On a drizzly afternoon in London, my limousine driver is a handsome young Romanian in a shiny grey suit who doesn’t look surprised when he asks where we’re going. I tell him we’re going nowhere in particular.
Does he get many rides like this? “Many, many,” he smiles. “People are doing it all the time.” While the U.K. economy is said to be picking up, particularly in the capital, few Londoners are so loaded they’re hailing limos just for the hell of it.
James (whose name has been changed) said he decided to go to south London in a limousine purely on a whim yesterday and was rather disappointed with the experience. So he took another limo home. Hours earlier, Jim had posted a link on Facebook giving away free taxi rides as part of a “pyramid scheme that pays out.”
Jim and thousands of other Londoners have been taking an oil refinery’s worth of rides, up to the value of up to £1,000 per person, all courtesy of the application Uber. But the American firm hasn’t been hacked by a group of small-time scammers abusing the site’s promotional codes. The truth turns out to be the opposite. And we’re the ones being taken for a ride.
Uber’s deep-pocketed investors—Google Ventures, Goldman Sachs, and Ashton Kutcher—are picking up the tab.
Each time a friend uses the referral code, they also receive a free ride
Uber is trying to muscle its way into the £3 billion London cab market—already snapping with Hailo, Kabbee, and other mobile apps—with a monumental drive for new users. Founded in San Francisco, Calif., by the StumbleUpon cocreator Garrett Camp in 2009, the app now operates in 26 countries and four continents, with many of its customers being snared by the aforementioned “pyramid scheme.”
Since Uber launched in London in 2012, thousands of the city’s residents have been downloading the app onto their smartphones. Each new user receives £20 free credit to begin hailing taxis in three price brackets, ranging from the utility ‘Uber X’ cars to the kind of Mercedes saloon that picked me up, which starts at £14 a ride.
Each time a friend uses the referral code, they also receive a free ride, and the referrer gets another £20 to spend. The deal is so tempting that, while I have never knowingly posted a promotional offer on Facebook, I shared my Uber car code because every person who uses it and takes a free ride will effectively credit me with another £20 of cruising.
By sharing my code, I hoped there would be at least one person to take up the offer, so I could return home from my sojourn in style. When we reached the end of my road, there were still no takers. The drizzle had turned to rain.
While Uber head office won’t give a number of people using the referral codes, it says the campaign, which was supposed to end in January, has been so successful it has been allowed to continue. The Uber app now has more users in London than any other city outside the U.S.
It’s no surprise that people have been accruing large tanks of free riding time in the U.K. capital, with many customers topping £500 in credit from friends signing up. And it’s not all being used frivolously. Between them, barman Jesse Cannon and his brother have taken plenty of rides to and from work.
“When I finish my shift, it’s kicking out time for most of the bars in the area and public transport can be a bit of a chore, so I use it to get to my girlfriend’s house,” Cannon said. Once the free credit runs out, he said he’ll probably use the service again because it’s reliable, easy to use, and the cab drivers seem happy with the arrangements.
With Uber it’s just me and luck
The scheme is so popular that a black market has already formed. On the MoneySuperMarket forum, one user (dave111) sold his referrals in return for a £5 PayPal deposit. Cabbies seem to be happy with the deal they’re getting, even if the new users riding with free credit are effectively creating a bubble that could burst when Londoners run out of free credit for rides.
“Uber gives me flexibility so I can start when I want,” said my limo driver, Florin, a 26-year-old from Romania who signed up for the app 10 months ago. “The best thing is there is no controller, just me and my customer. A controller would have a favoured driver he would give the best jobs to. With Uber it’s just me and luck.”
Florin isn’t particularly lucky to have me in the back of his Mercedes, whose back seat comes—like many of Uber’s cars—with a stash of chocolates, bottled water, and a box of tissues, for what purpose I don’t ask.
About 15 minutes in, I ask Florin the charge, since there is no meter. He says we’re probably approaching £20 and therefore I’d probably better get out if I don’t want my card to be charged.
When I jump out at the traffic lights just past High Holborn, Google Maps reveals we travelled two-and-a-half miles. I’m still in the same borough I started in, and since I left my card next to my PC while I was registering, I have to wait for the bus in the rain.
My account says nobody has used my code, so I still have £2 credit with Uber. It’s a shame I can’t use it on the bus.