Uber agrees to pay fine for misleading users over cancellation fees

SYDNEY — Uber UBER 5.22%

Technologies Inc. could pay around $19 million in penalties in Australia after the country’s competition regulator found it misled riders by warning of cancellation fees even within a designated no-cost window.

In a four-year period to the end of 2021, the ridesharing app warned more than two million Australian customers looking to cancel a trip during Uber’s free cancellation period that they could be charged a fee, which would likely cause passengers to rethink their cancellation, the Australian told the Competition and Consumer Commission on Tuesday. Most services, including UberX, have a five-minute window after a driver accepts a ride for passengers to cancel it at no cost.

The regulator also found that for about two years, Uber’s app showed inaccurate fare estimates for a now-defunct UberTaxi ride option.

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In separate statements, Uber and the ACCC said they had agreed to seek approval from the Australian Federal Court for a fine totaling A$26 million.

“Since the ACCC raised this issue, we have worked to streamline our in-app messaging to clearly indicate when cancellation fees will or will not apply, per occasion, so passengers always have certainty. “Uber said in a statement. The regulator did not allege that Uber was charging cancellation fees at times when no fees should have applied, Uber said.

This is the latest legal battle for the carpooling giant. In November, the US Department of Justice announced that it would sue Uber for charging waiting fees to passengers with physical disabilities.

In August, the taxi and rental vehicle regulator of New South Wales in Australia, home to Sydney, fined Uber and issued 13 improvement notices after a safety audit found revealed issues such as driver fatigue and passenger complaints.

Uber has also faced global sanctions for issues such as the classification of its drivers.

Uber may have caused some Australian passengers to decide not to cancel their trip after receiving the warning in error, ACCC chair Gina Cass-Gottlieb said.

In September, Uber changed its cancellation message for Australian services to let passengers know they would not be charged if they sought to abandon a trip during the free period, the ACCC said.

In the nearly two years to August 2020, Uber’s algorithm also wrongly inflated the estimated cost of booking through its UberTaxi option, so the actual fare was “almost always” cheaper than the estimate. displayed, the Australian regulator said.

UberTaxi was introduced in Sydney in 2013 and discontinued in mid-2020, having neither been popular nor well-promoted after UberX was introduced in 2014, the company said.

“UberTaxi rides have always been a small part of rides on the Sydney platform, although we apologize for that,” Uber said.

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

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