Uber's new policy fines riders who are two minutes late

Don't order that Uber until you are 100% certain you are leaving

Ride-sharing giant Uber is piloting a new cancellation policy in New York City, New Jersey, Phoenix, and Dallas, TechCrunch reported. The policy reduces the amount of time riders have to cancel trips and the amount of time drivers have to wait before charging tardy passengers.

The pilot began last week, but was soon paused due to a bug. Uber expects to relaunch it this week, and run it for several weeks. If the policy becomes permanent, it will change two things: first, riders will have two minutes, rather than five, to cancel a trip without incurring a penalty. Second, if drivers wait more than two minutes for passengers to arrive, they can charge the city's per-minute rate for every minute waited. In other cities where the pilot program is not launching, passengers still have five minutes to get to their Uber before they are charged a no-show fee, and drivers cannot start the trip until they have arrived.

As Uber explained in an interview, this new policy doesn't change when riders are charged a cancellation fee. Drivers are free to cancel a trip at any point before a rider shows up, but even under the new policy they must still wait five minutes before charging a no-show fee. If drivers leave after waiting for four minutes, they will receive neither the cancellation fee nor the money accrued for two minutes of wait time.

The feature was built in response to drivers' complaints about waiting for passengers, Uber said. In a statement released to TechCrunch, Uber said that these updated terms would ensure that "the whole system runs more smoothly and the Uber experience improves for everyone." Reduced wait times and the ability to charge for idle time, as well as compensation if riders cancel after two minutes, obviously benefit drivers, earning them a few extra dollars and allowing them to move onto the next fare sooner.

But how this will make the passenger experience smoother is unclear. Traffic, wrong turns, and faulty GPS all contribute to making pick-up times unreliable. This can leave passengers out in the cold, waiting for drivers to arrive. Uber explained that if a driver is more than five minutes late for an estimated arrival, users can cancel the ride with no penalty.

Unreliability can swing in the other direction, too. Drivers may arrive sooner than anticipated, which could lead to passengers being charged extra wait time. TechCrunch included a screenshot from an UberX that arrived two minutes ahead of schedule; theoretically, a rider could have missed the two-minute window and incurred fines.

The new policies seem to be aimed mostly at keeping drivers happy — a big problem for Uber. The company recently settled a class action lawsuit with drivers in California and Massachusetts. While the settlement may bring drivers as much as $100 million in compensation and give them the right to request cash tips (tipping isn't built into the app), it does not address their main grievance of being independent contractors rather than employees.

How passengers will respond to this pilot program remains to be seen. Uber does not anticipate that the new policies will encourage drivers to ditch riders who don't show up promptly more than they already do. The $5 or $10 fee charged after five minutes of waiting still exceeds the per-minute rates in each city, so it is to a driver's advantage to wait five minutes before moving onto the next fare. And Uber hopes that this policy will encourage riders to call a car when they're actually ready — and hustle to the curb when their ride arrives.