American ride hailing company Uber Technologies Inc. (UBER) has been sued by the Australian competition regulator Australian Competition and Consumer Commission (ACCC) for misleading consumers about ride fare estimates and cancellation fees.
Uber admitted to the allegations and ACCC is seeking a A$26 million ($18.69 million) fine for the United States based company. On April 26, Uber admitted that for the period 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,” said the chair of ACCC, Gina Cass-Gottlieb.
According to ACCC Uber also admitted to having falsely represented fare estimates for its Uber Taxi option as its algorithm would almost hike the range and the actual fare would be lower than Uber’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,” added Cass-Gottlieb.
On the receiving end, Uber claimed that ever since the issue was raised by the regulator, it has worked to streamline its in-app messages to make it clear exactly when cancellation charges will or will not apply, per occasion, so that riders always have certainty.
