Careem’s peak factor has left its users outraged

July 14, 2017
By: Minerwa Tahir
Published in Economy, Pakistan

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By Minerwa Tahir

KARACHI: “It’s ridiculous. [Careem has been] pretty much acting like a monopoly.”

Nisma Chauhan, a young female journalist, takes Careem from her home in Gulshan-e-Iqbal to her workplace in Defence Housing Authority (DHA) on a near daily basis. Lately, she, like many other Careem users, has been perturbed by the peak factor that has been prevailing pretty much all day since Chand Raat.

“Usually, I pay around Rs300 from my place to office,” she tells Samaa. Now, owing to the peak factor that has been in place since Chand Raat, she pays somewhere around Rs700, which is more than twice the amount she used to generally pay. “The peak factor has been on since Chand Raat and then [because of] the rains.”

Another young woman who requested anonymity says she has been using Careem for the past year now and prefers it over others owing to its ‘feasible’ prices. “Given that my work requires travelling all across the city, Careem works for me because it charges lesser than a rickshaw,” she says. “However, during Ramazan, they introduced peak factor owing to the ‘demand’. The peak factor would begin from 1.1, which wasn’t so bad because of the quality. However, soon it reached 2.5 in Ramazan alone and that, too, at 11pm or even 1am when it’s absurd to think that the demand would be so high.”

She says that she pays between Rs250 and Rs320 from her place in Federal B Area to her workplace on II Chundrigar Road. “[At] times, I have reached [home from work] in Rs216 as well when it’d be around 1am in the night,” she says. “However, post Chand Raat, it has become near impossible to reach home in less than Rs400 and that, too, around 1am when there is less traffic.” She adds that between 8pm and 10pm, it would easily cost her around Rs600 to Rs800 because of the peak factor.

Speaking to Samaa, Careem Pakistan Head of Public Affairs Sibtain Naqvi explains the concept behind the peak factor. “Peak Factor has been introduced to ultimately benefit the customers by increasing the availability of the cars and reducing the waiting time (ETA) during very busy periods,” he says. According to him, ‘peak factor is applied when there is a shortage of supply (as compared to the current demand i.e. booking requests) in a particular area at a given point in time’. He says this is done to ‘incentivize captains to come online and move to that specific location to ensure that our users are able to get a ride quickly’.

“Peak pricing occurs when the demand for cars is higher than the Captains available in a particular neighbourhood,” he says.

Unfortunately, Careem users are not quite happy with this peak pricing mechanism. “Earlier, the peak hours like 1.2 or even 1.5 were bearable,” says Chauhan. “But now it doesn’t go below 1.8. It’s mostly at 2.”

Why should we suffer?

Another frequent user of Careem feels that there is no justification for peak factor. “The company bears no loss even if there is a shortage of captains in the city,” he says. “If all the captains are busy, it means they are making money. Hence, there is no loss – they just want to maximize their own profits, which is beyond my understanding. Why should the users then bear losses, especially when they are already suffering from traffic jams and rain-related disasters?”

Trust factor

Despite the peak factor, Chauhan still continues to opt for Careem. “To be honest, I haven’t opted for another service yet because Careem is more widely available,” she says, adding that they have more cars. “It’s also to do with the trust factor. I’ve had good experience so far so changing to another completely new provider can be risky.”

However, she adds, she has been thinking about other options now. “Not Uber because there is no difference but I am definitely going to try Paxi or some other service to have other options available at least,” she says.

Rickshaws are back in the game

Some people are considering switching back to rickshaws as their mode of transport.

“I am going back to travelling in rickshaw instead of paying double [or] triple amount to Careem and Uber,” says Yusra Salim, a journalist in her 20s.

Sheharyar Ali, another Careem user, also says he now prefers rickshaw over Careem and Uber.

Another female journalist says she would have considered Uber but since ‘their case is no different’, she is back to opting for bus or rickshaw. “And if it’s not late then there are apps for rickshaw like Rocket Rickshaw and another bike app called Bykea,” she says. “I won’t think twice to use them because they save me time and money. I think if Careem wants to retain its customers they need to work on their policy because this new tactic shows they’re doing what everyone does: make most money in minimum time. People need to stop using the service for a while because we are being exploited by them for we are paying thrice the amount.”

Jawaish Raza, who usually pays between Rs160 and Rs170 from his house to Karachi University, has been charged Rs450 and Rs470 twice in a week. “That’s why I left Careem and now using Uber app.”

‘Peak pricing to be minimized very soon’

Careem’s spokesperson says the frequency of peak pricing will be minimized very soon. “As a company, we promise affordable and convenient rides and hence, we are aggressively recruiting Captains to ensure every customer can avail a ride,” he says. “Since every Captain goes through background checks and training – this adds some time in their induction process but is extremely important from a safety point-of-view. Rest assured, the frequency of peak pricing will be minimized very soon.”


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Story first published: 14th July 2017

 
 

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