Uber Technologies was fined 21 million Australian dollars ($14 million) by an Australian court for threatening cancellation costs it never implemented and inflating the cost of some rides.
According to the Federal Court ruling, the Australian division of the US ride-sharing app violated consumer law by giving customers false notices that they would be charged for canceling some rides from 2017 to 2021 and by using an unreliable software algorithm to calculate prices for a taxi service it provided up until August 2020.
Uber apologized to Australians in a post on its website “for the mistakes we made, and we have since proactively made changes to our platform based on the concerns raised with us”.
In a written ruling, Judge Michael Hugh O’Bryan stated that by providing false information on its mobile app, Uber “would be expected to lead a proportion of consumers to alter their decision and not proceed with the cancellation and perhaps deter future cancellations”, while skewing the demand for its service.
The Australian Competition and Consumer Commission (ACCC), which filed the lawsuit against Uber, and the tech company had already reached an agreement on a fine of 26 million Australian dollars ($17.39 million), but O’Bryan informed the court that the evidence presented by both parties was “grossly inadequate,” leaving him to make assumptions about the harm to consumers.
According to the evidence presented, less than 0.5% of Uber users choose to proceed with a trip despite cancellation costs. Only 1% of all Uber rides used the UberTaxi service, according to the judge, as the algorithm consistently overestimated the fee.
Based on a statement given by ACCC Chair Gina Cass-Gottlieb, the fine “clearly signals to businesses that misleading consumers about the cost of a product or service is a serious matter which can attract substantial penalties”.
According to Cass-Gottlieb, the judge had made clear that the lower penalty “should not be understood as any reduction in the court’s resolve to impose penalties appropriate to deterring contraventions of the Australian Consumer Law”.
Author- Roberta Appiah
