As thousands of riders continue to suffer from paying cancellation fees sans their faults, the ride-hailing major has admitted that it made false or misleading statements in cancellation warning messages and taxi fare estimates, the Australian Competition and Consumer Commission (ACCC) said on Tuesday.
Uber now faces $26 million (Australian dollars) in penalties for adopting those illegal practices.
For almost four years between December 2017 and September 2021, the Uber rideshare app displayed a cancellation warning to consumers who sought to cancel a ride saying words to the effect of 'You may be charged a small fee since your driver is already on their way', even when consumers were seeking to cancel a ride with Uber's free cancellation period.
More than two 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," ACCC Chair Gina Cass-Gottlieb said in a statement.
The misleading information on Uber's app "deprived consumers of a chance to make an informed decision about whether or not to choose the Uber Taxi option", she added.
According to the commission, the algorithm used to calculate the estimated fare range inflated these estimates so that the actual taxi fare was almost always lower than that range, and consequently cheaper than Uber's lowest estimate.
In India, as cab-hailing platforms grow in sheer size and number in India, local residents are facing similar troubles lately, the drivers have been forcing people to cancel their rides when drivers do not want to ferry them or find the travel fare less.
Most of the time, the drivers ask the riders to reveal what fare the Uber app is showing, and then decide if they want to take the ride or not depending on the amount and if it is in cash, forcing the riders to cancel the ride.