Car-hailing companies hit by fraud
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.