That's one way to do it.
The other way, on more advanced planes, is to have a fuel totaliser (a device where you set the FOB - fuel on board - when you fill up; usually you set the max usable fuel and fill up accurately to the brim) and then there is accurate accounting for fuel used.
The renter is then invoiced for the airborne (or whatever) time, and gets a separate amount to pay for the fuel.
It's a very good system. I used to run it when I used to rent out the TB20. It's totally fair, and encourages correct engine management. I used to bill airborne time only too, which was even better because at about 2.5USG/hr idle flow rate the pilot has no incentive to do all the usual crazy engine revving and mad driving stunts on the ground which we see daily. The downside is that a crook (I had one or two such; one was an instructor) can mess with the FOB setting to make it look like he used less fuel.