Australia's competition watchdog sues Uber for misleading fares

The Uber logo on a grey and black background

The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Uber alleging the ride hailing firm misled customers about fares.

According to the lawsuit, between December 2017 and September 2021 Uber misled customers about the free cancellation period after a ride was booked. It displayed a message "You may be charged a small fee since your driver is already on their way" when a user tried to cancel the cab during the free cancellation period. The ACCC further noted that Uber acknowledged that the text was misleading and in September 2021 it updated the text to clarify that users won't be charged if they cancel the ride during the free cancellation period.

ACCC Chair Gina Cass-Gottlieb said:

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.

Apart from that, Uber also miscalculated the fares for about two years. According to the ACCC, Uber showed inflated pricing for UberTAXI, a service that was limited to Sydney. The estimated fare for UberTAXI shown in the app was always lower than the cheapest option available. Uber displayed the inflated prices between June 2018 and August 2020, after which, the UberTAXI option was removed.

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.

Uber acknowledged both the allegations in a separate press release and confirmed that they will jointly seek orders from the Federal Court. The ACCC has filed the lawsuit for A$26 million ($18.69 million), however, "the Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate."

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