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Uber has admitted misleading millions of Australian users with ‘free cancellation’ warnings, and is set to receive a huge fine.
The admission comes after the company was sued by the Australian Competition and Consumer Commission (ACCC).
The ACCC alleged between December 2017 and September 2021 users got shown a misleading warning if they tried to cancel a trip.
‘You may be charged a small fee since your driver is already on their way,’ the warning read.
Uber has admitted misleading millions of Australian users with ‘free cancellation’ warnings, and is set to receive a huge fine
This was occurring even when consumers were seeking to cancel a ride within Uber’s free five minute cancellation period, the ACCC said.
Uber and the ACCC have made submissions to the court for a fine of $26million to be imposed.
The ACCC’s chair Cass-Gottlieb said at least two million Aussies got mislead by 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,’ she said.
Uber also admitted that it misled customers of its ‘Uber Taxi’ ride option, by giving price estimates that were too high or incorrect, between June 2018 and August 2020.
The app gave one estimated fare but the real cost of a trip was almost always lower.
Users were being told they would be charged a cancellation fee despite being in the five-minute free cancellation window
‘Uber admits its conduct misled users about the likely cost of the taxi option, and that it did not monitor the algorithm used to generate these estimates to ensure it was accurate,’ Ms Cass-Gottlieb said.
‘Consumers rely on apps to provide accurate information, and 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.
‘Digital platforms like Uber need to take adequate measures to monitor the accuracy of their algorithms and the accuracy of statements they make, which may affect what service consumers choose.
Uber and the ACCC have made submissions to the court for a fine of $26million to be imposed
‘This is particularly important as online businesses often carefully design their user interfaces to influence consumer behaviour.’
Uber said in a statement it had worked to resolve the issues since they were brought up by the ACCC.
‘We have 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,’ they said.
‘The ACCC has not alleged that Uber was charging cancellation fees in circumstances where no fee should have applied.
‘Over time we have constantly evolved our offering, looking for ways to create better customer experiences, trial new products and invest in our technology. We are committed to continually raising the bar – for ourselves, our industry, and most importantly for the people who use our services.
‘As always, we will continue to listen to feedback from driver-partners and riders to make sure that the service we are offering continues to meet their needs.
‘Uber and the ACCC will jointly seek orders from the Federal Court, including for Uber to pay $26 million in penalties. The Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate.’