The first thing that we should say is that this article isn't attacking ALL hand car washes, there may be some good ones that use good techniques and don't damage your car over time. However we do not know of any that use the same techniques as a professional valeter or detailer.
In a simple answer to the question, yes hand car washes do use acid. The reason for this is that they want to clean as quickly as possible without having to touch your wheels. They will often only know to use acid on the wheels, some of the time this will be fine, others it will damage a wheel to the point that it needs a total refurbishment. We refurbish multiple sets of wheels a week that have been damaged by these methods. Even on diamond cut wheels which are fairly standard nowadays, they will still use acid which will destroy the lacquer and cause them to rust.
At the end of the day it all comes down to price, acid is cheap, especially seen as some hand car washes don't even use acid designed for cars, instead they use brick acid or driveway cleaning acid. When you are paying £7 for your car to be washed, this has to cover staff, rent and the products that they are using. When we valet a car, we may spend 10 minutes plus fully washing a wheel, if a hand car wash did that they would be out of business. The flip side is that when we wash a wheel it is completely safe and used specifically for your wheels, not just sprayed on every car that drives through.
This is one of the many reasons that a hand car wash may not be the bargain that it first appears. In our opinion it is actually better value to pay slightly more and have a better, safer wash for your car. In the long run this works out cheaper for you, plus your car will look much better too!