Hertz, the global rental car giant, has sparked customer backlash after it deployed an AI system to scan vehicles for damage and bill customers automatically. Adam Foley, an AI and automation consultant, was one of those customers. After picking up his rental car from Hartsfield-Jackson Atlanta International Airport, he received an automated text message and email informing him of detected damage, along with $350 in charges. Foley was particularly upset about the $190 in “fees” and the fact that he was unable to speak with a human to dispute the charges. He said a chatbot simply “looped” through the company’s policy. After his LinkedIn post about the experience went viral, Hertz eventually waived the fees seven weeks later.
The Mechanics of the AI System
Hertz defended its decision, with spokesperson Emily Place saying the system is more efficient and addresses a customer pain point. “For years, vehicle damage inspections have caused confusion and frustration. The process was manual, subjective, and inconsistent, and that isn’t good enough for our customers or our business,” she said. The UVeye-developed system takes 360-degree images of the vehicle when it is picked up and returned. It then uses AI to compare the before and after images, identifies any damage, and automatically bills customers for damages exceeding a certain threshold. According to Hertz, fewer than 3% of the vehicles scanned are billed for damages. While customers can dispute charges through chat, email, phone, or social media, Hertz’s mobile app does not currently allow them to contact a human, a functionality the company says it plans to add.
Expert Advice on Human-Centric AI
Audrey Chee-Read, a principal analyst at Forrester, said that the AI system feels like it benefits the company more than the customer. “Having a technology to assess damages that may be general wear and tear or invisible to the human eye will feel even more emotionally upsetting to the customer,” she said. Experts advise companies to exercise caution when implementing customer-facing AI. John Dubois, EY Americas AI strategy leader, suggests thinking of AI from the perspective of a “butler,” not a “stalker,” meaning the system should be in service of the customer, not just about maximizing profits. Foley, the customer who experienced the issue, said that any system he has built has humans take over after a few disgruntled messages from a user. This highlights that human oversight is essential, as AI-powered systems cannot effectively make judgment calls based on emotion.
Author’s Opinion
Hertz’s botched rollout of its AI damage scanner is a textbook example of the perils of deploying technology with a “profit-first” mindset. While the efficiency gains of automation are undeniable, they are worthless if they come at the cost of customer trust and a human-centric experience. The fact that the system was designed to make it difficult to dispute charges, particularly without a human contact point, shows a fundamental misunderstanding of customer service. The viral backlash and subsequent reversal of charges prove that in the age of social media, a company’s reputation can be damaged far faster than any cost savings from automation can be realized. It is a cautionary tale for any business looking to automate its customer experience without putting the customer’s needs first.
Featured image credit: dhub limited via Flickr
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