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Uber Scam?

Summary:
I'm a big fan of Uber. I'm in New York City this weekend and have had great success using it. The fares, though high, have been below the cab fares and the cars don't play those horrible ads that assault you in New York's Yellow cabs. Plus I had 2 good conversations with a driver from Ghana and a driver from India who's a Muslim refugee. I had something happen 2 hours ago, though, that makes me wonder. I don't know if this is a scam: thus the question mark at the end of title. I just wonder if it is and I wonder if others have had this experience. I walked in 14 minutes to a Chinese restaurant 2 long blocks and 13 short blocks away to get there by noon when it opened. I timed it perfectly and gave the

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I'm a big fan of Uber. I'm in New York City this weekend and have had great success using it. The fares, though high, have been below the cab fares and the cars don't play those horrible ads that assault you in New York's Yellow cabs. Plus I had 2 good conversations with a driver from Ghana and a driver from India who's a Muslim refugee.

I had something happen 2 hours ago, though, that makes me wonder. I don't know if this is a scam: thus the question mark at the end of title. I just wonder if it is and I wonder if others have had this experience.

I walked in 14 minutes to a Chinese restaurant 2 long blocks and 13 short blocks away to get there by noon when it opened. I timed it perfectly and gave the take out order. I wanted to get the food back to our hotel room while it was still hot. I didn't know how long the food would take and so I waited until it came out before I ordered an Uber. My strategy made sense, I thought, because when I got on Uber, it looked like only a 4-minute wait.

So when the food came, I contacted Uber immediately and it looked like that same 4-minute wait. The fare would have been only about $6.50. A driver named Mohamad accepted. Then Uber started tracing his path and it looked as if he was moving away. That might have made sense because of the way he might have been aiming along with all the one-way streets there are. But then the estimated wait turned into 5 minutes, then 6 minutes. Then a minute or two later, it turned into 8 minutes and he was clearly driving even further away. Had I been confident that it would have been 8 minutes, I would have hung tough. But I wasn't. I knew I could walk it in 12 minutes. So I cancelled and, of course, was told that there might be a small cancellation fee since Mohamad had accepted and was on his way. That made sense to me. But now it looks, from my credit card statement, as if the fee was about $12.

I'm not familiar enough with Uber to understand all the ins and outs to be sure that the $12 fee is for this and not for some other trip. It's just that there's no other trip I've taken in the last few days that would have had a fare that low.

So here's what I'm wondering. Are there some Uber drivers who will accept the trip and then reconsider and look for a better fare? Then they drive away, thinking that the customer might get fed up, as I did, and cancel. Then they get both the cancellation fee and the next customer, who probably is going further.

I'm asking this as a customer but also as an economist who wants markets to work well and who believes that they normally do. Is this a case where they don't work really well? Any insights from people who have used Uber a lot and have canceled at least a few times would be appreciated. Comments that are not informative or insightful will not be appreciated.



David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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