By Ken Ficara @CNNMoneyTech June 1, 2011: 5:31 AM ET
Zipcar's 'simple' rental rules have one big flaw: What happens when a car is damaged between reservations?
NEW YORK (CNNMoney) -- Ken Ficara is a musician, writer and technology consultant based in New York City.
Zipcar has been a hit in urban areas like New York, where having your own car can be an expensive hassle. A friend of mine signed up recently, and I joined her account.
At first I loved it -- two quick rentals for $50 saved me a lot of hauling music equipment around and were cheaper and more convenient than a cab ride. But then, the gotcha hit.
And it's a big gotcha: $750 to be exact.
Zipcar's friendly site explains its "six simple rules" breezily, and they sound obvious. One of them is, walk around the car before your reservation and report any damage. So far so good. I picked up my car on a Thursday night, looked it over, and drove off. I returned it three hours later and went home happy.
But sometime after I dropped it off, the car was damaged, most likely by the parking garage attendants. And according to Zipcar (ZIP) and their terms of service, I was responsible for that damage even though I had not caused it.
Their contract says very simply: "If Zipcar is not notified of a problem at the start of a reservation, you will be held responsible for unreported damage to the vehicle after your reservation, and Zipcar may charge you damage fees, suspend, or may even terminate your membership."
In other words, if the car is not damaged at the start of your reservation, and is damaged at the start of the next member's reservation, you are responsible. Period.
In my lengthy and largely one-sided exchanges with Zipcar (see details below; most of my e-mails and questions went unanswered), I kept asking the same question over and over: If I could prove that the car was not damaged when I dropped it off -- let's say I made sure to photograph the car at the end of my reservation -- am I still responsible for the damage?
They never clearly answered this question, but based on others' experiences as well as my own (check out this Yelp review and New York Times article) the answer is yes. They will not only hold you responsible, they will charge you the $750 fee immediately, before any appeal, before the car is repaired, and before your insurance adjuster or lawyer can inspect the vehicle. And based on what happened to me, they will do it all with vague and breezy e-mails, and ignore your questions.
I don't know if this is a callous policy or a way of encouraging members to pay an extra $75 year for the damage waiver -- even those of us, like me, who are already covered by our auto insurance plans or credit cards -- but either way, it's outrageous. And they're being deliberately vague about it on their site and in conversations or e-mails with their customer service staff.
My saga started almost a week after my reservation, when I got an e-mail from Zipcar:
We are contacting you about a damage report that we received after your reservation on May 6th in [Location]. As you know, we depend on our members to be our extra set of eyes and since the damage was reported following your reservation, we hope that you can work with us to resolve this issue.
Please understand that we are not looking to assign blame, nor have we confirmed that there is indeed damage to the car.
Following up with members after a damage report is our standard practice. The next step will be thoroughly looking into the damages reported. We will update you within three business days with any news.
I wrote back immediately, on my phone, saying, "What are you talking about? There was no damage to the car. And I rented it a week ago. Why is this coming now?"
The next day a different rep wrote back:
Thank you for your response. According to the Zipcar Member Contract, any damage that is not reported by you at the start of your reservation is considered your responsibility. This is why we stress in our Six Simple Rules that you perform a pre-reservation walk-around and call 1-866-4ZIPCAR (1-866-494-7227) to report any existing damage.
It's certainly not our intention to charge you for damage that didn't happen during your reservation. To make this process as fair as possible, we will contact the member who reserved the vehicle before you. If that member confirms that the damage existed before your reservation, you will not be responsible for the damage fee. We will be in touch within the next five business days with an update.
There were attachments to this message that showed up as broken links on my phone; when I finally got to a computer to read it, the links took me to blurry and unlabeled photos of what looked like scratches on the front bumper of the car. I wrote back again, immediately, asking for more details.
I received no response from them until the following Monday, May 16:
Thank you for your message and apologies for the inconvenience. We confirmed that the damage to [Car Name] did not exist prior to the evening of your reservation on Friday, May 6 and you were contacted within three business days afterward (excluding the weekend). Because this damage was reported directly after your reservation, and was not reported by you on your pre-reservation walk-around, you are responsible for the damage fee.
The cost to repair the damage is $801.92, but you are only responsible for our standard damage fee of $750, which has been charged to your account. The rest of the cost is being taken care of by Zipcar.
This message again included a broken-link attachment that turned out to be a PDF of the damage estimate for the car. I again wrote back immediately, and again received no response. Meanwhile, Zipcar charged our account for the $750. It was taken from my friend's account immediately -- which was a debit card linked to her bank account.
A word of warning: If you use Zipcar, make sure your account uses a real credit card. That would have given my friend a chance to dispute the charge with her credit-card company, instead of having it unexpectedly vaporized from her checking account by Zipcar.
On Thursday, May 19, having heard nothing, I called my insurance company to file a claim, since they cover rental car damage. I then called Zipcar to give them the claim number and see if there was any follow-up to my e-mail. They had nothing meaningful to say.
Later that same day I received another e-mail from Zipcar:
Good news. As you know, we've been looking into damages to [Car Name] that were reported after your reservation. After a further review with management, you will not be held responsible.
No explanation of why. No information about when they'd refund the $750 -- it took four days. Nothing.
CNNMoney asked Zipcar for a response to this customer-service breakdown. Here's their reply -- including a pledge to change their notification procedures:
At Zipcar, we obsess about the member experience. We survey our members daily regarding their experiences with our service and are constantly looking for ways to improve.
In the case of Mr. Ficara, a member of our team dropped the ball on communication. Our responsiveness to his concerns was not representative of how Zipcar handles our member communications every day.
It is important to acknowledge that Mr. Ficara's damage fee was fully refunded within 6 business days from the initial inquiry, once we were able to assess his claim and confirm that he did not cause the damage to the vehicle.
Zipcar is a self-service model, so we must rely on our members to report any damage they have caused to a vehicle, and the following member to also do an inspection of the vehicle prior to their departure and report any unreported damage that may have been caused by the previous member. In a nutshell, our members police themselves and each other.
In this particular instance, the member after Mr. Ficara's reservation reported the damage and we needed a reasonable amount of time to assess the claim.
That said, as a result of Mr. Ficara's concerns, we are rolling out a new process by which every member being charged a damage fee will receive a phone call from one of our member services team members in addition to the e-mail we currently send.
Credit: CNN (www.cnn.com)
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