Uber pays Aussie taxi drivers $272m in class action settlement

US technology giant Uber Technologies has settled in a class action lawsuit brought by a law firm on behalf of Australian taxi drivers, agreeing to pay $272 million. It is the fifth-largest class action settlement in Australian legal history.

Maurice Blackburn Lawyers and former taxi driver Nick Andrianakis, who was the main plaintiff in the action, attended the Supreme Court of Victoria on Monday morning to close out a case that began in 2019.

The class action grew to incorporate more than 8000 taxi and chartered drivers. They said Uber had harmed them financially by setting up and running its UberX services in Australia illegally.

The case was due to run until May 17. But a deal has been struck, and was detailed on Monday morning.

In a statement, Maurice Blackburn Lawyers Principal Michael Donelly said the historic settlement followed a gruelling five-year 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,” he said.

“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.”​

Uber ‘like pirates’

The case against Uber was for lost income for drivers and loss in the value of licences bought by the owners of taxis, hire cars, limousines and charter vehicles, when Uber launched with cheaper and more convenient services, despite being unlicensed.

Uber first launched in Australia in Sydney in 2012, operating outside the law, and often facing furious protests from the taxi industry. The ACT was the first Australian jurisdiction to allow ride-sharing services such as UberX to operate legally in 2015. NSW followed soon after, before the rest of the country.

When Uber was legalised in NSW in December 2015, the state government added a $1 levy for every trip for up to five years to compensate taxi licence owners.

Mum and dad investors in taxi licences were told they would receive an up-front compensation of $20,000 for up to two licences. Taxi licence owners who had bought the licence in 2015 would receive the maximum compensation of $175,000 from the government.

There was no compensation for licence owners who bought the licence before 2006.

Quoted by ABC news in 2019, Mr Andrianakis said he was forced out of business by Uber’s popularity.

“My family has always been into taxis, my father drove taxis … my son drove taxis while he was at uni,” he said. “But when Uber came to our shores illegally, like pirates, they broke every law, every regulation.”

Mr Donelly said the settlement was in the top five class actions in Australian legal history, and “put beyond doubt” that Uber had been held to account for its actions.

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

“A $271.8 million sum will finally put real money back into the accounts of people who have been devastated.”

In a statement, an Uber spokesman sought to highlight that the ridesharing service was now regulated in every state and territory across Australia, and that governments recognised it 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 spokesman 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.”