Resistance and patch protection
Uber has been battling a raft of legal challenges around the world.
AUSTRALIA In February, Uber lost a court challenge against a 2015 Australian Taxation Office decision that forced drivers to be registered to pay goods and services tax. The company argued its drivers didn’t need to be registered because they weren’t taxi operators. However, the court found Uber could be designated as a taxi service. Last year, Northern Territory banned Uber after refusing to change the law to accommodate the app’s legality.
UNITED STATES In June 2015, California’s Labour Commission ruled Uber driver Barbara Berwick was an employee and not an independent contractor. The company had argued it did not dictate driver hours and only provided the app to connect drivers and passengers. In 2016, Uber agreed to pay up to US$100 million to settle a class-action lawsuit, allowing it to keep its Californian and Massachusetts drivers as independent contractors. The company pulled out of Austin, Texas, last year after being told to fingerprint and background-check all drivers.
CANADA In March 2017, Uber drivers in Ontario launched a class-action lawsuit against the company asking the court to find they are employees, not independent contractors. Ride-share apps are not legal in Vancouver.
UNITED KINGDOM In October 2016, the Central London Employment Tribunal ruled Uber drivers were employees, not contractors, meaning they would qualify for the minimum wage, paid time off and other conditions. In April, Uber was granted the right to appeal.
FRANCE In June 2016, a French court fined Uber and two of its executives for running an illegal transport service with non-professional drivers in the first such criminal case in Europe. Uber was ordered to pay €800,000, but half the fine was suspended.
ITALY In April 2017, a Rome judge ruled in favour of Italy’s major taxi companies, saying Uber services amounted to unfair competition, effectively banning them from operating there.
EUROPEAN UNION In May 2017, the European Union’s Advocate General announced Uber was primarily a transport company, rather than an intermediary between passengers and drivers, and was obliged to hold the same licences and permits as taxi providers.
CHINA Uber was bought out by a competitor in September 2016 after sustaining big losses.
SOUTH AFRICA In 2016, traffic police in Cape Town impounded more than 300 Uber cars because drivers did not have metered taxi permits. Driver-partners hold either commercial car insurance or car insurance backed by Uber’s US$5 million contingent liability cover. If a driver is ever in an accident, they can contact us 24/7 for information.” The company claimed Lunuwilage had never brought his insurance issues to them. “We welcome the New Zealand Government’s commitment to making the P endorsement more accessible for Kiwis by reducing compliance costs and the time associated with obtaining accreditation. In the meantime, we continue providing our safe, fast and affordable screening process that delivers the safety outcomes the travelling public want and expect.”
Gallagher says the response is disingenuous in implying Lunuwilage’s losses would be covered. On behalf of Lunuwilage, he’d twice invited company representatives to meet with a view to settling the matter but they refused to deal with him, even though he was the driver’s appointed representative, saying the matter was “personal” to Lunuwilage and could therefore not be negotiated through a third party. “Uber has never had the courtesy to respond to any correspondence.”
He says the legal claims are precedentsetting because they will expose the way Uber operates. “This company operates unlawfully and actively encourages people to break the law. If you want to look at a case that highlights all the potential adverse outcomes that could result, Lunuwilage’s is it.
“These are the first civil actions against Uber in New Zealand. It lets the courts decide what the Government has been too lily-livered to decide: the illegality of this company’s actions.”
THE JESSE JAMES MODEL
Gallagher, who has been advocating for contractor drivers for nearly 10 years, says he’s never seen a company “so full of itself, that flagrantly, boastfully operates on the Jesse James model. Imagine if a foreign multinational fishing company decided that it wasn’t going to comply with our quotas or 12-mile limits or any of the other statutes
“If you want to look at a case that highlights all the potential adverse outcomes that could result, Lunuwilage’s is it.”
and it thought the fishing was really ripe in some of these sanctuaries like Goat Island and it could make millions by extracting fish out of there.
“It’s then cautioned by the regulator, but it says it’s no problem if it’s fined, because the maximum fine is $100,000 per boat but it’s making $1 million per boat. It’s a farce. Once you accommodate unlawful conduct, all the adverse consequences follow.”
For Uber in New Zealand, however, apart from some bad publicity, there haven’t been adverse consequences so far – from the Government, anyway. Indeed, it’s even changing the laws to accommodate it and other ride-sharing companies.
The problem for Gallagher and others fighting what they see as an illegal scourge is that the public who are benefiting from Uber’s cheap rides are largely happy to turn a blind eye when it comes to understanding how those fares are set and what laws are being broken. But he hopes it’s just a matter of time before people get the message that some things are more important than a few bucks saved.
Ben Wilson, the former Uber driver who established the Uber Drivers Association after “a bunch of clandestine meetings at servos in Auckland”, says Uber will be desperate not to end up in court. He believes “they don’t have a leg to stand on; they will be really screwed”.
Initially, he says, disaffected drivers who turned up at the meetings feared they couldn’t take on Uber because they believed there was a risk of the company cutting them off and de-activing the app. “My feeling was we had to smash that culture to pieces, and sneaking around and hiding in the dark was not the way to form a union. We had to be out and proud.”
Wilson stopped driving for Uber in January but continues to head the association. He says at least 15 drivers who’ve asked for help have been referred by the police, who were prosecuting them for not having P licences. The few thousand dollars the association has raised in membership fees are being put towards the cost of the court cases challenging Uber.
So far, the NZTA says, Uber drivers have been issued 189 infringement notices, 163 official warnings and 81 prohibition notices banning them from driving commercially.
MacDonald is frustrated that the NZTA continues to target drivers while the company escapes prosecution. He asked one investigator why the regulator was “sitting on its hands” and was told it had limited ability to bring a prosecution at that level “because of staffing and resourcing”. Last year, he was told “they hadn’t quite figured it out because the company was registered in the Netherlands”.
But NZTA’s Styles says the agency’s focus is on identifying and acting when drivers are non-compliant. “We have been escalating our actions, particularly focusing on repeat offenders, as well as looking at extending prosecution to third parties, which could include Uber.”
THE UBER EFFECT
Although Uber has been “credited” with disrupting the global taxi industry, Blue Bubble Taxis chief executive Bob Wilkinson says his firm’s ride numbers have declined only about 8% in the year to June. No figures are kept on how much revenue has dropped.
Effects are different in each of the three main centres, based on who is driving.
“In Auckland and Wellington, when they launched, the criteria were pretty strict – you had to be legal. So consequently, the majority of the drivers were taxi drivers for the smaller lower-tier companies that don’t have phone rooms and rely on pickup work. They signed up for Uber and were working alongside their existing jobs.”
But when Uber launched in Christchurch, he says, there were no lower-tier taxi companies, “so they threw the rules out of the window and said, in essence, ‘We’ll do your Ministry of Justice checks for you, just