Uber to pay $19M fine for misleading riders
Australian officials say ride-hail company gave false information to fares
CANBERRA, Australia – Uber agreed to pay a $19 million fine for misleading riders by falsely warning they could be charged a cancellation fee and for inflating estimates of comparable taxi rides, the ride-hailing company and Australia’s consumer watchdog said Tuesday.
Uber B.V., a Netherlands subsidiary of
San Francisco-based Uber Technologies Inc., admitted breaching Australian Consumer Law by making false or misleading statements in its app, the Australian Competition and Consumer Commission said in a statement.
The first offense stems from a free cancellation policy that allows a customer to cancel a booking at no cost up to five minutes after a driver has accepted the trip. Between at least December 2017 and September 2021, more than 2 million Australian customers who attempted to cancel within that five-minute window were warned: “You may be charged a small fee since your driver is already on the way.”
The cancellation message has since changed to: “You won’t be charged a cancellation fee.”
“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,” Commission Chair Gina Cass-gottlieb said.
Uber said in a statement almost all riders chose to cancel their trips despite the warnings.
The second offense related to estimated taxi fares provided by the app to Sydney customers between June 2018 and
August 2020, when the taxi ride option was abandoned.
The algorithm used to calculate the fare ranges inflated the taxi estimates. The actual taxi fare was almost always cheaper than Uber’s lowest estimate. Uber had not ensured the algorithm was accurate, the commission said.
Uber apologized for the taxi fare estimate “being higher than it should have.”
Uber said it cooperated with the commission and changed its platform based on concerns raised by investigators.
Uber and the commission agreed to jointly ask the Federal Court to order the $19 million fine.