Travel guru The Points Guy is breaking up with Uber, he announced in an outraged blog post on Sept. 12. “I’ve been a loyal Uber user for seven years now,” he writes. “So loyal, in fact, that I have spent $81,600 on my business Uber account over the past three years. In 2018 alone, I forked over $33,812 to Uber through my business account.”
$33,812! With a little more than three months left in the year, that implies The Points Guy has spent a rough average of $130 a day on Uber this year, which, frankly, is insane, and more than the cost of an unlimited monthly subway pass in New York. (The Points Guy’s real name is Brian Kelly, and he and his eponymous website advise readers on the best credit cards, travel hacks, and ways to accumulate airline miles and points.) But that’s not what has him breaking up with Uber. “The way Uber’s thanked me for my loyal business is by scamming me,” he says. “So, the headline of this article isn’t overly dramatic. It’s a sad fact.”
The “scam” goes like this: Over the weekend, Kelly requested an Uber in New York City and was assigned a driver. But the driver never arrived and couldn’t be found at the location shown on Uber’s map. The driver didn’t answer any calls from Kelly and so after several minutes of waiting he gave up, cancelled the trip, and was charged a $10 cancellation fee. (Based on images shared in Kelly’s blog post, he also tried to get an Uber to go two blocks on a busy section of Fifth Avenue in Manhattan’s Flatiron District, the equivalent of a two-minute walk.) Kelly later complained to Uber, which refunded him the cancellation fee.
It turns out many people have had an experience like The Points Guy’s, and not just because they tried to get an Uber to go two blocks. These problems are particularly common at the airport. Something is off, but it’s not a “scam” like The Points Guy says. The problem is that Uber rides are too cheap.
Drivers only see where they’re going after accepting an incoming ride and starting the trip. They earn a cancellation fee when the rider takes more than two minutes to cancel, or if the rider takes more than five minutes to come to the pickup spot (in which case the driver can cancel). Drivers keep 75% to 80% of the cancellation fee, depending on when they started driving for Uber, and the company encourages drivers to maintain low cancellation rates.
Why would a driver try to get their rider to cancel? Probably if collecting the cancellation fee seemed like a better option than doing the trip. This might happen, for example, if a rider is going a short distance but the driver has to travel a ways to pick them up, or if the rider is heading to a neighborhood where the driver thinks he or she is unlikely to get another pickup. At the airport, a driver who’s been waiting in line for a long time might prefer a cancellation fee to losing their place in line for a quick, cheap fare. Uber has tried to remedy some of these problems, with premiums for “long” pickups and a feature that lets drivers who take a short airport trip jump to the front of the queue when they get back.
“There are a lot of issues like this at airports because drivers have to wait in a digital queue for up to an hour for a ride,” Harry Campbell, author of the Rideshare Guide, told The Points Guy (the website, not the person) in a companion piece published today. “The most typical thing that you’ll see with drivers at airports is them calling for your destination. And the reason they do this is because they don’t want to wait in line for an hour and then get a short 10 or 15 minute ride, they’re hoping for a nice long one-hour ride.”
A driver named Andrew told MarketWatch in August that drivers tend to opt out of trips they worry won’t pay enough. “No one wants to turn down a ride, but you’re pretty much forced to sometimes,” he said, adding that drivers prefer to induce riders to cancel, to avoid being penalized for having too many cancellations.
I’ve had similar difficulties trying to get a ride with Lyft in Brooklyn. One time, multiple drivers accepted my request and then never showed up, probably because the fare was less than $5. I was forced to cancel the trip. Another victim of low fares was an airline pilot named Darryl, who in April ordered a Lyft in Hermosa Beach, California, and was kicked out by his driver midway to Los Angeles International Airport. The driver told Darryl that the trip, which would pay $6 but take nearly an hour from start to finish, wasn’t worth his time. (He was also the second driver assigned to Darryl; the first accepted and then cancelled.)
The ride-hail market is complicated (more on that here) so it’d be oversimplifying to say raising fares would be a quick fix. But insofar as the Uber “scam” that scared off The Points Guy is happening systematically, part of the problem is clear: the rides drivers are cancelling are just too cheap.
This post was updated to clarify that drivers see a destination after accepting a ride and starting the trip.