The shop owner is a moron.

First he let a tech drive a customers car as some kind of reward for working on it? wtf is that?

Then the customer layed out a reasonable way to have it handled and instead of simply saying yes and likely saving his shop he tried to manipulate the situation and play damage control.

Now hes likely gonna get sued, his and his shops reputation is completely shot, and its probably only a matter of time till he goes under. Idiot