Uber is fined $21 million for misleading users about cancellation fees and taxi fares

The Federal Court ordered Uber to pay the $21 million fine after the U.S. tech giant admitted it engaged in misleading or deceptive conduct and made false or misleading statements to consumers following legal action brought by the competition regulator ACCC. The breaches of Australian consumer law also concerned the price of Uber taxi rides.

Uber had a small win with the decision — the fine is $5 million less than the $26 million fine ACCC was seeking, which the tech company agreed to.

The fine was divided between $3 million for the cancellation notice and $18 for the fake taxi prices.

The Uber cancellation notice the company admitted was deceptive and misleading

The app message appeared at least between December 2017 and September 2021 and said, “You may be charged a small fee because your driver is already on the road,” even if users tried to cancel during Uber’s free 5-minute cancellation period. .

Uber changed the message in September 2021 after the ACCC raised concerns. More than two million users saw it.

The rideshare company also admitted that the estimated price range for an Uber Taxi ride (available in Sydney between July 2018 and August 2020) on the app was false and misleading – and usually higher than the actual Uber Taxi fare.

Uber agreed that more than 1,000 consumers per week used the Uber Taxi option and were presented with inaccurate price estimates.

The ACCC began legal action against Uber in April this year for consumer law violations.

ACCC Chair Gina Cass-Gottlieb said they launched a case because consumers rely on the app to provide accurate information to inform their purchasing decisions.

“This $21 million fine clearly indicates to companies that misleading consumers about the cost of a product or service is serious business and can lead to significant fines,” she said.

“We take note of Judge O’Bryan’s statement that the fine imposed should not be construed as a reduction of the court’s decision to impose penalties appropriate to achieve the legal objective of preventing breaches of Australian consumer law. discourage.”

Uber agreed that some Uber group employees were aware of issues with Uber Taxi fare estimates and cancellation messages, but the company did not check the algorithm’s functionality for the accuracy of the taxi fare estimates.

The company was also ordered to implement a compliance program, not make any similar statements about consumer cancellation fees for the next three years, publish a corrective notice on its website, and pay $200,000 for the costs of the ACCC.

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