The Australian Competition and Consumer Commission started Federal Court proceedings against the company after Uber breached Australian consumer laws by making false or misleading statements relating to cancellation fees.

It follows another big scalp for the ACCC last week when Trivago was hit with a $44 million fine for misleading consumers over hotel room rates.

The ACCC alleged that between December 2017 and September 2021, Uber’s app displayed a concellation warning telling user that they may be charged a fee because their ride was already on its way. This occurred even when the ride was within the free cancellation period which is five minutes after the driver has accepted the journey.

ACCC chair Gina Cass-Gottlieb said more than 2 million Australian consumers were shown the misleading cancellation warning.

“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,” she said.

Also, for a two-year period, Uber displayed an estimated fare range for the Uber taxi ride option which was wrong. The taxi option was available in Sydney up until August 2020.

“Uber admits its conduct misled users about the likely cost of the taxi option, and that it did not monitor the algorithm used to generate these estimates to ensure it was accurate,” Cass-Gottlieb said.

“Consumers rely on apps to provide accurate information and the misleading information on Uber’s app deprived consumers of a change to make an informed decision about whether or not to choose Uber’s taxi option.”

“Digital platforms like Uber need ti take adequate measures to monitor the accuracy of their algorithms and the accuracy of statements they make, which may affect what service consumers use.”