Two million Australians caught in Uber infringement, consumer watchdog finds
More than two million Australians have become entangled in an Uber breach, with the rideshare service admitting it has engaged in misleading or deceptive behavior.
On Tuesday, the Australian Competition & Consumer Commission (ACCC) announced that it had filed a lawsuit in Federal Court against Uber.
Watch ACCC Chair Gina Cass-Gottlieb speak to Sunrise about the violation above.
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Uber has admitted to violating Australian consumer law by making false or misleading statements in cancellation warnings and Uber Taxi fare estimates between December 2017 and September 2021.
During that time, Uber users who wanted to cancel a ride were warned: “You may be charged a small fee because your driver is already on the road.”
More than 2 million Australian consumers were shown the misleading cancellation warning. Credit: Dave Hunt/AAP
The ACCC found that consumers received the warning even if they wanted to cancel a ride within the app’s free cancellation period.
Most Uber services have a free five-minute cancellation period after a driver accepts the ride.
More than two million Australian consumers were shown the misleading cancellation warning, the ACCC said.
“Uber admits it has misled Australian users for several years and that some of them may have decided not to cancel their ride after receiving the cancellation warning, even though they had the right to cancel free of charge under Uber’s policy.”, ACCC President Gina Cass-Gottlieb said.
Uber changed its cancellation notice to “No cancellation fees” in September 2021 if users wanted to cancel their trip within the free cancellation period.
The ACCC also found that Uber incorrectly represented the estimated fare range for the Uber Taxi option for about two years.
“The algorithm used to calculate the estimated fare range inflated these estimates so that the actual taxi fare was almost always lower than that range, and therefore cheaper than Uber’s lowest estimate,” the ACCC said.
For two years, Uber incorrectly represented the estimated fare range for the Uber Taxi option. Credit: Patrick Semansky/AP
Uber admitted the mistake, and the Uber Taxi option, which was only available in Sydney, was removed.
“Uber admits that its conduct misled users about the likely cost of the taxi option and that it did not check the algorithm used to generate these estimates to ensure it was accurate,” Cass-Gottlieb said.
“Consumers rely on apps to provide accurate information, and the misleading information on Uber’s app deprives consumers of the opportunity to make an informed decision about whether or not to choose the Uber Taxi option.
“Digital platforms like Uber need to take appropriate steps to monitor the accuracy of their algorithms and the accuracy of their statements, which could affect the service consumers choose.
“This is especially important because online businesses often carefully design user interfaces to influence consumer behavior.”
Uber has agreed to join the court with the ACCC for fines totaling $26 million.