Uber will pay almost $272m to compensate taxi and hire-car drivers who lost out when the rideshare company “aggressively” moved into the Australian market.

Maurice Blackburn Lawyers, which brought the class action suit on behalf of Australian taxi drivers and chartered drivers, announced that the case, which was set to go to trial, will be settled, with Uber agreeing to pay $271.8 million - the fifth-largest settlement in Australia ever.

The class action suit, which has run for five years, centres on Uber’s launch into Australia before it was legalised and the impact of this on taxi drivers, particularly those who had paid for expensive licences.

The case was initially brought on by Melbourne taxi driver Nicos Andrianakis, and was expanded to include more than 8,000 taxi drivers and chartered drivers, who argued Uber had harmed them financially by operating UberX across the country illegally.

Uber issued a statement saying that when it began operating more than a decade ago, “ridesharing regulations did not exist anywhere in the world, let alone Australia”.

“Today is different, and Uber is now regulated in every state and territory across Australia.

“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.”

UBER RESISTANCE:

Maurice Blackburn Lawyers principal Michael Donnelly said the settlement “puts beyond doubt” that Uber has now been held to account for the method it adopted upon launch in Australia.

“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,” Donnelly said in a 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.”

When the case was launched in 2019, Andrianakis described the impact of Uber’s launch on him and his family.

“My family has always been into taxis, my father drove taxis…my son drove taxis while he was at uni,” he told the ABC.

“But when Uber came to our shores illegally, like pirates, they broke every law, every regulation.”

The settlement will “finally put real money back into the accounts of people who have been devastated”, Donnelly said.

“We are extremely proud that thousands of people put their faith in us and Nick Adrianakis and allowed us to do what we do best – holding to account major organisations that we say inflicted mass wrongs on people,” he said.

“This case succeeded where so many others have failed. In Victoria, Queensland and Western Australia, cases were brought against governments and all of them failed.

“What our group members asked for was not another set of excuses – but an outcome – and today we have delivered it for them.”

A WIN FOR TAXI DRIVERS:

The class action alleged that the drivers had lost income and the value of their licences for taxis, hire cars, limousines, and charter vehicles because of the launch of Uber into Australia when it was unlicensed.

Uber first launched its UberX service in Australia in Sydney in 2012, initially doing so outside of the law.

The ACT became the first Australian jurisdiction to legalise ridesharing in 2015, followed by New South Wales and then the rest of the country.

When ACT began regulating Uber, it cut taxi licence fees by 50 per cent in the first year then another 50 per cent the following year, meaning it dropped from $20,000 to $5,000.

The territory government also required ridesharing drivers to pass various safeguards such as criminal and driver history checks.

In late 2022, Uber was ordered to pay a $21 million fine after it admitted to engaging in misleading or deceptive conduct and to making false or misleading representations to consumers following legal action brought on by the Australian Competition and Consumer Commission.

Uber admitted to misleading its users about cancellation fees if they booked through its Uber Taxi service.

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