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Violent Crime In Brazil Pushes Uber To Rethink Cash Strategy

Modolo Filho was the first Uber driver to be murdered in Brazil — by two “teenagers” who had called for a ride to be paid in cash who went on to rob and stab him to death. Since his murder, police have confirmed at least six more Ubercides, with local press reporting more than a dozen.

And that is just the murders — a Reuters analysis of crime data in San Paolo indicates that Uber driver robberies have spiked since July, when the ridesharing service first began offering a cash payment option in the city. Though normally Uber requires the use of a credit card, Brazil is one of a few markets opened up for cash payments in an attempt to speed growth in the new market.

The strategy worked as a growth stimulant — growth did boom. But where there is growth, there is crime — and Uber driver robberies also shot up ten-fold, according to the data, from about 13 Uber driver robberies per month pre-cash payments days to 141 per month after. Assaults were also on the rise during the same time period — up by about 33 percent.

And those, local authorities note, could represent slightly lowballed numbers, since Uber is still fairly new to the area and attacks on drivers related to driving may not be registered in the system with a reference to Uber in the report. The cash policy has been a major incentive for criminals — it allows them to start false Uber accounts under fake name without credit cards to verify their identity and gives them an easy method to lure a (now cash carrying) driver to their location.

Uber has offered no direct details on ride growth in San Paulo but has acknowledged that there has been an uptick in “safety incidents.” Uber, when confronted with the evidence of the spiking crimes around the service, further noted that it is not clear if the cash policy is causing the spike — or if the increased popularity of the service in general is the issue. Sao Paulo operations grew by 15 times over the course of 2016, according to Uber.

The firm also noted that it is taking steps to make cash rides safer, such as verifying users with a commonly used social security number.

But Uber has been criticized for acting too slowly — and drivers nationwide have staged protests and threatened to quit if Uber does not take more proactive steps to reduce crimes perpetrated on its drivers. Uber has a massive stake in getting cash payments right in Brazil — as it seeks to expand out of developed markets where card-based payments are the norm.

As of today, at least 30 percent of its rides in the country are now paid in cash — and the rate is far higher in poor areas where credit cards are less common, according to two company sources. In the last few months, San Paulo has passed both New York and Tokyo in terms of rides completed in a month. But, that big growth has now been called reckless — as accusations that the firm overlooked high levels of violent crime as it rushed to grow in an unfamiliar market are becoming more pointed.

“If they’re worried, it’s a bit emotional,” noted Andrew Macdonald, general manager for Uber in the region, when asked last October about the concerns about crime in Brazil.

As of last week, Macdonald had apparently changed his mind, noting that his statement was “a mistake” and that Uber had been working on ways to improve safety around cash payments since fall last year.

He added the violence “weighs pretty heavily” on him and other senior management — a sentiment his October statement perhaps failed to make clear. Going forward, Uber cash users in San Paulo must register with a social security number known as a CPF.

“It would have been ideal for us to have gotten the CPF verification out sooner, and so we absolutely own that,” Macdonald said.

Macdonald added Uber was also looking at giving drivers the chance to opt out of accepting cash and a way to screen out cash users who behave oddly.

“This has been a priority for us since the end of last year,” Macdonald noted.

Of course, since Uber rolled out cash payments in Brazil the middle of last year — perhaps getting those priorities in order six months earlier might have saved some lives.

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