An Australian court on Wednesday fined Uber Technologies Inc A$21 million ($14 million) for threatening cancellation fees it never charged and overstating fare estimates on some rides. The fine was lower than the regulator wanted. The Australian arm of a US ride-sharing app broke consumer laws by misleading customers by warning they would be charged for canceling some rides between 2017 and 2021 and using an inaccurate software algorithm to estimate prices for a taxi service it offered until August 2020. a federal court ruled.
In a post on its website, Uber said it apologized to Australians “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 said that by providing inaccurate information on its smartphone app, Uber “would be expected to cause a portion of consumers to change their decision and not continue to cancel and possibly discourage future cancellations,” while the misrepresentations demand for his service.
The Australian Competition and Consumer Commission (ACCC), which brought the case against Uber, and the tech firm had already agreed to a fine of A$26 million, but O’Bryan told the court that the evidence provided by both sides was “grossly insufficient”. and left him speculating about consumer damage. The evidence provided suggested that less than 0.5% of Uber customers took the trip because of concerns about cancellation fees. UberTaxi’s algorithm beat the fare estimate 89% of the time, but less than 1% of all Uber rides used the service, the judge said.
ACCC chairwoman Gina Cass-Gottlieb said in a statement that the fine “sends a clear signal to businesses that misleading consumers about the price of a product or service is a serious matter that can lead to heavy penalties”. The judge made it clear that the lower sentence “should not be construed as any reduction in the court’s determination to impose sanctions appropriate to … deter breaches of Australian consumer law”, Cass-Gottlieb added.
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