9 Comments

Summary:

An old hustle is more profitable thanks to Square’s mobile payment system, which some pedicab drivers are using to push rip-offs to new levels.

Pedicab, NYC
photo: Joe Ravi

Pedicabs are slow and silly-looking, but the bicycle-powered rickshaws remain a hit with tourists in New York and other cities. Unlike taxis, they are barely regulated — which means it’s easy for unscrupulous drivers to shake down passengers for exorbitant fares.

SquareWhile pedicab hustles are nothing new, the arrival of Square, which lets merchants take payments via a dongle and an app, mean the rip-offs are hitting new heights. In June, for instance, one driver charged a visiting Japanese couple $720 for a twenty-minute ride from New York’s midtown to Greenwich Village.

According to the New York Post, Square’s mobile card-reader makes it easier for dishonest drivers to demand absurd fares and to tack on fraudulent transaction fees that customers (late night drunks are a common target) discover much later.

“[Square is] helping these guys tremendously by doing this. It’s super easy to get an account and super hard for people who get cheated to find you again,” the head of the NYC Pedicab Owners Association, told the Post. A Square spokesman said victims can contact the company for details of suspicious transactions and that it shuts down accounts that engage in fraud.

So does Square deserve any blame for the pedicab rip-offs? It doesn’t appear so. Square has been aggressive about fighting fraud and requires customer confidence to function. The pedicab rip-offs are not the company’s fault, but instead just another example of how a new technology can benefit bad actors along with everyone else.

(Image by Joe Ravi via Shutterstock)

  1. akismet-9c3cb5e2b8fd566cffd91f24c9079a4f Monday, July 22, 2013

    But of course Square will get blame, regardless of caveat emptor. There are dozens of ways for a brand to diminish scams, but all of them cost in terms of adoption rate or overhead… PayPal, love them or hate them, has thousands of people working to extinguish this very behavior.

    I don’t think you can let them off the hook so easily. All you have to do is get scammed once for your perception of the brand to change forever, right?

    1. Financial services are very complicated. Easy and painless before you get critical mass and go mainstream……it is at that point that scammers focus on you. Most serious companies in this space spend a lot of money fending off fraud. Unless taken extremely seriously, it can be the end of any company…..Square beware!

  2. paddyglover Monday, July 22, 2013

    Why the heck is the media always trying to demonize pedicab drivers? Like in any industry, you’re going to have bad apples. Cab drivers are well-regulated but you still have drivers who rip people off.

    Articles like this are destroying the lives of people who just want to make a living by adding burdensome and costly regulations to guys and girls who don’t make a lot of money to begin with. Stop it.

  3. armenia4ever Monday, July 22, 2013

    Anyone who pays more than a 100 dollars for a pedicab ride needs to point the finger at themselves.

    Passing “regulations” for an industry like this is a rather poor way to address the issue. Customers should simply do what one usually does before a transaction – find out how much it costs. If the pedicab tries to scam or tack on extra “fees” at the end of the ride, simply refuse to pay them.

    1. I’m not so sure. Midtown to Greenwich Village for a pedicab is a brutally long push. Maybe it is even worth $720.

      1. For some people, perhaps. If you agree to that fee ahead of the ride, then its your own fault if you feel you paid too much.

        I personally would never pay anything like that, but that is just me.

  4. So, because of some rip off, square is closing all accounts related to pedicab services.
    This is another just another bad services coming form ‘Square’, they should know that no all pedicabs driver are not a rip off and some people are honest hard workers.

  5. dreamkeepers Tuesday, July 30, 2013

    Square is a ripoff… They took $435.00 of my money gave me the run around and kept it in the end… I’m an honest seller and work hard for a living… Companies like square haven’t helped their customers like us… They ask for endless proof which I gave them, no customer service, scripted replies only to keep the money in the end. The merchandise gets delivered to the clients I have giving them endless proof of that, they never giver proof to why they keep the money and never give straight answers… How can they get away with this? I’m not the only one they have done this to. My research has shown others with the same issues. What can we do to protect ourselves from this happening again?

    Veronica Ahlfeld/Chicago

  6. This article is misleading and libelous. The article states clearly that Square’s existence causes rip-offs to hit new heights. This is not true, and is damaging to Square. The existence of mobile payment providers may make this easier, i.e. Intuit GoPayment, PayPal Here, Square, and others, but it’s absurd to place causation of fraud on the payment processor.

    The article is also a non-issue. So a merchant makes a fraudulent charge to your credit card. Call up your CC company and have it reversed. End of story.

    I am an opinionated business owner and applaud Square for their innovative and disruptive approaches to payment processing.

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