Monday, 23 April 2018

AUSTRALIA: Uber Eats Under Investigation By Australian Competition And Consumer Commission, ACCC

Australia's competition regulator has signalled that it plans to investigate Uber's allegedly unfair contracts with restaurant owners who have signed up to its Uber Eats delivery app.

There have been complaints from restaurant owners who allege their contracts with Uber are unfair and impose onerous obligations on them.

Josh Arthurs, the owner of Burgers by Josh, who cut his ties with Uber and criticised the California based multinational for charging restaurant owners a 35 per cent commission.

Mr Arthurs also slammed Uber for recently amending its refund policy to require restaurateurs to pay a percentage of customer refunds in the case of missing or incorrect food items.

This is even in situations where he alleges it is unclear whether the restaurant or driver is at fault.

Certainly, we'll have a look at it, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said.

We have three bits of the law we can deal with here.

One is business-to-business, are they misleading the people they're dealing with?

Two is, are they engaged in unconscionable conduct, putting all the conduct together?

Thirdly, are the terms with which they work unfair? So, there's a lot to look at there.

For conduct to be unconscionable under consumer law, it needs to be more than just unfair.

On its website, the ACCC said it would look for any conduct which is particularly harsh or oppressive or which goes against good conscience judged against the norms of society.

Among other things, the regulator will consider the relative bargaining strength of the parties and the use of undue influence or unfair tactics by the stronger party, Uber in that case.

In addition, the ACCC will also consider whether the terms imposed went beyond what is reasonably necessary to protect the stronger party's legitimate interests.

We will work with the ACCC should they wish to investigate, an Uber Eats spokesperson said.

The ACCC can reach out to us directly with any questions they may have.

The issue revolves around the terms restaurant owners must accept if they want to have their food delivered through Uber Eats.

Firstly, they have to agree that Uber doesn't provide any delivery or logistics services, even though Uber boasts that we deliver in several sections of its website.

The Uber Eats contract also states that the drivers are the agents of the restaurant, even though it's Uber that pays them and controls their workflow.

Furthermore, if the food becomes substandard for example hot food falling below 60 degrees Celsius, Uber has the power to demand that the restauranteur cover the customer refund.

The restaurant could give a piping hot pizza to the Uber driver.

But by the time it gets to the consumer, because of the route the driver takes, or the number of deliveries he takes along the way, it could be stone cold.

Mr Robertson said Uber seemed to be imposing this fiction to shift responsibility for deliveries, even though the restaurant owners have no control over the Uber delivery driver's wages or workflow.

If the ACCC decides to take this matter to court, and provided the judge decides the contract is unfair, the offending terms will be void, or non-binding for the weaker party which is the restaurant owner in this instace.

This applies to standard form contracts that were entered into after November 12, 2016, as long as one of the parties is a small business like 20 employees or less.

A standard form contract is one that has been prepared by one party, say Uber and where the other party has little or no opportunity to negotiate the terms.

Essentially, it would be on a take it or leave it basis.

Furthermore, the upfront price payable under the terms is no more than $300,000 or $1 million if the contract is for more than 12 months.

A typical example of an unfair term is one that allows the stronger party but not the other to avoid or limit their responsibilities in their contract.

The ACCC may look into what Uber told the restaurants, and compare it with what's actually in the contract.

Did Uber tell the restaurants that it performs delivery services, and would be responsible for quality control over their food?

Contrary to that, when you look in the contract, it says something different as Uber claims it's not a delivery service but a technological platform.

The contract also says the restaurant owners not Uber are responsible for quality control, even when the drivers have taken the food off their hands.

Lets watch for the outcome.

Tourism Observer

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