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An agreed $26 million fine for Uber over its misleading fares and cancellation fees seems excessive, a federal court justice says.
The Australian Competition and Consumer Commission launched court proceedings against Uber, after the company admitted engaging in misleading or deceptive conduct.
Between June 20, 2018 and August 31, 2020, customers who were using the Uber rideshare service in Sydney were given an inaccurate estimated fare range.
More than 130,000 trips were taken in that time frame with 89 per cent of customers charged a lower fare than was estimated.
Counsel representing the ACCC, Fiona Forsyth QC, said while riders were not charged more, the inaccurate estimates prevented consumers from making an informed decision.
Uber also admitted providing misleading cancellation messages to Australian customers between December 8, 2017 and September 20, 2021.
Riders were told they would incur a small fee when they tried to cancel, even if they did so during the free cancellation period.
The inaccurate message popped up for 7.39 million trips but only 27,313 people chose to continue with their ride instead of cancelling.
While only a small number of customers seemed to have been affected by the inaccurate message, Ms Forsyth said the misleading information could have changed customers’ future behaviour.
“It’s all about what the consumer takes from this,” she told the court on Monday.
Uber and the ACCC agreed on a penalty of $26 million for the offending, with an $8 million fine for the inaccurate fares and an $18 million fine for the cancellation messages.
But Justice Michael O’Bryan said the agreed penalty seemed excessive, with a $5 million fine more within range on the current evidence.
“I feel quite handicapped,” he told the court. “At the moment, I feel (the agreed penalty) is outside any range I would order.”
A $26 million fine would send a message to Uber and other large corporations that they could not mislead Australian customers, Ms Forsyth said.
“The penalty has to bite, it has to have impact,” she said. “This is an agreed position (with Uber). We say that with some force.”
Justice O’Bryan said he would need more evidence to show the financial impact of the inaccurate fares and misleading messages.
The case was adjourned so the parties could gather more material.
(Australian Associated Press)