Uber has admitted that it engaged in misleading or deceptive conduct in regards to the trip cancellation warnings on its ride-sharing app.
This admission is the result of an investigation by the Australian Competition and Consumer Commission (ACCC), which is suing Uber in the Federal Court.
Both parties are making joint submissions to the court for a fine of $26 million to be imposed.
Given that Uber has already admitted to breaching Australian consumer law, the court needs to decide on the appropriate penalty — which may end up being different to what Uber and the ACCC are seeking.
The consumer regulator alleged that, from at least December 2017 to September 2021, Uber's app displayed a misleading cancellation warning.
Whenever consumers tried to cancel their bookings, they received a prompt saying words to the effect of: "You may be charged a small fee since your driver is already on their way."
That was despite the fact these consumers were trying to cancel their trip within Uber's free cancellation period of five minutes.
The ACCC said more than 2 million Australian consumers were shown the misleading cancellation warning.
“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 ride-sharing company changed its cancellation message in September 2021, so it now says: "You won’t be charged a cancellation fee", for users who cancel trips within five minutes."
Misleading customers with higher cost estimates
Uber also admitted it misled customers of its "Uber Taxi" ride option (which was only available in Sydney), by giving price estimates that were inaccurate and too high.
For example, Uber's app might give customers a price estimate of $30 to $40 for its "Taxi" option. But the actual fare paid by the customer would nearly always fall below that range (say, $25).
Those misleading taxi fare estimates were displayed between June 2018 and August 2020, after which it was removed the feature from the app.
"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.
