December 12, 2019 - Over the past year there have been a variety of reports about bad experiences from passengers who climbed into rideshare vehicles. In most cases that means Uber of Lyft, but there are actually many more operators around the country that are just in certain markets. As we started looking at the issue from the standpoint of protecting passengers, we discovered that it isn't just passengers that need protecting. In fact, there is a black market operating in the gig economy involves fraudulent accounts and identity theft, and is impacting both drivers and passengers. Here is what you need to know.

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The drivers used by rideshare companies are independent contractors. California is trying to change that, making them employees, but that quest is most likely to result in a lengthy court battle; the outcome of which is very uncertain. Because they are independent contractors, the companies don't have to follow all US employment laws for drivers. No I-9 is required. And the possibility of someone being able to create a false identity in order to drive for these companies is very real.

To be fair, all of the rideshare companies we're familiar with do require driver background checks. But a well-constructed false identity is likely to be able to overcome such a check and we're aware of circumstances in which identity theft has resulted multiple accounts being created using a single driver's name.

We've also been able to find out that there is a black market for driver accounts. That market includes having multiple cars on the same account, each being driven by a different driver. And it includes driver accounts that are rented out to the highest bidder. Those rented accounts are then used by the person renting them to pick up riders even though the drivers have never gone through a background check.

There is also a black market for rider accounts that involves selling legitimate accounts that have been breached. If used quickly, those accounts can be used to get a ride. A ride that is never going to get paid for and which either the company or the driver is going to get stiffed on.

These issues are also compounded by the fact that the rideshare companies don't appear to be sharing any information even when criminal activity is involved. This makes it possible for both drivers and riders who have been banned on one platform for criminal activity to move over to another platform.

There are certain things that riders and drivers can do to protect themselves.

When hailing a ride, the very first thing to do is check the license plate of the car that is picking you up. Both Uber and Lyft share this information with riders in the application. Then you should compare the picture of the driver in the app with the actual driver behind the wheel. And finally, the driver should know your name and you should know his. If he doesn't say it to you then ask, "What's my name?" And you should call the driver by his or her name as shown in the app. By the time you get through all of that, both the driver and passenger can be pretty sure that the ride is legitimate.

While all of that is just fine, there are some things that the government should look at requiring here too. The gig economy doesn't just involve rideshare companies. There are other companies like TaskRabit, Tasker, Rover, Wag, Freelancer and a variety of others that sell everything from on-demand services for home maintenance to website development. Again, most of the companies behind these sites require some form of background check but none of those checks are anywhere near as comprehensive as those required by employers. That really needs to change. It is time to start requiring comprehensive background information that can reduce or eliminate the possibility that when you hire someone in the gig economy, you are hiring someone using a fraudulent identity.  

by Jim Malmberg

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