Careem overcharges customers tens of thousands of rupees for short-distance rides

KARACHI: Ride-hailing platform Careem users in Pakistan have reported being massively overcharged for the usual short-distance rides, that the company says happened with as many as 162 rides.

Users reported being charged tens of thousands of rupees that were drafted from their bank accounts when they made payments for their rides via their bank cards. Careem attributes the overcharging to a “technological configuration issue” and denied that it was a security breach.

Faseeh Mangi, a Karachi-based journalist who works for an international media outlet, said that he had been charged by Careem Rs100,000 (approximately $660) in various currencies against two Careem rides. As per Mangi, the transaction was not even visible on the application, whereas his bank statement and banking alerts showed that the money had been deducted by Careem.

JUST IN: Careem has charged massive amounts to multiple users in random global currencies because of some malfunction. I was charged about one lac Pakistani rupees ($660) for two rides! 1/3 pic.twitter.com/WLhCYux1K6

— Faseeh Mangi (@FaseehMangi) May 14, 2021

As per Mangi's tweets, he was charged in currencies including US Dollars, UAE Dirhams, and Kuwaiti Dinars. In addition to the false debit made on his account, Mangi also stated that bank charges on international transactions had also been deducted from his account.

Another customer, Anvaar Baig, also tweeted that he was charged  429 Saudi Riyals instead of Rs429 for his ride on May 7, 2021. Similarly, Asad Arain Kaka tweeted his experience of being charged Rs14,377.26 for an international transaction on Careem when the actual amount was much less than that. 

What has Careem done?

In its official statement, Careem issued an apology for the inconvenience caused, promising to credit the amounts that were falsely debited back to users. 

“The amount was charged in a different currency due to a configuration error. It has been rectified immediately. Please be assured that reimbursement will be made as per banking procedures. Please feel free to reach out for further clarity,” the Careem statement read.

Moreover, Careem Country Manager for Pakistan Zeeshan Baig also circulated a message over WhatsApp where he explained the actions taken by the company in that regard.

According to Baig, the company has refunded the full amount to customers and refunds will be processed by the bank as per their refund procedures. Secondly, the company also waived complete fares for the rides that were overcharged to consumers.

“Additionally, as a small token of apology, we have added Rs1000 Careem credits to the Careem Pay wallet for these customers,” Baig said. “Rest assured, our teams are working tirelessly to make sure this doesn't happen in the future, and meanwhile, customers can reach out to us through the Help section on the app in case of any concern,” he added.

Is this the first time?

While Careem says it has taken measures to safeguard its consumers, this is not the first time such an incident has occurred with its users.

According to a user, his account with Careem was similarly overcharged by thousands of rupees in 2017. 

Gibran Peshimam, a prominent journalist was wrongly charged Rs56,000 for a ride from the Geo/Jang head office located on I.I Chundrigar to DHA. Peshimam’s ride had lasted only 25 minutes with a wait time of three minutes. He, however, was charged for a distance of 2,439 km. 

Speaking to Profit, Peshimam explained that back then when it happened, it took approximately two months to get the overcharged sum back from Careem. 

“Contacting customer support did not help. After contacting the now former managing director at Careem, my refund was processed in less than two weeks,” said Peshimam.  

While the inconvenience caused was significant, Careem had not then offered any reparation for the ordeal caused to the user.

“I use it [my card] often for other stuff. Have run into a few problems with apps like Foodpanda as well but I suppose the convenience compels me to continue with them [using cards on apps/ for online transactions],” added Peshimam.

Consumer rights under the law 

“Careem deducted the money wrongfully. They can either reverse the transaction or make a deposit. Reversing the transaction would be better,” explains Mubariz Siddiqui, legal counsel at Sarmayacar, a venture capital firm. 

Profit asked Siddiqui about whether Mangi and other victims were entitled to compensation despite getting a refund to which he said, “The spirit of compensation is to cover for any harm incurred. The user would have to establish actual loss like he had to pay a bill/fee for the ride and then incurred extra charges and transaction fee charges were also incurred. But he will need to prove that he did not have any money other than what Careem wrongfully deducted.”

Mubariz further explained that Careem may not be fined or penalized for this transaction as EMIs (electronic money institutions) are regulated by the State Bank of Pakistan (SBP).

“The banks and EMIs are regulated so SBP can intervene and hold the bank accountable. Maybe the broader question to ask is should Careem be regulated if it has access to deduct such huge payments?” he added. 

Moreover, it is also important to note that if Mangi or any other victim attempts to take Careem to court under consumer protection laws, it comes with expensive proceedings and lengthy-time durations for its eventual settlement at courts. 

Why is the refund taking so long?

Usually, when a customer makes a complaint for wrong deductions or overcharged amounts, they are refunded immediately in their Careem wallet. That, however, is only suitable when the amounts are small and do not put a dent in one’s budget nor are exuberantly large. 

In this case, Careem gives consumers the option of a refund into their bank accounts which usually takes around two weeks to process based on the bank’s policy. The delay in refund, however, according to the company is not Careem’s doing but just how the banking system in Pakistan operates.