How is fraud changing for ridesharing apps?

Globally, ridesharing apps are taking over the taxi/cab industry. In the US, a quarter of customers use taxi/cab apps once a month or more, and UK users will reach 18.8m by 2026.

But with fast growth comes massive fraud risk. Not only is your taxi app a lucrative target, but your business is likely to rapidly outgrow your fraud prevention defenses, giving fraudsters a head start.

Let’s take a closer look at the wider challenges facing your industry and how they impact your fraud risks…

Demand for rides outpaces supply of drivers

Post-lockdowns in 2020, demand for ridesharing rebounded stronger and faster than taxi/cab apps anticipated.

Hygiene-conscious customers wanted alternatives to public transport to reduce virus transmission. And many public transport operations reduced their services due to staffing shortages. So ridesharing apps became a lifeline.

But drivers were scarce. There were 22% fewer on the road in Q1 2021 compared to the same period in 2020. During initial lockdowns, many drivers moved to food delivery marketplaces to find work. So taxi/cab apps had to offer record-breaking wages and incentives to win back employees.

Greater demand than supply meant customers faced surge pricing, long wait times and cancellations. In some major cities, the price of rides jumped a huge 79% compared to pre-pandemic.

This was damaging for the reputation of ridesharing apps, but also created a market for risky rides - if your customer couldn’t get a lift through your app they could turn to a fraudster’s site for service.

Driver fraud is spreading and it’s hard to stop

Driver fraud is a growing problem. It ranges from your drivers taking advantage of your incentives to those participating in organized crime schemes.

Driver policy abuse is spreading, as taxi/cab apps increase incentives to attract employees. The more bonuses on offer, the more drivers can gain from cheating the system. In China, some drivers found a loophole that meant they could triple their earnings!

You can’t blame otherwise good drivers for trying to make extra cash - most aren’t malicious fraudsters. And the last thing you want to do is limit your pool of drivers, so it’s a difficult problem to tackle. It’s also hard to detect. It could be happening to your business, you just don’t know it yet…

Ridesharing app accounts are the priciest on the dark web

Account takeovers are one of the biggest threats to ridesharing apps. Taxi/cab account logins are the priciest on the dark web, even more expensive than Netflix logins and credit card details. And as demand grows, attacks will only increase. Your business should be on high alert.

Read on for the latest statistics on how these top challenges and fraud risks are impacting your industry…

Source list

• Taxi/cab app projected market value
• 22% fewer drivers in the first quarter of 2021 YoY
• $250 million investment in driver incentives
• 79% jump in price of rides compared to pre-pandemic
• Driver pay jumped by 37%
• Drivers are earning more than $35 an hour
• Logins more expensive than credit cards or Netflix
• Ridesharing most revenue generated in China
• Number of UK users expected to reach 18.8m by 2026
• Taxi/cab app logins priciest on the dark web
• Drivers triple earnings