Why Implement Anti-Fraud Technology in Your Ride-Hailing Business: Real-Life Results
Published: 2020-01-29 10:55:46

The increasing use of technology affects consumer behavior and ultimately business approaches. With more and more businesses shifting their business operations to digital using the latest technological approaches, the market competition is increasingly becoming difficult to overcome. However, with the facilities the technology provides, also comes certain hurdles that businesses have to overcome to keep running successfully.

## Security Concerns: Increasing Digital Threats for Businesses
Global cybercrime is estimated to cause the damage of [6 trillion dollars annually by 2021](https://cybersecurityventures.com/hackerpocalypse-cybercrime-report-2016/). Businesses of today are suffering from the threats of security breaches that can lend them in a great loss if not kept at bay. The most prevalent type of crime is information theft, loss or attack that happens over the business organizations. And ride-hailing is no exception from the list of all. 

The introduction of the on-demand business model through ride-hailing solution Uber has caused revolutionary changes in traditional ride-hailing methods and now the global ride-hailing market has reached [183,677 million dollars](https://www.statista.com/outlook/368/100/ride-hailing/worldwide). Also, [Statista](https://www.statista.com/outlook/368/100/ride-hailing/worldwide) suggests, the number of users availing the ride-hailing services from any of the providers has surpassed the height of 996.7 million users. Therefore, the ride-hailing market is growing by leaps but so are the security threats around it.

## Threats to Ride-hailing Businesses: Information Loss and Identity Theft
Ride-hailing businesses of today prefer to use mobile app solutions that can offer the convenience of asking for services from any time to their users. Also, looking at the global popularity of mobile phones ([5.13 Billion users](https://www.bankmycell.com/blog/how-many-phones-are-in-the-world)) and the excellent usability of mobile applications this decision is righteous to take. However, the problem does not occur on the user side- i.e., through the mobile applications but rather it starts from the system within.

Ride-hailing businesses connect the drivers with possible customers through their platform as the customer can get their ride and drivers can earn money by completing it. However, this system requires the customer and the driver both to sign up/register for the app solution to use it. Therefore, the database contains the data of all the registered users who are actively using the app solutions and availing the services. However, identity theft occurs during these periods only.

Security threats and frauds are two different aspects. While security threats do harm to the organization's reputation, their users and their systems entirely, frauds are majorly responsible for causing unnecessary spendings by ride-hailing businesses. The primary ways of fraud occurrences in a ride-hailing business are:

1. The frauds occurring through identity thefts. The fraudster uses the identities of users who have quit the system but their id is still active in the system. The fraudster displays the id as active and completes the trip target only to earn incentives and the regular fare being paid to drivers.

2. Using the driver account from the system, the fraudster finds out a way to cheat the GPS system and shows records that leads the system to conclude that he/she has completed the ride targets and earn incentives and also the ride fare even though they have actually not completed it.

During 2015, Uber came to realize that there were almost 10% fake bookings happening around China which later came out to be [30% to 40%](http://europe.chinadaily.com.cn/business/2015-07/25/content_21405235.htm) of all in a news report. Also, a search for Uber on a leading e-commerce website of China gave up [200,000](https://www.techinasia.com/report-millions-ubers-china-rides-faked) results for the fake accounts. And the increasing number of frauds and possible security threats pose a serious problem for ride-hailing giants.

Therefore, it becomes mandatory for businesses to implement all the possible solutions that can reduce the possibilities of threats and fraud while also ensuring their ride-hailing services keep on serving customers efficiently. However, the primary entity being harmed here is drivers.

If any fraudster gets matched with a real driver, they often cancel the trip which significantly impacts the driver's performance record. And they might miss the chance of earning incentives and also it concerns with their bonus. Therefore, to give your drivers complete safety from the frauds, ride-hailing businesses should start implementing better strategies and software that can lead to catching the frauds and save their actual users from possible security threats.

## Machine Learning and AI as Anti-Fraud Technology
While artificial intelligence is gaining control over the business market, the applications of AI are not hidden from any. Also, the continuous research in the same field leads to the invention of better solutions that serve users efficiently and ensure the business operations are streamlined. And the contribution of AI in improving the security of businesses is significant enough to convince businesses of their profits when they choose to go for solutions built on the base of Artificial Intelligence and Machine Learning.

A report published by Zion Market Research indicates the growth of security solutions based on AI to reach [30.9 billion U.S. Dollars by 2025](https://www.globenewswire.com/news-release/2019/08/28/1907655/0/en/Artificial-Intelligence-AI-In-Cyber-Security-Market-Will-Reach-to-USD-30-9-Billion-By-2025-Zion-Market-Research.html). It also proves that AI is rapidly penetrating the cybersecurity schemes and market where solutions are built with artificial intelligence and machine learning algorithms are used to update the security criteria and ensure maximum possible protection.

While many ride-hailing businesses are still in a deciding phase on whether to implement a security solution in their system or not, Grab taxi, a leading Southeast Asia ride-hailing business has already taken a step forward and is earning profits and recommendations simultaneously with their excellent solution by their side.

## Are There Faults in the Ride-Hailing System?
One of the possible reasons for fraud occurring can be the faults and loopholes present in the existing ride-hailing system in use. Therefore, thoroughly assessing the system and searching for all possible loopholes is necessary to prevent frauds from happening. Also, the increased demands for anti-fraud technology have led to improved features of ride-hailing that ensure the drivers are verified and also the ride-hailing experience is improved.

### Feature 1: Time Limit for Accepting/Rejecting a Ride Request
To reduce the chances of fake account handling the ride requests, the drivers can be permitted to respond to ride requests within a short time limit to ensure the ride request doesn't stay pending for more duration of time than required and also the fake users can be caught easily. The more ride a driver completes, the more incentives and bonuses he/she earns and also it prevents many possible frauds and introduces efficiency in the ride-hailing system.

### Feature 2: Set Driver App to Automatically Accept Requests
Using this feature, the driver app is set to accept requests automatically to ensure the driver gets to complete maximum rides possible in a day. This feature allows drivers to earn more incentives and bonuses by completing the targeted ride count. It ensures driver earnings are secured as per their choices and availability.

### Feature 3: Auto Offline and Driver Idle Alerts
Limiting the number of frauds and also to reduce the ride request rejection, ride-hailing businesses can introduce auto offline and driver idle alerts that automatically indicates a driver offline if he/she has not completed a ride or accepted a request for a certain amount of time. Also, before going offline, the driver is notified of the idle mode and drivers can manually switch it to online from their side.

### Feature 4: No Show Up Situations Handled Efficiently
During the situations when passengers do not show up or a fake account has placed a request and later no passenger boards the ride, drivers have to cancel the ride from their side and it might affect their weekly bonuses and completed ride targets. However, the system can be set to allow drivers to cancel the ride by following the reason of no passenger show up which does not impact their incentives and bonuses.

## Anti-fraud Technology for Ride-Hailing: How to Put Solutions to Use?
The most basic principle of security states and defines complete security with three different aspects:
1. Prevention
2. Detection
3. Action

Therefore, putting up with the security demands and requirements of ride-hailing systems, there are a vast number of solutions available in the market that delivers excellent control over business activities and also gets all the security concerns answered efficiently. 

### Prevention Oriented Tools
Finding out the situations during which frauds are most likely to happen, the prevention-oriented tools are used for preventing most frauds from happening by predicting the possible outcomes from observing the situations around and the user behavior. 

Using machine learning algorithms dedicated to finding out the possible patterns from available data, the risk of getting robbed off due to fraudsters can be minimized. The leading ride-hailing giants are already putting machine learning algorithms and available artificial intelligence-based solutions to use.

### Detection of Frauds
The next stage comes is of detection. Even if a fraudster passes the preventive tools without getting caught, the detection tools ensure that no fraud happens. These tools are efficient at detecting frauds and also are able to catch all possible types of frauds including GPS cheating tools and other more sophisticated methods that can leave a ride-hailing business in trouble. 

These tools also implement appropriate and required security concerns during the signup scheme to avoid the creation of any fake accounts and ensure the system only receives the right entries while not letting the fake one pass. 

These mechanisms can also be implemented in any ride-hailing system irrespective of their business scale. The business using a custom [software development](https://www.appemporio.com/software-development/) solution can use these tools to detect frauds on an early basis and eliminate the possible chances of fraud. The code of the solution can also be edited accordingly to map the user behavior and circumstances during ride-booking to predict the possible frauds in advance.
### Plans in Action
While both the detection and prevention tools efficiently stop most of the frauds from happening, the very minimal chances of the fraud occurrence can be entirely eliminated by putting appropriate business plans and fraud-detection operations and strategies in action. Supporting the steps AI and machine learning-based technologies are taking, manual operations can also be made efficient and effective enough to find out the possibilities of fraud.

While the most affected stakeholders can be approached to support the business in catching the fraudsters, it is also efficient as the drivers can be rewarded for their tips while keeping their incentives and bonuses running side by side. Consider the example of Grab taxi, who has successfully implemented anti-fraud technology in their systems and with the support of their drivers who are having a leading part in exposing some of the gang fraud activities and have efficiently terminated the risk of frauds in their ride-hailing system.

## Results for One, Responsibilities for All
Securing a ride-hailing business from possible frauds is the responsibility of all the stakeholders. The profits to be mounted and the benefits earned are for all as it provides security and ensures authorization. Securing a system requires collective efforts from all the stakeholders and also from the business as it requires them to implement newer technological solutions that efficiently secure systems.

While ride-hailing businesses are keeping an eye on the possible frauds and trying their best to save their profits, it is the responsibility of users also to look for and report any suspicious activities if they notice any when they hail a ride or provide their services as a chauffeur.

The responsibilities are the same for all and the results are ultimately beneficial for the business along with their users too. While technology is increasingly helping in catching up the frauds in any business system. Without compromising the ride-hailing experience for users, these solutions powered by artificial intelligence and machine learning ensure maximum productivity and assures excellent results. 

Whenever you choose to hail a ride through the app solution, never forget to upload your review and feedback to let them know if there are any possible faults in the system and report the suspicious behavior of any other user that may indicate a fraudster or an entire gang of them. Leave your traveling worries to ride-hailing businesses and get requirements answered on time. Happy ride-hailing!