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Good morning and welcome to the Daily Os. It's Wednesday, the twentieth of March.
I'm Sam, I'm emma.
And this week the taxi industry reached a landmark settlement with Uber.
Uber will hand rival Cabby.
Is one of the biggest compensation payouts in Australian history. The tax industry was decimated through the illegal proceedings of Uber, and today it can go down as a win. The ride sharing giant has agreed to pay two hundred and seventy two million dollars in compensation after a five year legal battle with taxi and higher car operators. Will unpack the case against Uber and the historic deal in today's deep dive. But first Sam, what's making headlines.
The Reserve Bank has left interest rates on hold at four point three five percent. This is the third RBA decision in a row where the cash rate has stayed the same, after interest rates rows for ten consecutive months over twenty twenty two and twenty twenty three. In a statement, the RBA said it's encouraged by easing inflation or rising prices. However, it added that other parts of the economy remain quote highly uncertain.
Australia's environment scorecard went down in twenty twenty three. According to the latest annual report by the Australian National University, Australia scored seven point five out of ten for twenty twenty three, down from eight point seven the year before. The score combines data on the state of the country's weather, water and vegetation. The report mentioned that one hundred and thirty species were added to the Threatened Species list in
twenty twenty three. It also noted that greenhouse gas emissions increased for the first time in five years last year, mostly due to the increase in air travel after COVID nineteen.
The Victorian government is being encouraged to introduce pill testing by the Royal Australian College of General Practitioners. It comes after last week the Coroner's Court of Victoria found the deaths of two men were a result of mixed high dose drugs that the men may not have known they were taking. The Coroner's Court also recommended that Victoria trial a pill testing service similar to the one in the Act.
The chair of the College of General practitioners said, let's do all we can to stop these pointless overdose deaths from happening again and again.
And today's good news.
Two well known locations in the Byron Bay area of New South Wales now have first nation's jewel names. Cape Byron will now also have the name Wolgan and Julian Rocks will also be called Nothing Gully. Walgan holds importance to the aroquoal and Bungjalung people as the area is used for gatherings and ceremonies. Nothing Gully is another significant site with the traditional name used by the Aroqual people
meaning the father of the world. The New South Wales government said the changes to the names were a nod to the cultural significance of these sites.
So Uber was judi face court this week and they were accused of operating unlawfully when it first launched in Australia. But those legal proceedings are now not going to go ahead. Can you take me through the settlement?
That's right.
So after five years of legal proceedings, more than eight thousand taxi and high car operators so that includes drivers, business owners, they will receive a share of two hundred and seventy two million dollars after reaching a historic settlement with Uber.
It's the first time ever that Uber.
Has reached this kind of a deal with any taxi industry anywhere, and it's it's one of the largest class action settlements in Australian history.
So if we go back to the beginning of those proceedings five years ago, what was the original accusation against Uber?
So, first of all, as I mentioned, this is a class action and that's a type of lawsuit where many people are represented by one entity. So in this case, that entity is a legal firm called Maurice Blackburn. This all started in twenty nineteen with one Cabby, a Victorian taxi driver and his name is Nikos Adrianachis, and he filed the proceeding against Uber in the Victorian Supreme Court
in twenty nineteen. Then Morris Blackburn got more than eight thousand sign ups from other taxi drivers, other people working in the taxi and higher car industry who wanted to be.
Part of this case.
So what was he arguing.
So the argument centered around that Uber launched its ride sharing service uber x illegally in twenty fourteen, and this was in four states, so Victoria, New South Wales, Queensland and WA and this Victorian taxi driver along with the eight thousand signups and Morris Blackburn claimed that Uber's aggressive and illegal launch in Australia caused direct financial losses for taxi and higher car workers.
So the class action was brought for.
These people to seek compensation from Uber for those damages incurred by its unlawful operations.
Okay, so it's twenty nineteen, a class action is launched. We've got thousands of taxi drivers and higher car drivers claiming that they've lost money because Uber is now in the country. I want to go a little deeper on this idea of Uber operating, in their words, unlawfully, because I think there is a difference between a new competitor entering the transport market and that player then acting anti competitively or behaving unfairly exactly.
So it's not illegal for competition in a market. And Uber is such a giant in twenty twenty four, it's sort of hard to think about this time when they were kind of the new guy, uncharted territory and especially exactly a startup, and when we think of how it's expanded, you know, into our day to day lives in twenty twenty four, Uberpool, Uber eats. But when Uber came to Australia,
ride sharing was virtually unheard of. So you know, you might have had to mate that went on a trip to the US and spoke about getting an Uber or a Lyft, but in Australia we had nothing like it. And then that is compared to a very tightly regulated taxi industry.
So talk me through those regulations then, like why do you say it's so tightly regulated.
So states and territories have their own regulations when it comes to taxis and high car companies and they're categorized as passenger transport services, but the regulations around them in these states and territories are pretty uniform in terms of special licenses that are needed, vehicle registration fees, standards for drivers, accreditations that drivers have to meet, that.
Thing, right, So a heavily regulated space. And then if we think back to more than a decade ago when Uber was really establishing itself in the Australian market, it didn't fall within those rules for passenger services and it was basically unregulated.
Right, Yeah, So as you can imagine that really disrupted the taxi industry, and I think a lot of listeners will remember this time because you had companies and drivers who were paying these huge fees for their licenses to operate taxis in some states, you know, hundreds of thousands of dollars a year for registrations.
And adhering to all these rules to operate.
But then when Uber rocks up, you know, anyone with a car and a standard driver's license could hypothetically become an Uber driver and start making money tomorrow. So the main argument from this class action was that this wasn't fair and that Uber needed to be regulated, and many in the taxi industry wanted it to be subject to the same regulations as taxis.
And higher cars.
And obviously now think have shifted in the ride share industry. There are now standards and regulations that regulate how ride sharing operates in Australia. But this class action centers on the time before that, and that's when Maurics Blackburn is arguing that its clients suffered that financial loss. So even though Uber is a massive part of our lives now, it is important to kind of place it in that context of it's still being a real disruptor, Yeah.
Exactly, which is why I wanted to use.
An example from twenty fifteen, and that was when there was this government review into competition policy. So basically a report that examined certain policies within industries to see if they were being regulated fairly. Ride sharing, as you mentioned, has completely transformed since then. But if we step back in time a little, it does give us an idea of the context that this class action came about in.
So it's twenty fifteen, We'll wearing skinny jeans. Mark Ronson and Bruno Mars Uptown Funk is playing in every taxi you get.
In I'm twenty one.
Paul Blatt Malkop two is in Cinemas Great Film. A government report says that the taxi industry is heavily regulated, and it gives examples of things like restricting taxi numbers in each state where you have to have a license to have a taxi, but each state has limits on how many licenses it will issue, so that caps the amount of cabs that can be in the market to
service customers. At that time, they said there's a scarcity of taxi licenses, as mentioned, some that cost four hundred thousand dollars a year, three hundred thousand dollars a year, rules that taxis have to operate three hundred and sixty five days a year, that they must accept all reasonable requests, and that they must have meters which set fares, and they automate tariffs at certain times and on public holidays.
How did Uber respond to that anger in the early days.
In those early days, they pretty much pushed back against all of these calls for regulations and said that they were outdated and that states and territories were sort of trying to force it using these old fashioned ideas about what passenger services could be. And I think, you know, that's kind of a rhetoric we've seen in the gig economy all over that you know, there's this old world meets the new world, and how do we adapt to that.
But this twenty fifteen review noted that taxis were being disrupted by tech changes, including you know, digital booking apps and of course ride sharing. At that time, the Taxi Council in Queensland said that taxis and ride sharing were substitutable and should therefore be subject to the same rules. But Uber argued, and I think this tells US a bit more about why it took maybe five years to.
Reach this decision.
In the class action, it argued that ride sharing does compete with taxis, but that it's not offering taxi services.
Well, what do you mean by that? Like, that's an interesting distinction.
Yep.
So ubers are not traditional caps, right, but specifically what differentiates them from taxis and higher cars? And this is according to Uber's direction d of Public Policy in twenty fifteen. The fundamental differences between taxis and ride sharing are things like ride sharing doesn't accept anonymous rides. You can't hail an Uber in the street. Ride sharing services don't accept any cash.
It's all digital, it's all in app.
Ride sharing doesn't have ranks, and ride sharing services are on demand, so the user is empowered to open their app and to book the service when they want, rather than trying to seek a taxi out on the street.
Okay, got it. And then we got to twenty nineteen.
Exactly, And that's when Morris Blackman filed this class action arguing that Uber and its vehicles and its drivers were able to operate illegally without the proper licenses and accreditations, undercutting the taxi industry leading to loss of income.
And so fast forward a couple of years, and I'm sure many, many, many legal bills and Uber and the taxis have come to the table and reached a deal. But this class action did take a while to get here. Do we have a sense of why it took so long for them to reach an agreement.
Yeah, we don't know the specific details. But this is a quote from Michael Donnelly, he's one of the lawyers at Morris Blackburn, who said Uber fought tooth and nail at every point along the way every day for five years. So while this settlement was reached, it certainly doesn't seem like it was easily done. And as you said, no doubt the legal fees on their own would have been astronomical. And that's before we even factor in this settlement.
And so we have a settlement figure. It's two hundred and seventy two million dollars. That sounds like a lot of cash.
Yep, two hundred and seventy one point eight million dollars to be precise.
And as we said earlier, this class action was due.
To be heard in court proceedings commencing Tuesday, but at the eleventh hour. For whatever reason, Uber decided they didn't want to go through with that process. So a deal was made literally the day before or as far as we can tell. And one that Donnelly from Morris Blackburn said, quote finally put real money back into the accounts of people who've been devastated by Uber.
And so hypothetically it should be that there's a pot of money two hundred and seventy two million that's split up between it the eight thousand people in the case. Is that how it's going to play out.
So it's not quite as cut and dry. First off, Morth Blackburn has this agreement with a group called Harbor Fund and they have paid a proportion of the legal costs of the case over the last five years in exchange for a funding commission. Now that's somewhere between twenty five to thirty percent of this settlement, so it's also.
Entitled to recover it's legal costs. And right off the.
Bat, we're looking at, you know, a minimum of sixty eight million dollars for that fund.
Before we even get to the taxi drivers exactly. And then of course the law firm will take a commission and they normally take a couple of percent of the final settlement and then finally the rest of the settlement will go to the drivers and taxi operators. So we're talking really then about tens of thousands of dollars each, not millions.
Yeah, but it is still the fifth largest class action settlement in Australian history. And you know, eight thousand people participating or eight thousand people signing up to a class action, that is a huge number of people. You know, we see class actions with tens or hundreds of people. This is pretty significant. So they could still end up with
tens of thousands of dollars each. And Morris Blackburn said it was proud its team held a major organization to account for inflicting what it called mass wrongs on people.
And have we heard from Uber since the settlement.
We did get a statement from Uber this week which said the platform is now regulated in every state and territory, which kind of speaks to that shift in ride sharing that we mentioned earlier, and it said that since twenty eighteen, it's made significant contributions into various state level taxi compensation schemes. With the proposed settlement quote, we put these legacy issues FIR in our past, So it seems like that's basically
all we're going to hear from Uber. They don't sound very interested in going back into trudging all of that up again.
Is that amount of money going to hurt them?
Well?
I looked into this because two hundred and seventy two million dollars sounds like a lot of money.
But Uber is a global.
Company, as we know, with revenue streams from major countries around the world, and not just from ride sharing anymore. They've diversified. Uber Eats is its own beast. Its global revenue for twenty twenty three was over fifteen billion Australian dollars, so nine point nine USD. So you've got to think two hundred and seventy two mel will hurt its Australian operations significantly.
But yeah, it's a multinational corporation.
So you know, while these proceedings have wrapped up, and I'm sure Uber's very relieved that it's over, whether or not it means a lot for their bottom line, we'll kind of have to wait and see.
The interesting thing that Uber will be watching now is if taxi drivers in other trees want to emulate a similar proceeding and a similar lawsuit, and then it can start really adding up fuber exactly.
And you've got to wonder if negotiating that out of court settlement has something to do with avoiding the public interest of court hearings having that information out there, hearing the defense hearing from the Cabby's.
So yeah, we'll see if any other countries are watching.
Very interesting, Emma, thank you five stars for you, and maybe I'll add the tip.
A bottle of water and some mince for you.
Sam. Thank you so much and thank you for joining us on the Daily os today. If you enjoyed that episode, let us know. If you're in Spotify, you can leave a review or a comment, and you can leave a rating if you're on Apple. We'll be back again in your ears tomorrow morning. Until then, have a great date. My name is Lily Maddon and I'm a proud Runda
Bungelung Calcoutin woman from Gadigol Country. The Daily oz acknowledges that this podcast is recorded on the lands of the Gadighl people and pays respect to all Aboriginal and tourist in Ireland and nations. We pay our respects to the first peoples of these countries, both past and present,