Uber faces a $26m fine after the ride share company admitted engaging in misleading or deceptive conduct over its cancellation fee warnings and taxi fare estimates.
Under Uber’s policies, people have five minutes from the time a driver has accepted a ride to cancel it without incurring a fee. However, between December 2017 and September 2021, the ride share app warned users who went to cancel a ride that they “may be charged a small fee since your driver is already on their way” even within the five-minute window.
The message was shown for people booking UberX, Uber Premier and Uber Comfort rides.
The Australian Competition and Consumer Commission (ACCC) said more than 2 million Australians were shown this misleading warning. Uber has since admitted its mistake and fixed 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,” the ACCC chair Gina Cass-Gottlieb said.
Since September last year, the message has advised users they won’t be charged within the free cancellation period.
The ACCC is also taking Uber to court over its Uber Taxi ride option, which the watchdog says overinflated the estimated cost, meaning the actual fare was cheaper than Uber’s lowest estimate. The ride option was only available in Sydney, and was removed in August 2020.
“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,” Cass-Gottlieb said.
Uber said in a blog post on the matter it had “worked to streamline” its in-app messages since the ACCC raised it, and despite the warning message, most users still ultimately cancelled their ride without charge.
“Over time we have constantly evolved our offering, looking for ways to create better customer experiences, trial new products and invest in our technology,” Uber said.
“We are committed to continually raising the bar – for ourselves, our industry, and most importantly for the people who use our services.”
Uber is not fighting the court action. The ACCC and Uber have agreed to jointly seek orders, including for Uber to pay $26m in penalties. However, it will be for the court to decide if the penalties are appropriate.
