Uber Australia to pay $178M to settle cabbies' class action

Nice payday for some, but plenty of Australians still pay extra to help drivers

Uber's Australian wheel has agreed to pay AU$272 million ($178 million) to settle a class action brought by cab drivers who claimed their incomes were impacted by the rideshare giant's scofflaw debut down under.

The class action, Andrianakis v Uber Technologies Inc & Ors, was brought by a class of plaintiffs who were taxicab or hire car drivers, operators or licence holders during periods within 2014 to 2017.

Uber operated illegally in Australia during those years, despite laws that made it plain only licensed cabs and hire cars were allowed to carry passengers for cash. Then, as now, Uber argued that was providing a new category of service, so existing regulations didn't apply.

At the time, Australia's taxi monopoly was maddeningly cozy. In your correspondent's home of Sydney taxi drivers all changed shift at 3:00PM, creating a city-wide taxi drought that made getting to afternoon meetings a chore (and made it sensible to order another bottle of wine if lunch conversation was still bubbling along at 2:30PM). If taxi operators had given a moment's thought to how smartphones could improve their service, the results were not available to the public.

Uber debuted, increased the supply of rides, cut prices, and won substantial market share at the expense of drivers and license owners who soon endured a massive dose of digital disruption.

In 2019 law firm Maurice Blackburn, with help from litigation funders, created a class action that was due to reach court in coming days.

The firm today claimed that Uber "blinked" before the matter went before a Supreme Court judge.

Uber Australia has preferred to characterize the matter as "Settling historic taxi claims."

"When Uber started more than a decade ago, ridesharing regulations did not exist anywhere in the world, let alone Australia," states an Uber announcement. "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."

Left unsaid is that some of the compensation schemes implemented in Australia cost passengers money. In the state of New South Wales, for example, passengers pay a AU$1.20 (80c) "passenger service levy" every time they hop into a cab or Uber, and will do so until a AU$905 million ($594 million) compensation package to cabbies is complete.

Uber's past indiscretions therefore contributed to the cost of every cab and Uber ride taken by the state's eight million residents for years.

Uber has described today's announcement as "an in-principle settlement" and Maurice Blackburn hasn't yet detailed how much cash will end up in plaintiffs' pockets. ®

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