Uber has been fined $21 million by the Federal Court for breaching Australian consumer law with its misleading warnings that popped up for years when a customer tried to cancel a ride. It’s $5 million less than what the rideshare giant was expecting.
Uber admitted to the misleading messaging during an investigation by the Australian Competition and Consumer Commission (ACCC), which sued Uber for misleading or deceptive conduct in April this year.
But despite both parties filing submissions submitted that said a $26 million fine would be appropriate, the court decided the penalty was excessive and not enough evidence was submitted to justify a fine higher than $21 million.
Justice Michael O’Bryan acknowledged it was an “unusual case” and basically said $21 million was plenty.
The consumer regulator alleged that from December 2017 to September 2021 the app displayed a misleading cancellation warning.
Uber has a policy that rides cancelled within five minutes will not incur a cancellation penalty. But during that four-year period 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. More than two million Australian consumers were shown the warning.
“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 in April.
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.
Uber also admitted to giving price estimates that were inaccurate to users who selected the “Uber Taxi” option, which was only available in Sydney from 2018 to 2020. The estimates were often price brackets that were much higher than the actual fare.
