Australian Regulator Sues Uber for Misleading Fares, Seeks $19 Million Penalty

A screen displays the company logo for Uber Technologies Inc. on the day of its IPO at the New York Stock Exchange (NYSE) in New York, on May 10, 2019. Brendan McDermid/Reuters

Australia’s competition watchdog is suing Uber Technologies Inc and seeking a A$26 million ($18.69 million) fine from the ride-hailing platform after it admitted to misleading consumers about ride fare estimates and cancellation fees.

The Australian Competition and Consumer Commission (ACCC) on Tuesday said Uber admitted that between December 2017 and September 2021 it warned consumers they would be charged fees for cancelling rides even though the cancellation was sought during its “free cancellation period.”

“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 ACCC also said Uber admitted to have falsely represented fare estimates for its Uber Taxi option as its algorithm would almost always inflate the range and the actual fare would be lower than the company’s cheapest estimate.

“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,” Cass-Gottlieb said.

Uber said that ever since the ACCC has raised the issue, it has “worked to streamline our in-app messages to make it clear exactly when cancellation charges will or will not apply, per occasion, so that riders always have certainty.”

The ACCC and Uber are jointly seeking court orders, including declarations that the ride-hailing platform breached the country’s consumer law, and to impose upon it penalties, the regulator said further.

($1 = 1.3910 Australian dollars)