8 December, 2022

Uber fined $21m for misleading customers

By Alexandra Coulton

The Federal Court has ordered Uber to pay $21 million after the ridesharing platform admitted to misleading conduct and made false representations to consumers on its app and website.

Uber admitted to breaching Australian Consumer Law by making misleading representations in regards to cancellation messages and the price of its rides.

In particular, the ridesharing platform admitted the cancellation message it displayed between at least December 2017 and September 2021 was misleading because it stated users may be charged a cancellation fee if they cancelled their trip, even if those users were seeking to cancel during Uber’s ‘free cancellation period’.

The cancellation message which stated ‘You may be charged a small fee since your driver is already on their way’ was amended by Uber in September 2021 in response to the Australian Competition and Consumer Commission’s (ACCC) ongoing concerns. The company agreed that more than two million consumers saw the misleading cancellation message.

The company also admitted the price range estimate for an Uber Taxi ride (a service available only in Sydney) displayed to consumers on its app and website from July 2018 until the service was discontinued in August 2020, was false and misleading.

The price range estimate displayed was higher than the actual fare most of the time. Uber agreed more than a thousand consumers used the Uber Taxi option each week where they were shown inaccurate price estimates.

The ACCC filed proceedings on 26 April 2022, and at that time both parties jointly submitted to the court that a penalty of $26 million was appropriate.

“This $21 million penalty clearly signals to businesses that misleading consumers about the cost of a product or service is a serious matter which can attract substantial penalties,” ACCC chair Gina Cass-Gottlieb said.

Uber agreed some of its employees were aware of issues with its Uber Taxi fare estimates and cancellation messaging. The company has acknowledged it did not monitor the functionality of the algorithm to ensure the accuracy of the Uber Taxi fare estimates it produced in Australia.

It also admitted that the incorrect cancellation fee statements may have caused some individuals to decide not to cancel their ride. The incorrect Uber Taxi fare estimates meant consumers could not accurately evaluate the cost of an Uber Taxi and make informed decision about their transport choices.

“We took this important case because we understand that consumers rely on apps, like the Uber app, to provide accurate information to inform their purchasing decisions because they cannot independently check or monitor whether the information displayed is accurate,” Cass-Gottlieb said.

Image: iStock/vladispas

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accc australian competition and consumer commission Gina Cass-Gottlieb Uber