Uber, the rideshare company, was fined AUD$21 million ($14 million) after it advertised a cancellation fee, which it did not charge in the end, and for overestimated fees for services.
The fine is almost AUD$5 million ($1.67 million) less than the one agreed by Uber and the Australian Competition and Consumer Commission (ACCC), which took the company to the court.
Even though the tradition is that the penalty is agreed by the parties and approved by judges, Justice Michael O’Bryan, while handing the sentence, said: “The suggested $26 million penalty greatly exceeds any amount I consider to be appropriate.”
The transport app admitted misleading or deceiving customers in two instances, but O’Bryan told the court the evidence provided by both sides was “grossly inadequate”.
“It left the court in the position of speculating whether any harm was suffered (by consumers) and if so, whether it was significant or trivial,” he said.
The first instance related to Uber Taxi, a service offered only in Sydney. Uber admitted that between June 2018 and August 2020 it told the customers that rides would fall within a displayed fare range, when the actual cost was lower than the lowest estimate.
Judge O’Bryan, while reducing a proposed AUD$6 million penalty for that contravention to AUD$3 million, said: “The fare estimate was an overestimate approximately 89 percent of the time.
“However, it is important to estimate that Uber overestimated the fare at the time of booking and the consumer ultimately paid a lower fare.”
In the second instance, the ride-sharing platform mislead customers who opted to cancel trips during a period of free cancellation by telling them that they may be charged a small cancellation fee. This deterred them from cancelling trips, and also set a precedent for the future.
No cancellation fee was ever charged.
Customers using Uber X, Uber Comfort and Uber Premier received the cancellation fee notice nearly 7.4 million times over a period between December 2017 and September 2021. In each case, only about 0.4 percent of customers chose not to go ahead with cancellation.
