Uber to pay $272 million to Australian taxi operators

Nicos Andrianakis’ 40-year-old taxi business was “all he knew” before ride-share giant Uber arrived in Melbourne in 2014.

The mass disruption of Ubers rolling out onto the city’s streets decimated the value of his three taxi licence plates – worth about $500,000 each.

“I lost my passion for work, I lost my [registered taxi licence] plates worth half a million dollars each, and I lost my income that provided food on the table,” he said.

Former taxi driver Nick Andrianakis, lead plaintiff in the class action against Uber, and Michael Donelly, class action principal lawyer at Maurice Blackburn Lawyers, outside the Supreme Court.Credit: Paul Rovere

After five years of pursuing a class action lawsuit against Uber on behalf of 8000 taxi operators, Andrianakis stood on the steps of the Supreme Court of Victoria on Monday morning following a historic settlement of $272 million – the fifth-largest class action settlement in Australia’s history.

“Today I’m very pleased as this hasn’t been done before,” he said. “We suggested that Uber acted illegally and they needed to pay, and that they have today.”

On the cusp of a 10-week trial, the ride-share giant settled the lawsuit in a short court hearing.

The class action, brought by Maurice Blackburn Lawyers in 2019, was filed on behalf of more than 8000 taxi and hire car owners and drivers who said they lost income when Uber entered the Australian market.

The class action was filed on behalf of more than 8000 taxi and hire car owners and drivers.Credit: Ryan Stuart

Maurice Blackburn principal Michael Donelly said 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”.

“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 Maurice Blackburn launched the class action 2019, it outlined its key argument that Uber knew its operations in Australia were illegal because the company understood that its drivers were not properly licensed and did not have proper accreditation.

”Uber said that was innovation, and we said it was illegal – a conspiracy by unlawful means,” Donelly said on Monday.

“We also alleged that in conducting Uber X operations, Uber engaged in a variety [of] shocking conduct. We said that they misled regulators, geo-blocked authorities, and even went so far as to activate an electronic kill switch to disrupt a search warrant while in progress.”

Nick Andrianakis and Michael Donelly speak outside the Supreme Court of Victoria on Monday.Credit: Paul Rovere

How the $272 million would be split among the 8000 class action members would be determined via a formal process through the court, but the amount would not be divided equally, Donelly said.

“There are a variety of group members within that cohort range, from taxi licence owners like Nick Andrianakis all the way through to people who drove taxis part-time, two days a week in Queensland,” he said.

“It’s plain in those circumstances that dividing the settlement will not be done purely on an equal basis, because the claims have different amounts of loss.”

Donelly said his firm’s costs would likely be in the order of $30 million to $35 million, and that the rising legal costs of going to trial factored into the decision to settle.

“That level of uncertainty and that imposition of labour costs was the other side of the point that we sought to balance in achieving a record settlement,” he said.

An Uber spokesperson said the regulatory environment had changed markedly since the company entered Australia.

“When Uber started more than a decade ago, ride-sharing regulations did not exist anywhere in the world, let alone Australia,” the spokesperson said. “Today is different, and Uber is now regulated in every state and territory across Australia, and governments recognise us as an important part of the nation’s transport mix.

“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.”

The spokesperson said that while Uber and the plaintiffs had reached an in-principle settlement, it would be inappropriate to comment on specifics until the agreement was finalised and the settlement had been disclosed to the court.

Transport Workers’ Union national secretary Michael Kaine welcomed the news and said that when the gig economy arrived in Australia, the nation’s laws and courts couldn’t keep up because of a lack of regulation.

Credit: Matt Golding

”This is a significant outcome for the thousands of drivers who stood together, and Maurice Blackburn who stood alongside them over a five-year battle,” Kaine said.

“We know this decision won’t right past wrongs … But it’s now time to look to the future and how we can set standards to make the industry better for all participants.”

Uber drivers will have minimum standards, including conditions and pay rates, set up by the Fair Work Commission after amendments to the Fair Work Act passed in February. Uber has welcomed those changes, which will come into effect in August.

At present, the US-based company is worth about $US157 billion ($240 billion). Late last year, Uber listed taxis on its app in Melbourne, a partnership that in the past would have been unthinkable.

When Uber launched in Australia in 2014, taxi drivers went on strike and took to the streets to protest.

Another civil proceeding against Uber is going ahead to trial in coming weeks, the court heard – a case brought by Taxi Apps Pty Ltd.

Donelly said the key message that the class action settlement sent to Uber and other ride-sharing companies was “about the importance of the rule of law in this country and the importance of class actions”.

“While people may think that they have gotten away with things for periods of time, having a strong class-actions regime in this country, backed by talented lawyers, and courageous and passionate group members, means that people can never walk away from what they have done.”