March 04, 2017
SÃO PAULO — They're sitting around a small table, shoes and shirts off, playing cards. Who's going to be the lucky winner? And who would have wasted their day? Unfortunately for the players, their card game isn't the subject of this report.
The cards are just a distraction for these Uber drivers, who sometimes wait for up to 12 hours for customers at the São Paulo–Guarulhos International Airport, where an average of 370 flights land daily. Hundreds of cars wait in three areas near the airport each day: one stretch of land behind a hotel, in the streets of a nearby neighborhood that has social housing, and in the parking lot of a public hospital.
Paulo Diniz, 38, became an Uber driver a year-and-a-half ago. On a recent Tuesday, he arrived at the field behind the hotel at 6.15 a.m., hoping to get a customer who would make his day, and the wait, worthwhile. On his smartphone's screen, the app indicates his position in the virtual waiting line. It reads "+200." This means there are at least 200 drivers ahead of him. He'll have to wait his turn to get a customer. "I could be number 201 or 500. The app only shows this +200 at best," he says.
At 7 a.m., Cristiano Gomes, 37, reaches the site and parks his car. His screen shows the same number as Paulo's — +200. He takes off his shoes, lowers his seat and sleeps. Others come later, like 23-year-old Yuri Pinho, who doesn't show up until 10 a.m. When he does, he walks directly to the playing table.
Is the wait worth it? Well, it depends. Financially, it may or may not be worth waiting the whole day at the airport. When drivers park in the "waiting areas," they dream of long journeys into São Paulo state or to cities in Greater São Paulo — rides that would bring in more than 100 reais ($32) net — Uber keeps 25% of all costs.
"I once took a passenger for 140 reais," says Carlos Pavoa, 22, as he eats a meal from one of the food places that opened here after the waiting area had developed. "But the other day, I waited for six hours to, in the end, drive someone for just 22 reais ($7). I was pissed off," Yuri says.
That's the risk. You can be very unlucky and wait for hours until, finally, your turn comes for a short, and not very lucrative, ride. Journeys to central São Paulo, for instance, are of little interest to drivers, who will earn 35 reais on average. Those who think it's still worth the wait argue that, as long as they're parked, they're not spending any fuel. When a good ride comes, if it comes at all, it makes up for the time lost waiting.
"If I drive in the center of São Paulo, I use a lot of gasoline for rides worth just 10 reais," says Paulo Diniz. "Here, it might take time before I can earn anything but the overall cost is lower." By midday, the app finally shows a different number on his screen: between 180 and 190 (again, his exact wait in line isn't shown).
These Uber drivers have come up with strategies to limit the risks of bad luck. Before deciding whether to take a ride, most of them call the user and ask for their destination. If they consider it too much hassle for too little money, they either make up an excuse about a problem with their car or they simply stay put. It's a way of pressuring the customer, who's looking to move quickly, into canceling the ride. That way, the driver doesn't have to do a short and cheap ride, he doesn't lose his spot in the waiting line and he doesn't suffer a dip in his approval ratings. It doesn't even affect his own cancel ratio on the app.
This report was able to confirm twice over the last few days that this strategy is sometimes used. In one of these two cases, we requested a ride to the city center from a street near the airport. The driver called and asked where we'd be going. He called back after a few minutes, saying, "It's gonna be a while until I get there. If you want to cancel..."
Drivers who live near the "waiting areas' complain that they hardly get any requests. Any Uber driver automatically ends up in the virtual waiting line as soon as he enters these areas. Since drivers waiting here don't usually accept calls from people who aren't at the airport, it's a source of prejudice for both local drivers and customers.
I'd already lost the entire day so I accepted
Contacted for this report, Uber said it has reduced the waiting area near the airport to make it easier for local residents to be able to request the service. The company says it can't change the wait time and sends messages to drivers telling them "it's not worth waiting for hours." The ride-hailing service also says that 45 drivers have been "deactivated" this week alone for having cheated.
While they wait behind the hotel, drivers play domino or card games. They use toilets for 1.50 reais. A tap in a nearby park provides them with drinking water. At night, a new shift starts for those who prefer to wait for the early morning flights. Some prostitutes also come here to work.
It's now 3 p.m. on Tuesday afternoon and Paulo Diniz has almost reached position 40 in the virtual waiting line. Cristiano Gomes, who had taken a nap in his car, is in the 80s. For Yuri Pinho, however, the app still shows the position +200. An hour-and-a-half later, Paulo finally gets a call from a passenger. He's been waiting for more than 10 hours. The user wants to be driven to western São Paulo. "I thought about refusing, but I'd already lost the entire day so I accepted," he says. For that ride, he'll earn 80 reais ($25).
Cristiano only gets a call at 7 p.m. after a 12-hour wait. His ride earns him 50 reais ($16). "What do you wanna do? We don't get to choose..."
As for Yuri, who parked behind the hotel at 10 a.m., it's 9:54 p.m. when he sees that he is finally among the first in line. He's hoping for a good ride.
Bad luck. The app crashes.
When Yuri manages to relaunch it a minute later, he's back at the end of the line. The next day, on the phone, he explains how he reacted. "My friend, I wept like a child."
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It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
October 27, 2021
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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