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Uber facing $26m in fines for admitted breaches of Australian Consumer Law
Uber has been taken to court by the Australian Competition and Consumer Commission (ACCC) after misleading statements regarding Uber taxi fares and cancellation fees.
Lauren Croft
The ACCC has begun proceedings in the Federal Court today (26 April) against the ridesharing company after it admitted to engaging in misleading or deceptive conduct, as well as making false or misleading representations in the Uber ridesharing app.
Between December 2017 and September 2021, the Uber app displayed a cancellation message to users who attempted to cancel a ride, warning them that they may be charged a “small fee” since their driver was already on their way, despite users cancelling rides within Uber’s free cancellation period.
Most Uber services have a five-minute free cancellation period after the driver has accepted the trip, whereby a customer can cancel their trip without incurring a fee. Over 2 million Australian consumers were shown the misleading cancellation warning within the free cancellation period.
ACCC chair Gina Cass-Gottlieb said that Uber had admitted to misleading Australian customers, before amending its cancellation message in September 2021 to advise consumers they “won’t be charged a cancellation fee” during the free cancellation period.
“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,” she said.
In addition, the Uber app also falsely represented estimated taxi fare prices through its Uber Taxi ride option, which almost always inflated the prices, resulting in the taxi fare almost always being consequently cheaper than Uber’s lowest estimate.
The misleading taxi fare estimates were displayed between June 2018 and August 2020, before the taxi ride option, available only 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.
“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,” Ms Cass-Gottlieb added.
“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.”
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Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
