The cancel->refund pattern falls under the umbrella of a dispute. Drivers don't want to drive 10 mins toward a rider and then see them cancel on a whim with no consequence. In a case like that, the rider made a commitment that they would pay some money, which would ultimately offset the cost of the driver driving to the pick up spot, so the driver would want things to be made right if the rider decided to cancel.

Determining who is right in each case requires human intervention. Human intervention costs money. In some cities, it costs A LOT of money. Someone has to pay for it. One solution would be to hide that cost in the price of all rides, but no company is going to do that if it means having higher prices than competitors across the board.

If it was more common that a driver is at fault in a cancellation than a rider, the default behavior of the app would logically be to refund. The fact that it is not tells you something about the incentives for all the parties involved and where the potentials for abuse lie.