Uber passengers across China began encountering drivers with haunting, distorted profile photos designed to frighten them into canceling their rides.

The "ghost driver" scam allowed drivers to collect cancellation fees without providing any actual service.

The ghost driver scam was devised by drivers across several Chinese cities including Beijing, Shanghai, Suzhou, Tianjin, Qingdao and Chengdu, and came to light in 2016.

How the Scam Worked

Drivers with distorted, unsettling photos on their profiles hoped to scare passengers into cancelling their rides and collecting a fee.

The drivers collected a few yuan for a cancellation fee, and if riders weren't scared off, the driver would accept the ride and terminate to collect a short ride fee before the rider even saw the car.

These "ghost rides" lasted less than a minute, with drivers charging customers between 8 and 15 yuan for a ride that never happened.

Passenger Reactions

Zhang Kun, a 24-year-old in Zhengzhou, told reporters a ghost driver appeared on his screen and he "was scared to death."

He said he would never use Uber again.

Chinese users complained on Weibo, asking "How did they get through screening with such profile pictures?"

The Economics Behind Fear

Uber's subsidy system incentivized drivers to maximize the number of rides rather than trip length.

Scammers could earn starting fees and subsidy cash on fake and cancelled trips while saving on fuel.

The strategy exploited the fact that 60 percent of Chinese people believe in supernatural elements like ghosts and spirits.

Company Response

Uber introduced facial recognition technology to match drivers' faces to their profile pictures and run periodic verification tests.

Uber asserted it had a "zero-tolerance attitude to scamming behavior" and refunded affected riders while removing reported accounts.

Uber eventually sold its Chinese business to Didi Chuxing in August 2016, with the ghost driver scam demonstrating that identity checks alone were insufficient to prevent fraud.