Uber Eats bullied restaurants into taking responsibility for botched deliveries that weren’t their fault, and is now pledging to change its contracts

Picture: Uber
  • Uber Eats has been wrist-slapped by the Australian Competition and Consumer Commission for “unfair contract terms” that made restaurants on its platform responsible for deliveries they didn’t control.
  • An investigation by the ACCC found Uber Eats has been engaging in the bullying tactics since at least 2016.
  • The ridesharing food delivery app has agreed to change its contracts and will give restaurants the right to dispute responsibility for customer refunds.

If you’ve ever been the victim of a botched Uber Eats delivery and been refunded by the restaurant, turns out it might not have even been their fault.

An investigation by the competition watchdog has found that since 2016 Uber Eats has been insisting on “unfair contract terms” with its participating restaurants, essentially trying to shift blame onto them for delivery problems they had no control over.

“From at least 2016, Uber Eats’ 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,” said a statement on the ACCC website.

“Uber Eats’ contract terms give 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.”

Though he didn’t use the word, ACCC boss Rod Sims effectively accused Uber Eats of bullying, explaining that this was a case of a “larger business” imposing unfair terms on “small businesses” and that the contracts reflect a “significant imbalance” between the platform and its restaurants.

Uber Eats has agreed to change its contract terms by December 2019 and said it has “engaged constructively” with the ACCC on the unfair contracts issue in an online statement by Jodie Auster, regional general manager Uber Eats ANZ.

“We place a lot of value on establishing long-term relationships with our restaurant partners and it’s important that we provide a great partner experience – which includes giving them clear information about what to expect from us in a range of circumstances,” Auster said.

The platform also agreed to remove a clause in its contracts which claimed Uber Eats was not a “logistics provider”, which the regulator reckons is bogus.

“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,” the statement said.

Uber Eats was not fined and the ACCC is seeking legal changes to allow it to hand out penalties to big businesses for bullying small businesses, which the government says it will conduct a public consultation on.

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