Uber facing $26m fine over misleading fares and cancellation fees

Ridesharing service Uber is facing a fine of up to $26 million after it admitted to engaging in deceptive conduct and false or misleading representations.

According to consumer watchdog the Australian Competition and Consumer Commission (ACCC), Uber has admitted to breaching the Australian Consumer Law (ACL) between December 2017 and September 2021, by making false or misleading statements in its cancellation warnings and fare estimates.

As a result, the ACCC and Uber will now both make submissions to the Federal Court which will decide the financial penalty the latter will receive.

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An example of the incorrect cancellation warning Uber users were shown

The ACCC says Uber's app produced a message telling customers who wished to cancel their pending trip that they would incur a fee due to the driver being en route, despite it happening within the free cancellation period.

Uber's now defunct, Sydney-based Uber Taxi service has also been under fire for providing misleading fare estimates between June 2018 and August 2020, due to a mistake with the company's algorithm which inflated the projected fare to above its actual cost.

“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,” said ACCC chairperson Gina Cass-Gottlieb.

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The Uber Taxi algorithm often inflated prices to beyond the real fare

“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.

“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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The ridesharing giant said it has co-operated with the ACCC throughout the process, wanting to ensure it was doing the right thing for its Australian customer base of just under four million people.

"Uber and the Australian Competition and Consumer Commission have today reached an agreed settlement position regarding two historical issues," Uber said.

"The final resolution of the matter will be subject to the determination of the Federal Court.

"We value the important work the ACCC carries out and have cooperated with the ACCC throughout its two year investigation, including proactively making changes to our platform based on the concerns they raised.

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"Over time we have constantly evolved our offering, looking for ways to create better customer experiences, trial new products and invest in our technology. We are committed to continually raising the bar – for ourselves, our industry, and most importantly for the people who use our services.

"As always, we will continue to listen to feedback from driver-partners and riders to make sure that the service we are offering continues to meet their needs.

"With more than 3.8 million Australians regularly choosing to take rides with the Uber app, we are committed to constantly innovating and investing in our technology and customer support to deliver an excellent experience for all of them."

Last year Uber called out the Australian Government over its lack of emissions regulations, urging those in power to make changes which would allow its drivers to switch to electric and low emissions vehicles sooner, wanting its worldwide fleet to be zero-emissions by 2040.