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

Company says overcharging happened because of a configuration glitch; refunds to take as long as two weeks depending on bank policy

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.

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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.

 

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Ariba Shahid
The author is a business journalist at Profit. She can be reached at [email protected] or at twitter.com/AribaShahid

4 COMMENTS

  1. Compliments Ms. Ariba Shahid, Mr. Taimoor Hassan for Ride Hailing Company with a Regional/International presence of Uber. The license to Ride Hailing Company has not contributed anything at all for patients, PWD patients, stroke patients, to be taken for an image of CT/MRI to treatment by hospital doctor. The bus situation in Karachi was terrible and one cannot embark/dis-embark in bus. Hence Careem, Uber has no special tariff cuts for patients, Seniors, students for schools, girls for colleges etc., to prevent traffic congestion of Motor Cycle flood on the road. Uber/Careem is famous for genrous concession for Senior Men, Women, for individual subsidy for Friend/Family travelling available worldwide not only in the US, Europe, China, Singapore. Is there any regulator to check, allow accession for students, women for shopping while other in the family will also have the previlege to travel at discoundted tariff. I suggest to please consider the AutoMated Car which is also known as DriverLess Car which is launched by Uber in a big way in New YOrk, US. Why would Driverless car brought here by Uber. The relevant authorities should ask the company to provide benefit for low cost ride in Karachi for sharing the trails on Karachi roads. In New York, Uber is also taking cars. I may help Uber in the obtaining of ATA Carnet Previlege of Fully Automated Taxi in Karachi for tax free for TAxi of Uber in Karachi as in New York. The Honorable CM Sindh should take this initiative to invite Uber with your initiative for a reduced tariff as there is no cost of driver. The Ride Hailing Services should be operated at reduced competetive charges

  2. A suggestion to Profit for this matter of Competition be handed over to the Honorable Competition of Pakistan, to investigate. There’s no evidence/update n the charge mechanism, no element of Competition for bus, taxi, Paxi, rickshaw, ChingChi rides,Coach/Coaster Mazda imported by Sindh Engineering of PACO in 1970’s, which were purchased as Chasis and and body was made in 70’s with a route from Government of Sindh Road Transport Authority at Civic Center on 2nd/3rd floor, exclusive authority to issue route permit in Karachi public transport. For a long time, no route permit is issued to the cause of Capacity Building for public transport. The Mazda chasis of 70’s changed to CNG, and now something hybrid diesel, CNG, whatever easily cheaply available. As the leakage of fuel, CNG, diesel, petrol subject to leakage with several alterations in engine, chasis, subject to serious damage to the passengers. There is no hand support for standing passengers, as they may fall, if the bus exceed 20 km. hr. Entrance foot board stair is approx. 3 ft., or more. One has to jump to dis-embark, and enter in the bus which never stops and you have to jump in the moving coach of Mazda hybrid coach of mid seventies in Karachi Roads of route as G-7, which the conductor with mouthful of green Naswar flash on your face when he talks very confidently of pioneering to Pakistan soil, to operate this bus.
    I never heard/seen a ticket issued in the Mazda G-7 coach, as the honorable National Transport Research Center, Islamabad, which has made it essential that a bus operator should have a group insurance of passenger in the event of accident/injury, death for treatment and compensation. Loud music of English Disco, vulgar songs, etc., May I request the respective authorities/administrations should travel in G-7 but should take a stool to embark and dis-embark, with an ear plug of the loudest music, Gana, aroma of Naswar flashing to your face when conductor talks. The Naswar is of Bannu a prized gift to the face of the passengers. May I suggest the Editor to please write a whole story on Public Transport in Karachi with ChingQue, Mazda, tickets, Group Insurance obtainment reccomended by the NTRC and should put a whole story on Karachi Public Transport. Yes the G-7 is switching to putting a door entrance, curtains, etc.
    The ChingQue route should be genrously thru out Karachi. As it provides a low cost shuttle transport service. The regulatory authority of RTA has stopped seeing any route permit with a clean/clear route permit, vehicle/passenger insurance, a ticket, an NTN number of the Driver/Owner to provide relief to common men, folks, women, for short distance shuttle. They can obtain a permit on payment of fee by Credit Card, or money transfer from bank, or easy paisa, or post office to maintain a transparency of Road Transport Authority, Karachi wich is the exclusive authority to issue a route permit for a public transport, ChinQue, Rickshaw, Bus, Coach. The ChingQue should be promoted and police Khancha stopped to ask for money from ChinQue. The RTA should provide security to the travellers/passengers, drivers, seths, drivers, cleaner, with all payment by Easy Paisa to Police Challans, and nothing cash. Licenses should be encouraged for ChinQue as the pride of the Government of Sindhh. to the cause of public transport.

  3. Thanks RENTLY to second my note. The Road Transport Authority should be made a Trust, as your recommendation which suggest should also provide Naswar quota to drivers as they will drive peacefully, with their addiction. But a Neurological test is very essential from a competent Neurologist which are usually very costly. However I may try WHO, Geneva to help us on the issue of Driver fatigue etc., Some UN bodies may assist On-Line to Driver fatigue, anger, mood swing, Naswar deficiency etc., can be adressed for regular check ups. I’ll find out from the UN resources for the support of our drivers immunity to Accidents, Distractions, Anger, Naswar Addiction compliances. etc., I hope we start with the honorable RTA for an Open License after testing the Driver with simulator, Naswar Immunity test for Running Ching Que, on Alamgir Road, to Alamgir Welfare Trust from University Road Entrance a license is suggested to the need of poor people who come to AWT, Karachi. Please do consider. Thanks Best wishes.

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