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Drivers arrested for ride-hailing app fraud in Shanghai
Staff Reporter 2015-10-11 15:16
A taxi-hailing app on a smartphone in Taiyuan, Shanxi province, Jan. 20. (File photo/CNS)
Shanghai police recently arrested four people allegedly involved in fraudulent transactions on a mobile ride-hailing service in the first such case reported in the city, according to local news website the Paper.
Police said the operator of Kuaidi ONE, which offers high-end chauffeur services, reported on Aug. 25 that it suspected some drivers were logging fake transactions because their names were appearing as customers.
By creating fake transactions, the drivers were able to claim money from Kuaidi ONE, which pays its drivers the fare from the passenger and a subsidy.
Police investigators found that one driver, identified only by his surname Dong, had logged several fake transactions between February and March using a customer account in his own name and had pocketed over 30,000 yuan (US$4,725) in fraudulent commissions.
Dong later told other drivers about his scam and created a fraud ring that would log fake transactions for each other via the instant messaging app WeChat, police said.
Four suspects have been arrested, according the police, who estimated illegal gains of 160,000 yuan (US$25,200) among the four since February.
It is common for divers working with ride-hailing services in China to create fake transactions, the Paper said, quoting an industry insider as saying that one would be a fool not to do so.
The number of suspected fake transactions reportedly has jumped since July, when several ride-hailing services reduced or discontinued subsidies for drivers, the report said.
The subsidies were lowered from 3.5 times the actual fare to as little as 20% of the fare, according to media reports.
Ride-hailing app operators are now suspending the accounts of users suspected of fraudulent practices, while Shanghai police have vowed to launch a campaign against such illegal activities.
