday.
Mace, who is the chairwoman of the House Subcommittee on Cybersecurity, Information Technology, and Government Innovation, said in her letter that the subcommittee wanted to talk to him about the company’s use of AI technology and “Hertz’s plans to ensure that large and small customers alike benefit from the implementation of this new technology.”
She noted the media reports that have come out about the company’s use of the AI damage scanners that have “captured some customer complaints questioning why a fully automated process often does not give customers a damage assessment until after they have left a rental location.”
Mace added that there are further complaints that the company then makes it difficult for customers to speak to a Hertz representative about the damage fees they have been charged.
One Hertz customer told auto newsletter The Drive that he was charged $440 for “a 1-inch scuff on the driver’s side rear wheel” that Hertz’s scanner found after he returned the car to a location at the Hartsfield-Jackson International Airport in Atlanta.
But when he tried to inquire about the charge, he had to go through a chatbot, and the chatbot couldn’t put him in touch with a human Hertz representative.
“Some other car rental companies reportedly use AI as a tool but require human staff to review any damage flagged by the scanning system before billing customers,” Mace’s letter states. “However, Hertz is apparently the only car rental company in the US that issues damage assessments to customers without human review.”
Other customers have told Sherwood News that “the company’s AI scanners flag small, seemingly insignificant bumps, scuffs, and dents that a human inspector would pass over” and then charge excessive fees for these minor blemishes.
Mace has requested a briefing with West no later than Aug. 27.
Investors cheer Amazon deal
It’s not all bad for Hertz.
The company’s stock rose on its deal with Amazon (AMZN), which the company called “a significant step in Hertz’s broader transformation strategy” by “forging innovative technology partnerships to provide a more seamless customer experience.”
Hertz becomes the first fleet dealer to sell its used cars on Amazon Autos.
Customers can now browse the listings from Hertz on Amazon Autos, complete their purchase online, and pick up their vehicle at Hertz Car Sales locations.
“Our goal is to reimagine the car-buying experience and meet customers where they are – whether online or in person – with convenience, confidence and scale,” Jeff Adams, executive vice president of Hertz Car Sales, said in a statement. “Amazon Autos is the ideal partner to help us deliver on this as customers can shop our expansive inventory of high-quality used cars on the same trusted marketplace where millions shop every day.”
The service will initially begin in Dallas, Houston, Los Angeles and Seattle, with plans to expand to Hertz’s 45 locations nationwide.
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