In shocking news, an Australian court fined Uber Technologies Inc a total of A$21 million, that is 14 million US dollars on Wednesday. The reason behind the fine imposed was canceling fees that were never charged and charging more than the estimated fare on some rides.
The penalty was less than the regulator wanted.
The Federal court ruled that the Australian branch of Uber committed many defaults like breaking consumers’ law by misleading the customers. The app informed the customers with warnings that they would be charged extra if they canceled rides from 2017 to 2021.
Moreover, the app used an inaccurate software algorithm to calculate fares for the taxi services it offered until August 2020.
By supplying inaccurate information on its smartphone app, Uber “would be expected to lead a proportion of consumers to alter their decision and not proceed with the cancellation and perhaps deter future cancellations”, while “suppressing demand” for the taxi service, said judge Michael Hugh O’Bryan in a written ruling.
The case was highlighted and brought in front of the judiciary by the Australian Competition and Consumer Commission (ACCC).
The US tech firm had already agreed on a fine of A$26 million until O’Bryan informed the court that the evidence displayed by both sides was “grossly inadequate” and to speculate on the harm inflicted upon the consumers.
According to a judge, the evidence provided to the court showed that less than 0.5% of customers of the Uber app had gone farther with a trip due to the fear of cancellation fees.
Further, the algorithm that overshot the taxi fare estimated 89% of the time, but only less than 1% of the total rides used that service.
Uber said in a post on its website that 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”.
ACCC Chair Gina Cass-Gottlieb said in a statement that the fine “clearly signals to businesses that misleading consumers about the cost of a product or service is a serious matter which can attract substantial penalties”.
The judge had made clear that the lower penalty “should not be understood as any reduction in the court’s resolve to impose penalties appropriate to … deterring contraventions of the Australian Consumer Law”, Cass-Gottlieb added. ($1 = 1.4945 Australian dollars)