Uber may need to pay penalties totaling A$26 million (roughly USD29 million) after the ride-sharing company admitted in breaching Australian Consumer Law. The Australian Competition & Consumer Commission (ACCC) instituted proceedings with the Federal Court, saying Uber engaged in misleading or deceptive conduct and made false or misleading representations in the Uber ridesharing app.
Between at least December 2017 and September 2021, the app had sent warning messages when users wanted to cancel their rides even within the five-minute free cancellation period after acceptance of booking. Instead, the customer would receive ‘You may be charged a small fee since your driver is already on their way’.
More than two million app users received such misleading cancellation warning messages.
“Uber admits it misled Australian users for a number of years and may have caused some of them to decide not to cancel their ride after receiving the cancellation warning, even though they were entitled to cancel free of charge under Uber’s own policy,” ACCC Chair Gina Cass-Gottlieb said.
The company only changed the message to ‘You won’t be charged a cancellation fee’ after an amendment regarding cancellation messaging in September 2021.
Adding to that, the estimated fare range for the ‘Uber Taxi’ ride option was inflated for a period of two years between June 2018 and August 2020. The ACCC said Uber did not monitor the algorithm used to generate these estimates to ensure it was correct. The ‘uber Taxi’ ride option ceased after August 2020, when it was available only in Sydney.
“Consumers rely on apps to provide accurate information, and the misleading information on Uber’s app deprived consumers of a chance to make an informed decision about whether or not to choose the ‘Uber Taxi’ option.”
“Digital platforms like Uber need to take adequate measures to monitor the accuracy of their algorithms and the accuracy of statements they make, which may affect what service consumers choose. This is particularly important as online businesses often carefully design their user interfaces to influence consumer behavior,” Ms Cass-Gottlieb added. The A$26 million penalty is a figure of joint submissions by Uber and the ACCC to the Federal Court of Australia. It will still need to be approved by the court.
