UBER Uber Technologies Inc

By Alice Uribe

SYDNEY-- Australia's consumer regulator has initiated court proceedings against Uber Technologies Inc., after the ride sharing giant admitted that it had made false or misleading statements in trip cancellation warning messages and Uber Taxi fare estimates.

The Australian Competition and Consumer Commission on Tuesday said that Uber and the regulator would jointly seek orders from the Federal Court for the company to pay a 26 million Australian dollar (US$18.8 million) fine for the contraventions of the country's consumer law.

Between December 2017 and September 2021, Uber's app warned riders that they may be charged a fee when they were seeking to cancel a ride within Uber's "free cancellation period." Many Uber services have a five-minute period where users can cancel a ride after a driver accepts a trip without incurring a fee.

"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.

ACCC, which conducted a two-year investigation, said over two million consumers were shown the misleading cancellation warning.

"Since the ACCC raised this, we have worked to streamline our in-app messages to make it clear exactly when cancellation charges will or will not apply, per occasion, so that riders always have certainty," said Uber in a statement Tuesday.

The ACCC also said that Uber had admitted that between June 2018 and August 2020 its algorithm falsely inflated the estimated cost of booking through its Uber Taxi option, so that the actual fare was "almost always" cheaper than the estimate displayed.

"We value the important work the ACCC carries out and have cooperated with the ACCC throughout its two year investigation, including proactively making changes to our platform based on the concerns they raised," said Uber.

The ACCC and Uber are jointly seeking orders from the Federal Court, including declarations that the company breached Australia's consumer law, with the court to decide whether the orders and penalties sought are appropriate, said the regulator.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

April 26, 2022 02:17 ET (06:17 GMT)

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