 "Why is Uber paying $178 million to Australian taxi drivers?")
Uber will pay A$271.8 million ($178 million or Rs 1,480 crore) to thousands of taxi drivers and operators in Australia in the first such class action settlement in the world. The lawsuit was filed in 2019 by Maurice Blackburn Lawyers on behalf of more than 8,000 thousand taxi and hire-car owners and drivers who alleged they lost income when the rideshare company “aggressively” moved into the country.
The class action was to go to trial in the Supreme Court of Victoria on Monday (18 March), however, Maurice Blackburn Lawyers said the case would be dropped after the ride-hailing giant agreed to the financial settlement, reported Associated Press (AP).
Let’s take a closer look.
Uber to cough up A$272m
Uber will pay millions in compensation to taxi and hire-car owners and drivers as they lost income and licence values after the ride-hailing app entered the Australian market in 2012.
According to Maurice Blackburn’s principal lawyer Michael Donelly, the settlement comes after five “gruelling” years of legal battle.
“Uber fought tooth and nail at every point along the way, every day, for the five years this has been on foot, trying at every turn to deny our group members any form of remedy or compensation for their losses,” News.com.au reported citing the law firm’s statement.
“But on the courtroom steps and after years of refusing to do the right thing by those we say they harmed, Uber has blinked, and thousands of everyday Australians joined together to stare down a global giant.”
Impact Shorts
More ShortsLawyers claimed Uber X launched in Australia to hurt local taxi and hire-car drivers. They also accused the US company of using unlicensed cars with unaccredited drivers in a “conspiracy by unlawful means”, misleading regulators and geoblocking authorities, The Guardian reported.
Nick Andrianakis, a taxi driver in Melbourne, who was forced out of business when Uber hit the Australian market was the lead plaintiff in the case against the rideshare giant.
“When Uber came to our shores illegally, like pirates, they broke every law, every regulation,” he said at the time, as per ABC (Australian Broadcasting Corporation).
Andrianakis called the recent settlement “a win for small businesses of mum and dad investments, a win for taxi drivers, taxi operators [and] hire car operators”.
This is the fifth largest class action settlement in Australia’s history.
How will Uber pay?
Uber has to “find that money” to compensate taxi and hire-car drivers, operators and licence holders, Robert Nicholls, an associate professor in regulation and governance at the University of Sydney, told ABC.
The Supreme Court of Victoria has to formally approve the proposed settlement before Uber pays.
The ride-hailing app said in a statement, “It would be inappropriate to comment on specifics until the agreement is finalised and the settlement is disclosed to the court”.
“Since 2018, Uber has made significant contributions into various state-level taxi compensation schemes, and with today’s proposed settlement, we put these legacy issues firmly in our past”, BBC quoted the statement as saying.
It noted that ridesharing regulations did not exist anywhere in the world when the company started in 2009. “Today is different, and Uber is now regulated in every state and territory across Australia,” the statement further said.
“We will continue focusing on helping the millions of Australians who use Uber get from A to B in a safe, affordable and reliable manner,” the San Francisco-based company added.
So, how will Uber pay?
Due to stiff competition for Uber in the country, the company cannot “pass the cost of the class action onto its Australian ridesharers”, Dr Nicholls told ABC.
Uber may increase fares for riders but it is not that simple. “For consumers, there’s a risk that will mean more expensive Uber fares, but that risk is tempered by the fact that, well, now the rules are fixed,” Dr Nicholls said.
“Other people can come in and play, like DiDi or Ola, and that means it’s going to be quite hard for Uber to just jack up fares to recover the amount they’ve spent in the class action.”
Uber’s legal troubles across the world
This is not the first time Uber has found itself in a controversy. The ride-hailing service has courted criticism for taking business from regular taxis and has often seen disputes over pay and working conditions with its drivers.
Uber is present in over 70 countries and more than 10,000 cities worldwide. It has faced several protests from taxi drivers globally over the years.
In February, drivers for Uber and Lyft and food delivery riders for DoorDash staged protests in the United States, seeking fair pay and better treatment, Reuters reported. Similar strikes were reported in the United Kingdom with food-ordering platforms including Deliveroo and Uber Eats protesting on Valentine’s Day.
Last November, Uber and Lyft agreed to pay a total of $328m in compensation to drivers in New York after being accused of withholding wages and not providing paid sick leave to them. In July 2022, Uber agreed to a $1.7 million settlement in the US for charging wait fees from disabled riders who needed extra time to get in their cars.
The ride-hailing app coughed up $20 million in March 2019 to settle a dispute with drivers in the US who claimed they were Uber’s employees and sought certain wage protections. In September 2022, Uber reportedly entered a $8.4 million settlement with California drivers who sued it for misclassifying them as independent contractors instead of company employees.
Last December, Uber won a lawsuit brought against it by about 2,500 French taxi drivers, who sought $495.4m. A Paris commercial court ruled that the US company had not committed acts of unfair competition, BBC reported.
The ride-hailing service’s licence has been stripped many times in London since 2017.
In India, the company drew flak after an Uber driver in New Delhi was accused of rape in December 2014. The Uber Files, a data dump of 124,000 records from the 2013-17 period accessed by The Guardian in 2022, revealed how this case and a series of sexual harassment and privacy scandals led to the ouster of Uber co-founder and CEO Travis Kalanick in 2017.
Germany banned Uber Black, a limousine call service offered by the ride-hailing service, in 2018.
Uber forked out $2.79 million payout in the Netherlands in 2019 over unlicensed taxi services in 2014-2015.
With inputs from agencies
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