Australia markets closed

    -32.80 (-0.42%)

    +0.0051 (+0.74%)
  • ASX 200

    -34.90 (-0.46%)
  • OIL

    +1.04 (+1.40%)
  • GOLD

    +7.00 (+0.37%)

    +44.64 (+0.14%)
  • CMC Crypto 200

    +1.52 (+0.29%)

Uber to pay $21 million for ‘misleading’ 2 million Aussies

A composite image of a sign that says 'Uber' and a copy of the cancellation message shown to users.
Uber has admitted to false and misleading representations. (Source: ACCC/Getty)

The Australian Federal Court has ordered Uber to pay a whopping $21 million penalty after it admitted to “misleading or deceptive conduct” over cancellation fees and Uber Taxi fees.

The ridesharing giant admitted it breached the Australian Consumer Law by engaging in misleading conduct and making false or misleading representations on its website and app.

In particular, Uber admitted the cancellation message it displayed between at least December 2017 and September 2021 was misleading because it said 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 said: “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) concerns.

Uber agreed more than 2 million consumers saw the misleading cancellation message.

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

A copy of the Uber app showing Uber Taxi prices.
UberTaxi users were shown incorrect price ranges. (Source: ACCC)

The price-range estimate displayed was higher than the actual Uber Taxi fare most of the time, the ACCC said.

Uber agreed more than 1,000 consumers used the Uber Taxi option each week, where they were shown inaccurate price estimates.

“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.

Uber also acknowledged it did not monitor the functionality of the algorithm to ensure the accuracy of the Uber Taxi fare estimates it produced in Australia.

Uber also admitted 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 decisions 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.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.