Two men were arrested on Wednesday and accused of trying to scam Uber using an app called “Screwber.”
Photo credit: Uber
Federal prosecutors in New York have charged two men with orchestrating a long-running scheme to defraud Uber, its drivers, and its customers by pocketing fake “surge charge” fares, part of which was through the use of an app called Screwber.
The FBI arrested Eliahou Pardier, 52, of Queens, and Carlos Arturo Suarez Palacios, 54, of Brick Township, New Jersey. Both appeared in Brooklyn federal court on August 28 and were indicted on charges of wire fraud and money laundering conspiracy, which carry a maximum sentence of 40 years in prison each.
The pair are accused of selling their “Screwbar” app, pre-installed on hacked smartphones, to 800 Uber drivers. The app allowed drivers to see a customer's destination and fare before the trip, allowing them to accept only the most profitable fares. The pair sold Screwbar for a one-time fee of $600 and a monthly subscription fee of $300.
And a so-called “Fake GPS” app allowed drivers to “fake” their location and accept trips with surge fares before closer drivers. The app also allowed drivers to pretend to be in line for a ride before actually arriving at the airport, skipping the virtual queue.
Federal investigators allege that the phones they distributed had older versions of the Uber app installed, which allowed them to go undetected when other apps were being used.
All told, Pardier and Suarez, who likened themselves to drug dealers in the messages, are alleged to have made about $40 million in illicit profits from the scheme over a six-year period from 2018 to last month.
“As alleged, the defendants attempted to corrupt the ride-sharing marketplace and enrich themselves at the expense of unsuspecting passengers and hard-working, law-abiding drivers,” said Breon Peace, U.S. Attorney for the Eastern District of New York. “This indictment has taught the defendants an important lesson: there is no such thing as a free ride.”
The federal government has identified the victim company only as “Ridesharing Company 1,” which it describes as “a multinational corporation headquartered in the United States that provides ridesharing services.”
Asked for comment, an Uber spokesperson confirmed that it was the company in question.
“The alleged fraud committed by 800 bad actors has not only taken money from hard-working drivers' wallets, but has also forced ride-sharing companies to further restrict employment opportunities for tens of thousands of TLC drivers,” Uber spokesman Josh Gold said in a statement. “We appreciate the government's efforts to bring these bad actors to justice and we fully support law enforcement in their investigations.”
The misconduct contributed to a decline in Uber's “utility rate,” which is the ratio of a driver's total time online to the time they are carrying passengers. Because Taxi and Limousine Commission rules require Uber and Lyft to maintain certain utilization rates, Gold cited the misconduct as one factor in a recent increase in driver “lockouts,” when workers are unable to access the app and therefore unable to earn fares or, ultimately, make a living.
The city recently reached an agreement with Uber and Lyft to temporarily suspend hiring of new drivers to reduce the incidence of lockouts and keep utilization rates to TLC standards, but driver's groups have criticized the solution as being too lenient toward the ride-sharing giants.
Both Pardier and Suarez have pleaded not guilty to the charges and were released Wednesday on $210,000 bail each, according to the U.S. Attorney's Office for the Eastern District of New York.