After admitting to deceiving consumers about trip pricing estimates and cancellation penalties, Australia’s competition authority has filed a lawsuit against Uber Technologies, demanding a fine of AUD 26 million (approximately Rs. 140 crores).
According to the Australian Competition and Consumer Commission, Uber B.V., a Dutch subsidiary of San Francisco-based Uber Technologies Inc., admits to breaking Australian Consumer Law by providing false or misleading representations in its app.
The first transgression derives from a no-cost cancellation policy that permits customers to cancel a reservation up to five minutes after a driver has accepted the trip. Uber confirmed to the Australian Competition and Consumer Commission (ACCC) on Tuesday that it advised customers they will be charged costs for cancelling rides between December 2017 and September 2021, even if the cancellation was requested during its “free cancellation period.”
“Uber concedes it deceived Australian consumers for years and may have prompted some of them to choose not to cancel their journey after getting the cancellation notice, even though they were allowed to do so free of charge under Uber’s own policy,” said ACCC Chair Gina Cass-Gottlieb. Uber also acknowledged misrepresenting fare estimates for its Uber Taxi option, according to the ACCC, because its algorithm would nearly always exaggerate the range and the real fare would be lower than the company’s lowest estimate. “Uber’s app’s deceptive information deprived users of the opportunity to make an educated decision about whether or not to take an Uber Taxi,” Cass-Gottlieb stated.
Uber claimed it had “worked to simplify our in-app notifications to make it clear exactly when cancellation costs will or will not apply, per occurrence, so that passengers always have confidence” since the ACCC addressed the problem. The ACCC and Uber are jointly seeking court judgments, including statements that the ride-hailing app violated Australian consumer law and fines, according to the regulator.
