Wednesday, 17 July 2019 11:40

ACCC forces changes to Uber Eats ‘unfair’ contracts Featured

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Food delivery service Uber Eats is changing its contracts with restaurants following an investigation by the competition regulator, the ACCC.

The Australian Competition and Consumer Commission said on Wednesday that Uber Eats had committed to changing its contracts after its investigation found that from at least 2016, the company’s contract terms made restaurants responsible for the delivery of meal orders, in circumstances where they had no control over that delivery process once the food left their restaurant.

The ACCC says that Uber Eats’ contract terms gave it the right to refund consumers and deduct that amount from the restaurant even when the problem with the meal may not have been the fault of the restaurant.

“Following our investigation, Uber Eats has committed to changing its contract terms that we believe are unfair, because they make restaurants responsible and financially liable for elements outside of their control,” ACCC chair Rod Sims said.

“We consider these terms to be unfair because they appear to cause a significant imbalance between restaurants and Uber Eats; the terms were not reasonably necessary to protect Uber Eats and could cause detriment to restaurants.”

Uber Eats has agreed to amend these terms, to clarify that restaurants will only be responsible for matters within their control such as incorrect food items or incorrect and missing orders.

Sims said that under the amended contracts, restaurants would also be able to dispute responsibility for any refunds to customers and Uber Eats would “reasonably consider these disputes”.

“We will continue to monitor Uber Eats’ conduct to ensure restaurants are not unfairly held responsible for matters outside of their control and Uber Eats does not hold anyone else responsible for parts of the service it controls," he said.

“Ensuring small businesses aren’t subject to unfair contract terms by larger businesses is one of our top priorities.”

“Business are warned that if they include unfair contract terms in their contracts, they will risk close scrutiny from the ACCC.”

Under the Australian Consumer Law as it presently stands, a large business including or relying upon an unfair contract term against a smaller business is not illegal and penalties cannot be imposed for such conduct. However, a court can declare such terms to be void and not enforceable.

“We have called for legislative changes so the ACCC can seek penalties and compensation for small businesses where large businesses impose unfair terms.” Sims said.

“We welcome the government’s commitment in March this year to consult on options to strengthen unfair contract term protections for small business.”

In addition to the contract terms, the ACCC is also investigating whether a contract clause which referred to Uber Eats not providing logistics services was misleading.

Sims said the ACCC was concerned by these terms given Uber Eats’ role in determining the pool of drivers available to restaurants, their payments, and providing facilities such as the consumer’s address, map services and GPS tracking to assist the driver in delivering meals.

“Uber Eats also agreed to remedy this clause,” Sims said.

“We welcome Uber Eats agreeing to remove the statement in its contracts saying it does not provide logistics services, because clearly, in our view they do.”

Uber Eats will begin rolling out changes to its contracts shortly, with completion scheduled by December.

And Sims said Uber Eats had committed not to enforce the terms that the ACCC considers to be unfair while these changes are completed.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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