Rental cars are increasingly equipped with connected-car technology -- so much so that we wrote a blog post asking whether rental cars were spying on renters. And for the most part, rental car companies are not spying on their everyday rentals; connected cars may report vehicle location but are ordinarily used to help customers or vehicle maintenance. The location data is usually only requested when a vehicle has been stolen (or suspected as stolen). Unless one is in the State of California, which has the most strict domestic limitations on the use of tracking technology in rental cars under the guise of consumer protection from "electronic surveillance technology".
What is Electronic Surveillance Technology?
The concept of Electronic Surveillance Technology was introduced into California law in 2016 and refers to any system in a rental car that collects information except crash data recorders or systems that monitor the function of a vehicle (such as tire presssure or oil life remaining). Any other system in vehicle that collects data -- including location of the vehicle -- is regulated.
(h) “Electronic surveillance technology” means a technological method or system used to observe, monitor, or collect information, including telematics, Global Positioning System (GPS), wireless technology, or location-based technologies. “Electronic surveillance technology” does not include event data recorders (EDR), sensing and diagnostic modules (SDM), or other systems that are used either:
(1) For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2) As part of the vehicle’s airbag sensing and diagnostic system in order to capture safety systems-related data for retrieval after a crash has occurred or in the event that the collision sensors are activated to prepare the decisionmaking computer to make the determination to deploy or not to deploy the airbag.
When can a rental car company on a California rental use "electronic surveillance technology" to actually locate a vehicle? There are a series of rules: when the renter/law enforcement say the vehicle's been stolen or abandoned; when a vehicle is a week overdue for return; when the car is part of an AMBER Alert; when there is a subpoena / search warrant from law enforcement; or if the rental car company discovers a vehicle has been stolen and has filed a police report.
These are the only valid reasons to track a vehicle when rented in the State of California. Sign a rental contract in Los Angeles stating that the vehicle cannot be driven into Mexico? As long as the rental car is returned on time and there are no traffic citations, crimes, arrests, accidents, or theft, the rental car company has no legal way of knowing. We definitely discourage that type of behavior -- we are strong proponents about reading and following rental terms -- but it's a simple fact in California law. Driving into forbidden areas is not a legal reason to track vehicles in California:
A rental company shall not use electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter’s use of the rental vehicle.
The Rental Companies Ask for Change
Some rental car companies are beginning to push back on the inability to track standard. After all, the average new car today costs more than $35,000 and rental patterns have consistently shifted towards larger, more expensive vehicles such as SUVs and minivans. Yet the pushback isn't about the inability to pursue fines or surcharges when vehicles are used in violation of rental contracts; it's based upon limitations on rental car operators when it comes to profoundly overdue (read, stolen) vehicles. Renters today prefer more expensive vehicles; car thieves prefer the most expensive vehicles.
An interlude at this point -- the reader is probably aware car theft is a problem in the State of California. More than one Zipcar per day was being stolen in San Francisco alone at the time the California State Legislature banned the tracking of rental vehicles! Today, California is home to just over 12% of the U.S. population but has 12 of the 20 worst statistical areas for car theft in the country. This is an area where lawmakers (and law enforcement) could really make a difference!
Rental operators in California have two sources of frustration. The first is the interpretation that a car isn't considered stolen in California unless it's a week overdue. The second part that frustrates rental car company operators is that when the rental car company discovers that a vehicle is stolen, the rental car company has to then go file a police report before tracking or retaking possession of their vehicle, even if the rental car company just found the stolen vehicle. The system as configured allows many stolen vehicles to vanish. The owner of Bandago says some of his stolen vehicles have ended up in Chad and Saudi Arabia!
Cities such as Chicago want rental car operators to report stolen vehicles more quickly. In California, a rental vehicle's not considered stolen unless it's a week overdue. A company that rents a car on Monday for a one-day rental? That rental company can't even send a text message that the car's overdue and the vehicle's not considered stolen or trackable until the next Tuesday, when the rental car company can use a location service if the vehicle is so equipped. And a lot can happen in a week, from chop shops to international relocations (via land borders or ships)!
Will the Law be Revised to Help Rental Car Companies?
That's hard to say; California is well known for consumer protection such as legal declarations that every element of the environment, including coffee, causes cancer despite scientific doubt. A claim from Senator Hannah-Beth Jackson, replayed in the Washington Post, is rather telling:
"There really isn’t at this point sufficient evidence that these scenarios exist enough to outweigh the privacy concerns of good customers who follow the rules."
The rental companies might disagree that a customer who returns a car six days later than agreed on a signed contract -- without any notice -- is a "good customer who follows the rules", even after paying contract modification and late return fees (in addition to the extra time, taxes, and fees). We're all consumers of rental cars and theft causes prices to rise for all of us. If the rental car companies can't be protected from theft, we suspect rental requirements in California will become much more stringent over time, as they have for renters who make the choice to attempt renting with debit cards.