It was announced on Friday that Melbourne taxi drivers are launching a class action suit against Uber – for $500 million in lost income. So what is a claim for lost income? Here we will discuss what a claim of this type means and how this is applicable to the ride
Basis of the claim
Although Uber came onto the Australian market as early as 2012, it was not officially legalised until 2015 in New South Wales and 2017 in Victoria. In Victoria, Uber commenced operations in 2014, leaving a space of 3 years where Uber held a significant portion of the car service market while not being technically legal. Taxi drivers in Melbourne subsequently believe they are entitled to recover the profits they lost during this time.
Legal grey areas
Before Uber was properly legalised, the platform was technically breaking the law by transporting passengers for profit without proper regulation. Car services were initially intended to be entirely regulated by the Government in the taxi industry, and this was done by all drivers having their plates registered, and having adequate safety and identification checks undertaken. When Uber launched, there was no way for the government to keep track of who these drivers were (they now have to register an ABN, along with car safety, licence and criminal record requirements). Subsequently, the Government liaised with Uber and the taxi industry to create a scheme where Uber could operate legally and be held accountable if anything went wrong, with taxi drivers getting a compensation package from the government. This package has done little to alleviate the stress that has been placed on the taxi industry, and it’s hard for them to even be in a position to compete if the government sets maximum and minimum prices.
Calculating lost income
Taxi drivers in Victoria estimate their lost income to be in the range of $500 million. This has been predicated on the fact that passengers were using Uber, and Uber was subsequently turning profits when it was not yet legalised. Further, Uber’s operation during this time severely affected the value of taxi license plates – once being worth more than $400,000 and now worth $100,000. In this sense, it can be easy to see that many taxi drivers are now in debt and are not generating a livable income.
Launching a class action
Calculating the income lost will depend on many variables – what evidence can be produced that shows that Uber directly took market share that was initially monopolised by the Taxi industry, and how many taxi drivers join the class action. There is strength in numbers, so the more taxi drivers that join the claim, the more likely it is that they will be successful. Class actions require more than 7 people, who are claiming for damages from the same defendant and in similar circumstances. It is expected that more than 1000 taxi drivers will join the action – so Uber will certainly have a significant case to answer to.
It is not often that industry workers take action against a competitor for lost income, however the circumstances of the taxi industry and government regulation in the ride-sharing sphere is such that it may end up being the largest class action suit launched in Australian history.
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