Uber faces a $26 million fine after it admitted it breached Australian consumer law with its misleading warnings that popped up for years when a customer tried to cancel a ride.

The admission was made during an investigation by the Australian Competition and Consumer Commission (ACCC), which is suing Uber for misleading or deceptive conduct in the federal court.

The consumer regulator alleged that for close to four years the app displayed a misleading cancellation warning.

Uber has a policy that rides cancelled within five minutes will not incur a cancellation penalty. But whenever someone clicked cancel, even within the five minute timeframe, a prompt would pop up that said: “You may be charged a small fee since your driver is already on their way.”

The ACCC said this may have led users to not cancel their rides because they thought they might have been charged.

“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.

More than two million Australian consumers were shown the misleading cancellation warning.

Uber changed its cancellation message in September 2021 to say: “You won’t be charged a cancellation fee” for users who cancel within five minutes.

Both Uber and the ACCC have submitted that a $26 million fine would be appropriate, but the decision is now up the the federal court which could pick a different sum or penalty altogether. Stay tuned.

Image: Getty Images / Spencer Platt