Consumer rights activists have accused Bangladeshi-based ridesharing company Pathao of adding an unnecessary Rs100 fee to the fare on its newly launched Car Lite service. Pathao defended the extra cost saying it was operational charge, but activists said that it was a ‘white lie’ and that the company was cheating customers.

Pathao started the Car Lite service on Friday following up its app-based motorbike ridesharing service.

Holding a press meet on Tuesday, the company gave a breakdown of its Rs100 additional charge: Rs14 for switching on the meter as per the government set taxi charge, distance charge that includes fuel costs if the driver has to drive an additional 3 km to pick up customers, and phone and internet expenses.

A waiting charge of Rs1 per minute is applied when waiting for the passenger and when the taxi is stuck in a traffic jam, said Shashank Shumsher Thapa, manager of Pathao. The fare on the Car Lite service is the taxi fare rate fixed by the government, he said.

Pathao said that the company had asked different government bodies to introduce legal provisions and develop a mechanism for such services that are operated through apps.

As per the law, it is illegal to charge more than Rs1 above the fare. Thapa said the company was a tech-based service provider, and the Nepal government had not created any rules to regulate tech-based companies.

In February, the Metropolitan Traffic Police Division, following a complaint by the taxi drivers’ committee, mounted a crackdown in the Capital on January 14 and 15 and seized motorbikes being used 'illegally to offer transportation services'.

Subsequently, Prime Minister KP Sharma Oli instructed Physical Infrastructure and Transport Minister Raghubir Mahaseth not to ban ridesharing services.

Different stakeholders including the traffic police told the Post that the additional charge Pathao was adding to the bill was illegal.

Deputy Superintendent of Police Padam Bahadur Bista of the Metropolitan Traffic Police told the Post that service providers were not allowed to add an extra charge on the pretext of technology.

“Charging extra is cheating customers,” he said. “No one is allowed to make regulations on their own.” He added that if anyone files a complaint about the extra cost, the police will take action like they take against any taxi service provider overcharging customers.

Arjun Prasad Gautam, president of the Nepal Meter Taxi Association, said, “We have been fined Rs3,000 to Rs5,000 for charging even an extra Rs20 based on customer complaints.” He also said that they had been complaining about the additional cost charged by Pathao.

Madhav Timilsina, president of the Consumer Rights Investigation Forum, told the Post that no one had any right to overcharge customers beyond the rate fixed by the government. He added that consumers needed to be aware about the extra charges taken for different reasons. “Action should be taken against anyone overcharging passengers.”

Taxi drivers have been widely accused of charging customers illegally as most of them refuse to switch on their meter. The government has failed to monitor such illegal practices, said rights activists.

According to Pathao, around 600 taxi drivers have signed up for the service.