Car-hail­ing com­pa­nies hit by fraud

China Daily (Canada) - - FRONT PAGE - By LI XUEQING in Shang­hai

lixueqing@chi­nadaily.com.cn

As China’s car-shar­ing mar­ket con­tin­ues to grow, so have the num­ber of fare scams.

About 3 per­cent of Uber’s trips in China are fraud­u­lent, but the com­pany is con­fi­dent that it can lower this statis­tic to less than 1 per­cent, said Yin Jie, a se­nior as­so­ciate at Uber China’s com­mu­ni­ca­tion depart­ment.

“Nine out of 10 driv­ers I know have done this,” said Jiang Lin from Hangzhou of Zhe­jiang province, con­fess­ing that she has done it be­fore as well.

One way of scam­ming in­volves get­ting a friend — one who is head­ing in the same di­rec­tion as the driver — to place an Uber or­der us­ing the app. There is a high chance the driver will be as­signed the job if he is clos­est to this friend’s lo­ca­tion. Once the trip is com­plete, the driver re­funds his friend the fare and keeps the sub­si­dies that Uber pays.

Jiang jus­ti­fies this ac­tion by say­ing it ben­e­fits Uber as she in­tro­duces new users in this way. She also sees it as a kind of com­pen­sa­tion for driv­ing her 500,000-yuan ($80,500) Audi Q5 for a rel­a­tively cheap fare.

How­ever, she in­sisted that she has never got­ten in­volved in a syn­di­cate that or­ga­nizes fake trips among mem­bers.

“The group ap­proaches you by pre­tend­ing to be your pas­sen­ger. They then in­tro­duce the plan in your car. If you agree to it, they’ll or­ga­nize the scam through online chat soft­ware,” said Jiang. “I have a job. I don’t have time for that.”

Another way of scam­ming is done via soft­ware that can cre­ate fake trips on the Uber app. The price of such soft­ware ranges from 1,000 to 3,000 yuan on Taobao.com, the Chi­nese equiv­a­lent of eBay.

Li Feng, a driver in Shang­hai, said some Uber driv­ers can make as much as 80,000 yuan a month us­ing this method.

“There used to be huge loop­holes in Uber’s sys­tem. But now it’s not as easy to con it as be­fore,” Li said.

When asked about the con­se­quences of such fraud, Yin said that once a driver or pas­sen­ger is in­volved in such scams, his Uber ac­count will be closed per­ma­nently. She also said that Uber’s anti-fraud team has been hard at work de­vel­op­ing new tools to fight these scams.

“Judg­ing from our ex­pe­ri­ence in the global mar­ket, frauds in the Chi­nese mar­ket are not worse than other cities,” said Yin. “Com­pared with other com­pa­nies in the in­dus­try, we have fewer fake trips be­cause we have more ex­pe­ri­ence and a more ad­vanced sys­tem to fight fraud.”

Things are not that dif­fer­ent over at Didi Kuaidi, Uber’s main com­peti­tor in China. Didi Kuaidi’s pres­i­dent Liu Qing told media in Bei­jing ear­lier this month that the com­pany is “fight­ing fake trips like its fight­ing ter­ror­ism”. Over in Hangzhou, more than 1,000 driv­ers’ ac­counts were closed for three days by Didi Kuaidi, re­ported Zhe­jiang Online.

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