Artificial Intelligence (AI): Smart control of rental cars and hotels

AI-powered damage scanners are a new way rental car companies potentially charge customers. At the same time, they demonstrate the direction of cost control.

Car rental companies Hertz and Sixt are currently setting new standards when it comes to damage to cars upon return. In the first half of the year, they quietly deployed damage scanners that use AI to scan for scratches, dents, and bumps on the returned car.

Hertz primarily uses the AI scanners at the drop-off points at US airports. They are currently in operation at six major airports, including Atlanta, Newark, and Phoenix. By the end of this year, 100 of the 1,600 airports in the US are expected to be equipped with the new technology. The scanner utilizes cutting-edge AI technology from the Israeli company UVeye, which is also significantly expanding its civilian customer base. The device, which resembles a car wash, was originally developed to detect car bombs and similarly deadly devices.

AI damage scanners see x times better

Sixt, on the other hand, uses its own AI technology , "Car Gate." On the company website, Car Gate is described as a "drive-through scanner" equipped with cameras, sensors, and a special lighting system. The vehicle is automatically photographed when leaving and re-entering the car scanner at the station—i.e., at the beginning and end of the rental. When the car is returned, the photos are then compared to detect any new damage. Both Hertz and Sixt emphasize that employees still make the final decision.

AI damage scanners offer only advantages for rental service providers: They are fast, precise, and neutral. Furthermore, AI is unbeatable at recognizing patterns. But these very capabilities make their use questionable in all industries where customer service and individual discretion still play a role. A Hertz spokeswoman praised the new system to CNBC because it brings "much-needed precision, objectivity, and transparency" to the return process. Customers now have greater security that they won't be billed for damage they didn't cause. Of the approximately 500,000 cars scanned to date, only three percent have shown billable damage.

Expensive micro-damages

But consumers and AI observers see things differently. Because the damage scanners really do see everything, even microscopic damage that's invisible to the naked eye, some Hertz customers were very surprised by the high damage bills. According to the tech portal zdnet.com , one customer was hit with hefty costs of $250 in repair costs, a $125 processing fee, and $65 in administrative costs immediately after returning the car – a total of $440 for barely noticeable damage.

AI expert Shannon McKeen of Wake Forest University considers the damage scanners from Hertz and Sixt a significant disruption in the service industry. He told the New York Times : "As companies seek to automate loss prevention and operational efficiency, we're seeing the emergence of what I call 'algorithmic auditing'—the systematic use of AI to identify, classify, and monetize previously overlooked inefficiencies or losses." In simple terms, thanks to AI, even micro-damages can be billed immediately to the customer, and companies benefit from "loss prevention."

“Algorithmic auditing” also possible in the hotel industry

Furthermore, "algorithmic auditing" is also ideally suited to the hotel industry. However, according to CNBC , Jordan Hollander, an expert from the specialist portal Hoteltechreport.com, has yet to see AI applications in the hospitality industry like those at Hertz and Sixt. However, many experiments are being conducted. For example, some hotels are already using AI-supported sensors to monitor for prohibited smoking or vaping in guest rooms. Errors and thus false accusations cannot be ruled out.

On the other hand, AI helps uncover potential deficiencies such as a room with a foul odor, worn linens, or maintenance issues. If a human ultimately decides what needs to be done, the AI takes over the role of an assistant. However, Hollander is under no illusion "that things are moving in the same direction (as Hertz, editor's note)." Intelligent scanning systems that identify damage and wear and tear in rooms, or AI that analyzes guest behavior or the condition of the room in real time, have long been possible. Someone just needs to make the first move and announce that they are using AI for this purpose.

Loss of customer trust

But while the bed industry uses intelligent software for marketing and management—in short, for the entire operation in the background—it still shies away from applying it in direct contact with guests. It knows that AI and control could completely ruin customer trust. What guest wants to feel like they're being watched in their room? And speaking of damage: broken glass, a tiny scratch on the wall—isn't that wear and tear? But if there's one thing AI doesn't know, it's goodwill.

(thy)

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