The reason I can be so certain Uber support will refund an illegitimate cancellation fee is I know the most important things that a driver does… or doesn’t do… things that are trackable by the Uber server's connection to the driver application… are recorded and saved forever… this includes the vehicle's GPS location.
Uber support can look at any past trip record and, for example, see that the driver accepted a trip request but never drove in the direction of the passenger's pickup location. Yes the passenger, and not the driver, cancelled the trip request… but the passenger only did that when it was clear the driver was not coming to pick them up.
The trip record will back up the passenger’s story and I’ll wager a negative mark is recorded in the driver's profile with support… Uber might not take any action the first time or even the second time… but the support record of the refunded cancellation fee will also be saved forever.
Drivers attempting to “game the system” to collect cancellation fees are violating the terms of their contract with Uber Technologies Inc. Performing these Uber driver cheats and frauds are just short-sighted behavior since they jeopardize the long-term income stream that driving for Uber represents.
A driver might “get away” with cheating for a long time then be surprised when support decides to permanently deactivate them from the Uber driver application… meaning fired forever.
When I was growing up my dad told me that as an employee it’s a good practice to always do a good job… be the employee willing to work on a Saturday or work extra hours to complete an important project.
Dad said: “When it comes time to reduce staff you want to be the employee the company does not want to be without.”
Rideshare driving is not a traditional job and driver’s don’t have direct supervisors but that doesn’t mean the company doesn’t know what you are up to or that drivers can’t suffer consequences from their actions.
Keep in mind that the Uber driver application is GPS-enabled and it is recording all events that happen within the application. Each event is tagged with a timestamp and GPS location and then archived for future analysis if needed. Uber has all the data it needs to uncover fraud if it is suspected.
My point is “gaming the system” might seem like a good idea and may even mean more money in the short-term… but being permanently deactivated means no more income from Uber driving… doesn’t seem worth it to me?
How much money are we talking about?
A single Uber cancellation fee paid to the rideshare driver is not a lot of money, around $4.
Passengers are charged a fee when they don’t show up to the driver’s vehicle on time or cancel a trip request more than 2 minutes after the Uber driver accepts the passenger’s request.
“ON TIME” = For private trips the passenger must enter driver’s vehicle 5 minutes or less after the driver arrives at the pickup location. For shared trips (like Uber Pool & Lyft Shared) passengers have 2 minutes to arrive at the pickup location shown on the passenger application map.
Drivers can choose to wait longer but they cannot earn an Uber cancellation fee for a passenger “No Show” unless they wait for at least the defined timeframe.
For Lyft and Uber, the cancellation fee charged to the passenger is about $5… the exact amount varies from city to city.
With Uber cancellation fees drivers receive about 75% of the $5. Lyft passes the whole cancellation fee to the driver.
So, for a single cancelled trip, drivers are not earning a lot… about $4.
How often do drivers earn legitimate Uber cancellation fees?
In my experience the circumstances required to earn a legitimate cancellation fee don't happen very often… I’d guess on average 2-3 times per week rideshare driving full-time hours.
A driver who earns a statistically higher number of Uber cancellation fees compared to the average ridesharing driver will stand out if support has reason to look… this scrutiny from support could happen when a passenger complains.
Why are cancellation fees a problem for Uber?
Ridesharing drivers gaming the system for more cancellation fees apparently happens often enough that Uber is beginning to take notice.
Uber earns part of the cancellation fee so unless passengers complain, there's no business reason for Uber to explore the problem and look for solutions. Cancellation fees represent a small, but steady revenue stream for Uber Technologies Inc.
I suspect that Uber drivers cheating the system are seen as a customer satisfaction issue which is the key reason in the referenced article Uber says they are taking action:
“An Uber Australia spokesperson told Mashable that instances of drivers gaming the system represent a ‘minute portion of all trips,’ and that it's looking into a solution to the issue.”
Passengers want a driver to pick them up and aren’t going to be happy if they believe they were in the correct location, the driver never showed up, and they were charged a what they believe is an illegitimate cancellation fee… as if they (the customer) had done something wrong.
Instead of getting smooth transportation from where they were to where they wanted to be the passenger has to request another ride and they believe that they were inappropriately charged a fee… not a happy customer.
Why do some Uber drivers cheat the cancellation fee system?
I guess earning $4 a few times every “shift” could add up… but the cancellation fee is approximately the same as the smallest fare a driver earns (called a Minimum Fare Trip) in most cases a driver will earn more income actually taking a passenger where they want to go.
I suspect some of the drivers gaming the system or committing outright Uber driver fraud in order to collect cancellation fees rationalize what they're doing because they believe they are generally-speaking underpaid… more on this point in a minute.
Gaming the system and legitimate cancellation fees
From the referenced article:
“Uber is looking into a solution for a small amount of drivers who reportedly game for cancellation fees.”
There are legitimate reasons for passengers to be charged an Uber cancellation fee:
“…some reasons for cancelling include when passengers take too long to get in the vehicle, when riders are inaccessible (within a gated property, for instance), or when the rider is trying to hail [get picked up] from an illegal area, which could result in fines [for the driver].”
I’ve been completing Lyft and Uber passenger trips for almost 4 years and I’ve gotten really good at finding passengers even when the driver application directions don’t take me to exactly the right place. Gated communities can be a hassle but likely as not I can follow another resident into the complex or just call the passenger and ask for the passcode.
Almost always I would prefer to give a passenger a ride compared to receiving a cancellation fee of less than $4. As I've said I'll probably earn more than $4 for the trip.
How do ridesharing drivers generate false cancellations?
From the referenced article:
“There have been other reports of similar tactics, which include messaging passengers to cancel rides, or driving far away from the pick-up location.”
The goal of the driver gaming for cancellation fees is to get the passenger to cancel 2 minutes or more after the driver has accepted the passenger’s trip request.
If the driver cancels a passenger trip request, they will not earn a cancellation fee unless:
- The driver's vehicle is at the pickup location displayed on the driver application map
- The driver waited the appropriate amount of time
- The passenger does not show up
I'm sure there are 19 or more ways drivers do things hoping to earn a cancellation fee including simply sending the passenger a text message asking them to cancel the trip request.
From the stories my passengers have told me I suspect one of the most common ways applies to drivers who complete passenger trips for both Uber and Lyft.
If I accept an Uber passenger trip request, I immediately turn the Lyft driver application off so I will not receive Lyft requests until after I complete the Uber passenger trip.
I found a quote in this article reporting what a passenger might see in the passenger application when a driver accepts a trip request they have no intention of completing:
“Genter [the customer] didn’t respond and watched the driver [by watching the driver's vehicle moving on the passenger application map], who was already at the airport, presumably pick up someone else on another ride-hailing app, and then drive all the way to downtown Paris. All the while, the Uber app indicated that the driver was still on his way to pick up Genter, despite the expected arrival time growing from 9 to 23 minutes away.”
Legitimate reasons for a ridesharing driver to cancel a trip
I've learned to cancel some trip requests after a phone conversation with the passenger.
Some passengers make unreasonable requests on the phone or are rude or sound disrespectful to me, rude on the phone means rude in my vehicle.
Some passengers who are not where they are supposed to be seem simply incapable of giving directions to their actual location… at least not directions I can understand.
In these cases I might cancel the trip request knowing I will not earn anything for my trouble.
It took a long time for me to come to the realization I accept passengers trip requests… accepting a request for a trip does not necessarily mean I will complete the trip.
I’d like to find every passenger, but my rule is the passenger has to work with me at least 50/50.
Are rideshare drivers poorly paid?
The article reference for this blog said something that frankly bugs me more than just a little:
“It's no secret that rideshare drivers are poorly paid, with companies taking high commissions from fares.”
I have frequently written about drivers pay in my weekly blogs and written a book on the subject titled: Driving for Uber and Lyft - How Much Can Drivers Earn?
In my opinion it's just sloppy reporting to say something like
“…It's no secret that rideshare drivers are poorly paid…”
as if everyone knows it's just a fact… most news articles might report poor driver pay but I’m here to tell you it’s not a fact… not even close.
The referenced article even provided a link to an article about driver’s “poor pay” and linked article reports that driver’s pay is going up not down… funny.
Check out my article on average rideshare driver income to get a better understanding why I have little to no sympathy for drivers who complain about earnings.
Granted it's not easy to find positive news articles about rideshare driver earnings but they do exist… for example the “poor pay” article linked in the referenced story quotes research suggesting that rideshare driver earnings have been steadily increasing.
“Findings from the Gridwise driver companion app brought in data from 500,000 rides from 2017 and 2018. The hourly average rate increased less than $3 to $16.66 this year, not taking into account inflation and before costs like gas, car leasing fees, and commission. But things are moving upward.”
One of the most popular ways news articles and drivers report decreasing earnings leverages the reality that over 10 years ago when is Uber and Lyft first went into business passengers paid approximately double what fares cost now.
The fares passengers paid were a lot higher but there were a lot less trips in the early days of Uber and Lyft. Currently drivers stay busier and as a result most drivers, on average, earn similar if not more income for their time compared to the early days.
Using this method is not a lie… it’s just spinning the facts and reporting about “per trip” income instead of average income over a block of time like a week, month, or year.
This is one of the reasons I offer the Rideshare Earnings Case Study (available by request). Only by looking at a driver’s earnings over time (over 2 years) can we get a meaningful look at what ridesharing drivers earn.
Enhanced Uber driver app technology may expose driver fraud
Uber reports they are addressing the issue of drivers collecting illegitimate cancellation fees (from the referenced article):
“We have an in-app Help section where riders can report issues around cancellation fees and we follow up with driver partners who regularly have cancelled trips. We are also working on an enhanced technology solution to further examine cancellations that will be rolled out in April."
I’m guessing the “enhanced technology solution” will be software code designed to highlight drivers who receive more Uber cancellation fees compared to the average and possibly track drivers who do not move toward passenger pickup locations in a reasonable amount of time.
Drivers should also understand that the text messages they send to passengers happen inside the application which means they are part of the trip history that is captured and stored forever.
My best advice to drivers is to just do what’s “right” and don’t behave in dishonest or fraudulent ways trying to “game the system.”