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Uber is being sued by the competition watchdog for telling two million customers they could be charged a fee for cancellations that were actually free and for inflating the predicted price of regular taxis booked on its platform.
The ride-sharing giant has already admitted the breach in a settlement with the Australian Competition and Consumer Commission (ACCC), and the Federal Court will determine whether the agreed $26 million penalty is appropriate.
Uber typically has a free cancellation period of five minutes after a driver has accepted a trip. However, between at least December 2017 and September 2021 it told consumers wanting to cancel in that time: “you may be charged a small fee since your driver is already on their way”.
Uber has agreed to make joint submissions with the ACCC for a $26 million fine.Credit:AP
Uber changed it in September 2021 to read: “You won’t be charged a cancellation fee”.
It is the latest of a series of transgressions by Uber, including a record $203,500 fine from the NSW taxi regulator in 2021 for a host of breaches, including failing to tell it about assaults by and against drivers.
The legal problems pose a mounting problem for the company, which has been trying to turn around its image since its controversial co-founder Travis Kalanick resigned amid pressure from investors in 2017. He had presided over an aggressively expanding company that faced allegations of sexism, had battled regulators and dodged law enforcement.
Uber has already admitted to misleading consumers over the cancellation fee and taxi issues, and will make a joint submission with the ACCC to the Federal Court to approve a $26 million fine and declaration that Uber breached consumer law.
“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 ACCC chair Gina Cass-Gottlieb.
In a statement on its website, Uber said it had reached a settlement position with the ACCC on Tuesday over what it called “historical issues”.