Uber agrees to pay fine for misleading users on cancellation charges
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2 min read . Updated: 26 Apr 2022, 06:58 PM IST - Ride-hailing giant faces roughly $19 million penalty in Australia
Uber Technologies Inc. could pay roughly $19 million in penalties in Australia after the country’s competition regulator found it misled riders by warning of cancellation charges even within a designated fee-free window.
During a four-year period through late 2021, the ride-hailing app cautioned more than two million Australian customers seeking to cancel a trip within Uber’s free cancellation period that they might be charged a fee, likely leading riders to rethink their cancellation, the Australian Competition and Consumer Commission said on Tuesday. Most services including UberX have a five-minute window after a driver has accepted a trip for riders to cancel without facing any charge.
The regulator also found that for roughly two years, Uber’s app displayed inaccurate fare estimates for a now defunct UberTaxi ride option.
In separate statements, Uber and the ACCC said they have agreed to seek approval from Australia’s Federal Court for a penalty totaling 26 million Australian dollars.
“Since the ACCC raised this, 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," Uber said in a statement. The regulator didn’t allege Uber was charging cancellation fees at times when no fee should have applied, Uber said.
It is the latest legal battle for the ride-hailing giant. In November, the U.S. Justice Department said it would sue Uber for charging wait-time fees to passengers with physical disabilities.
In August, the regulator for taxis and hire vehicles in Australia’s New South Wales—home to Sydney—fined Uber and issued 13 improvement notices after a safety audit found concerns such as driver fatigue and passenger complaints.
Uber has also faced penalties globally over issues including the classification of its drivers.
Uber may have caused some Australian riders to decide not to cancel their trip after incorrectly receiving the warning, ACCC Chairwoman Gina Cass-Gottlieb said.
In September, Uber amended its cancellation message for Australian services to tell riders they would not be charged if they sought to abandon a trip during the fee-free period, the ACCC said.
In nearly two years through August 2020, Uber’s algorithm also falsely inflated the estimated cost of booking through its UberTaxi option so that the actual fare was “almost always" cheaper than the estimate displayed, the Australian regulator said.
UberTaxi was introduced to Sydney in 2013 and discontinued in mid-2020, having been neither popular nor well promoted following the introduction of UberX in 2014, the company said.
“UberTaxi trips have always been a small portion of trips on the platform in Sydney, regardless we apologize for this," Uber said.
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This story has been published from a wire agency feed without modifications to the text