I tried Lyft the other day, but after they charged me $25 as an "authorization hold" without notification, I cancelled my ride and decided to stick with Uber. Note that Uber's auth charge is usually around $1. $25 may not be a significant amount for some, but it's non-trivial for a college student like myself.
I would have been happy had they just notified me first instead of my bank. Terrible UX to be frank. I actually got in contact with Lyft support on Twitter, but they did not care and just claimed that it was "standard policy".
> I tried Lyft the other day, but after they charged me $25 as an "authorization hold" without notification, I cancelled my ride and decided to stick with Uber. Note that Uber's auth charge is usually around $1. $25 may not be a significant amount for some, but it's non-trivial for a college student like myself.
I've found it more common at interstate gas stations than at local gas stations. E.g. the one that always does it for me is Hooksett, NH; with a Tesla Supercharger, it is more a place that serves everyone and their mother than a lower income area.
It's a horrible idea to use a debit card for electronic payments. The laws that require credit card companies to refund unauthorized charges are much more consumer friendly than for debits from your bank account.
With a credit card your maximum liability for fraudulent charges is $50 even if you don't timely report a stolen card or suspect transaction; $0 if you do. For debit cards, it's unlimited.
So, for example, somebody could fraudulently use your debit card number to buy a stick of gum, hoping the charge goes unnoticed. Then, 60 days later, they drain your entire bank account, and possibly other linked accounts if you have automatic overdraft protection. If you failed to notify the bank for the gum purchase, your entire life savings is lost. Even if the bank account is only used for small purchases and only maintains a small balance, it can still create huge headaches.
Debit cards are for ATMs, and preferably ATMs inside bank buildings. Credit cards are for transactions everywhere else.
For similar reasons, you should be careful who you write checks to--because similar rules that govern debit card transactions also govern ACH transactions. And if you can help it, don't link a checking account on which you draw checks and make other payments to any of your other accounts; or at least, don't then enable automatic overdraft protection.
Oh wow. I wonder how upset you would be when you realize that some gas stations put a $100 hold on your credit card. Btw. a hold is not a charge. A charge is only when it shows up on your credit card bill as a charge and not as a hold.
I do not see what the issue is with having a $25 hold? It's not a charge.
Haha, you're right - I did not phrase that correctly: I use a secured CC sparingly to avoid over-utilization. In this case, I had to use my debit card.
Utilization has no lasting effect on your credit score - if you have 100% utilization one month and pay it off next month, your credit score will be the same as if your utilization was 0% the whole time. It doesn't matter for building credit in the long term.
I use public transport for my daily commute. I use Uber for shopping 2 or 3 times per month, and only on the way back. I think it's tough to save more than that.
If you find yourself starting a comment with “not to sound rude”, you might consider whether skipping the comment altogether is the best way to not be rude.
Uber isn't a cash venture, and several activities in the US require either a credit card upon which temporary authorizations can be placed, or a full (and sometimes, over-)payment on a debit card, the difference being that the debit card isn't backed by a line of credit that becomes due in at least 20 days, but rather it is spent directly out of a checking account.
You need this for:
- gas stations
- hotel stays
- car rentals
- sit-down restaurants or bars
The SV/HN is out of touch argument doesn't fly here. Rather, there is a wide gulf in the spending ability and access to services between a US credit card owner therefore a participant in the mainstream banking system, vs. someone with only a checking account, vs. a person who can't qualify for either and conducts their affairs with cash. This is a problem much older and much more foundational than the Bay Area vs. everyone else and the techies and non-techies divide, and is a significant delineation between the US middle class and lower class.
Is ride-sharing that big of a cost for your day to day?
For a lot of people, it is. The only people I have ever heard say this kind of thing, at least from my experience, are middle-class and well-off, or better. This cohort is the exception, because the norm (especially among millenials) is check-to-check living. $25 is several days' worth of food, two weeks' coffee budget, the price of a full tank of gas for a small car, or numerous other things to many, and $25 can be the difference between your card going through or being declined.
Truly reliable and useful public transit is a luxury in the United States that isn't available to a huge majority of the country.
Walking also isn't an option for many people due to safety, health reasons, scheduling, childcare needs, and not to mention just too much stuff to carry.
Again, if you are cutting it that close you should not be taking "luxury" transportation, barring needing to go to the ER.. in which case, maybe that hold was worth it.
I've never seen a $25 authorization hold before. Usually Lyft does something like $5. In any case, once the charge is captured, the rest of the authorization should go away (and the charge is captured as soon as you rate/tip the driver, or after 24 hours, whichever comes first).
An authorization hold should happen for all rides, but it's normally not very large. The whole point of it is so you can't get a ride and then have their charge fail because you don't actually have any money. Any company that provides a service before payment can be expected to do the same thing (e.g. basically any company that's part of the gig economy). The perfect authorization hold is one that's for the exact amount you'll be paying later, but in most cases that amount can't be predicted, so companies try to slightly overshoot (because they can always charge less than the hold, but if they try and charge more it will fail if you don't have any more money).
If you got a $25 authorization hold from Lyft there's a couple possibilities that come to mind. The first is that Lyft thought your ride would in fact come somewhere close to $25 (after tip). The second is that if you're a new customer, they likely consider you a much higher risk of fraud, and therefore want to err generously on the side of overshooting the estimate, instead of trying to place a lower hold and risk not being able to capture the real cost of the ride. Also, if you hailed your ride without providing a destination, they wouldn't have been able to produce a usable estimate.
It was my first ride, so it was probably an anti-fraud measure. Still, a simple notification like "we will be charging you $25 to verify your card" would have been great.
Interestingly, I use Uber semi-regularly, and they don't hold anything. They probably only did it for the first ride.
I've only used Uber once, out of curiosity really.
It was fine, just like a taxi, the price was a little less but not much.
I asked the driver if he liked driving for Uber and he said it was his last shift, he was going back to driving for a taxi company as he couldn't make any money driving for Uber.
As the city I live in has an over supply of taxis Uber can't exploit the customers, so it sounds like they need to exploit their drivers instead.
I would have been happy had they just notified me first instead of my bank. Terrible UX to be frank. I actually got in contact with Lyft support on Twitter, but they did not care and just claimed that it was "standard policy".