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Uber Agrees To Pay $26 Million Fine Over Misleading Messages About Cancellation Fees

The Australian Competition and Consumer Commission (ACCC) has announced Uber admitted to making false or misleading statements in cancellation warning messages and Uber Taxi fare estimates.

Uber and the ACCC will make a joint submission to the Federal Court after the ride-share company admitted to making “misleading or deceptive conduct and made false or misleading representations” on its app.

“(Uber) has agreed to make joint submissions with the ACCC to the Court for penalties totalling $26 million to be imposed.” The ACCC said.

Between December 2017 and September 2021, Uber displayed a cancellation message warning customers they may incur a small fee for cancelling a ride, even if the action was being taken during the app’s free cancellation period.

Most services on the Uber app have a five-minute cancellation period, but two million users in Australia were shown the message.

“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.

Uber has since amended the message to “You won’t be charged a cancellation fee”, if the ride is cancelled within the free cancellation period.

The ACCC also said Uber admitted to falsely representing that the fare of a taxi booked through the ‘Uber Taxi’ option would likely be within an estimated fare range shown in the app.

The algorithm used for Uber Taxi fare estimates inflated the estimated range, and the actual fare was almost always lower than the range, consequently cheaper than Uber’s lowest estimate.

The misleading fare estimates were displayed between June 2018 and August 2020, before the Uber Taxi option, which was only available in Sydney, was removed.

“Uber admits its conduct misled users about the likely cost of the taxi option and that it did not monitor the algorithm used to generate these estimates to ensure it was accurate,” Ms Cass-Gottlieb said.

“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 behaviour,” Ms Cass-Gottlieb said.

Uber and the ACCC have sought orders from the Federal Court, including declarations that Uber contravened the Australian Consumer Law.

The Federal Court will decide whether the orders sought, including the $26 million penalty, are appropriate.