MCC Codes
4789

Transportation Services

Comprehensive guide for transportation services covering underwriting, risk assessment, and fraud prevention strategies.
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Table of Contents
Overview
Business Types
Payment Processing Info
Key Risks & Concerns
Common Fraud Signals
Example Scenarios
Common Questions
Ongoing Monitoring
Useful Sources

Underwriting Cheat Sheet

Merchant Category Code 4789 covers transportation services not classified elsewhere, including ride-sharing, limousines, shuttle services, charter buses, and specialized transportation. This category serves both consumer and commercial transportation needs.

Key Information

This guide addresses transportation service operations where service delivery timing, driver management, and variable pricing create unique merchant challenges.

Typical Business Types

Ride-Sharing Services

#1
App-based platforms connecting passengers with independent drivers for on-demand transportation.

Limousine and Car Services

#2
Professional transportation companies providing prearranged rides and special event services.

Charter and Shuttle Services

#3
Group transportation for events, airports, hotels, and scheduled routes.

Payment Processing Information

Transaction Types

1

Ride Completion Payment

Charges processed after trip completion based on distance, time, and surge pricing.
2

Advance Reservation Payment

Pre-booking payments for scheduled pickups or special event transportation.
3

Recurring Corporate Accounts

Monthly billing for businesses providing employee transportation services.
4

Cancellation Fees

Charges applied when passengers cancel reservations within penalty windows.
5

Damage or Cleaning Fees

Additional charges for vehicle damage or excessive cleaning required after rides.

Common Payment Methods

Credit and Debit Cards - Primary payment method linked to transportation apps
Digital Wallets - In-app mobile payment integration
Corporate Travel Cards - Business payment cards for employee transportation
Transportation Network Company Credits - Platform vouchers and promotional credits
Cash - Limited acceptance by traditional car services

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Key Risks & Concerns

Fraud Risks

  • Service Disputes - Passengers claiming ride quality or route issues
  • Pricing Disputes - Disagreements over surge pricing or route charges
  • Driver Fraud - Unauthorized charges or route manipulation by drivers
  • Account Takeover - Hijacked passenger accounts used for unauthorized rides
  • Cleaning Fee Abuse - Disputed damage or cleaning charges passengers claim are false

Regulatory Challenges

  • Transportation Authority Licensing - Local permits for operating transportation services
  • Driver Background Checks - Required screening and qualification verification
  • Insurance Requirements - Commercial liability coverage mandates
  • ADA Compliance - Accessibility requirements for disabled passengers
  • Data Privacy - Protection of passenger trip information and payment data

Common Fraud Signals

Unusual Ride Patterns

Multiple rides from same pickup to same destination suggesting driver collusion or account testing.

Route Manipulation

Drivers taking unnecessarily long routes to inflate fares leading to passenger disputes.

Account Activity Spikes

Sudden high-volume ride requests from accounts with minimal history potentially indicating takeover.

Example Scenarios and Red Flags

Surge Pricing Disputes

A ride-sharing platform experiences chargebacks when passengers dispute surge pricing multiples they claim weren't clearly disclosed before rides.

Driver Route Complaints

Passengers file disputes claiming drivers deliberately took longer routes to increase fares beyond estimated amounts.

Cleaning Fee Disputes

Passengers chargeback damage or cleaning fees claiming no incident occurred and photos were fabricated or misattributed.

Account Takeover Fraud

Legitimate account holders dispute multiple rides they didn't take after credentials were compromised.

Pre-Booking Cancellations

Pattern of advance reservations cancelled outside refund windows leading to fee disputes.

Common Underwriting Questions

UW Tips Business

  1. Verify transportation authority permits and operating licenses
  2. Confirm commercial insurance coverage including passenger liability
  3. Review driver screening and background check procedures

UW Tips Financial

  1. Analyze ride volume patterns and average trip values
  2. Review driver payout schedules versus customer payment collection
  3. Assess refund and dispute rates across service types

UW Tips Risk

  1. Examine chargeback ratios focusing on pricing and service quality disputes
  2. Evaluate surge pricing communication and customer notification systems
  3. Review damage fee documentation procedures and appeal processes

UW Questions Business

  1. What transportation services do you provide and in what geographic areas?
  2. How do you manage driver qualification and ongoing performance monitoring?
  3. What percentage of rides are consumer versus corporate accounts?

UW Questions Payments

  1. How do you calculate and communicate pricing including surge multipliers?
  2. What payment methods do you accept and how are they processed through your platform?
  3. How do you handle refunds and cancellation fee disputes?

UW Questions Fraud

  1. What systems prevent driver fraud including route manipulation?
  2. How do you detect and prevent account takeover attempts?
  3. What procedures verify damage and cleaning fee legitimacy?

UW Questions Compliance

  1. Are you compliant with local transportation authority licensing requirements?
  2. How do you ensure proper driver screening and background checks?
  3. Do you maintain required commercial insurance coverage?

UW Questions Chargebacks

  1. What is your chargeback ratio and what reasons are most common?
  2. How do you document ride completion and pricing disclosure?
  3. What procedures handle passenger complaints before disputes escalate?

UW Questions Infrastructure

  1. What platform manages ride dispatch and payment processing?
  2. How do you track GPS data for verifying routes and ride completion?
  3. Are your systems capable of handling high-volume simultaneous transactions?

Ongoing Monitoring

Transaction Monitoring

  • Monitor for unusual ride patterns indicating driver collusion or fraud
  • Track cleaning and damage fee dispute rates by driver
  • Review account activity for takeover indicators

Compliance Checks

  • Maintain current transportation permits and operating licenses
  • Ensure ongoing driver screening and qualification compliance
  • Stay updated on accessibility and insurance requirements

Security Updates

  • Implement strong authentication to prevent account takeover
  • Use GPS verification to detect route manipulation attempts
  • Deploy fraud detection monitoring unusual ride patterns

Risk Assessment

  • Review surge pricing communication to reduce dispute rates
  • Assess damage fee documentation quality and dispute outcomes
  • Monitor driver performance metrics affecting customer satisfaction

Merchant Communication

Provide guidance on clear pricing disclosure including surge pricing. Share best practices for damage fee documentation and dispute resolution. Support services in implementing fraud prevention for driver and passenger activity.

Overwhelmed with Applications?

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Useful Sources

Visa Merchant Data Standards Manual

PCI DSS Quick Reference

FMCSA Transportation Regulations

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