Uber! Depending on who you ask Uber is either the best thing to happen since sliced bread or it is a disaster waiting to happen. In this article we look at the issues surrounding the rise of Uber and where you, the user, stand if something goes wrong.
Is Uber the same as a taxi?
The short answer to this question is no. While using a rideshare or a taxi both involve paying someone to drive you to your destination there are a number of significant differences between using an Australian registered taxi service and booking a rideshare ride on your smartphone.
Uber arrived in Australia in 2012 and until recently the rise of ride-sharing has occurred largely outside the constraints of existing transport laws. Rideshare drivers do not buy expensive taxi licences or plates because they are not taxi drivers. Until now this has given Uber a significant commercial advantage over established taxi companies because without these and other traditional infrastructure costs they have generally been able to offer a less expensive service.
If Uber isn’t a taxi service, what is it?
Uber provides an on-demand car and driver service. Once a request is made using the app, specially designed dispatch software is used to send the nearest available driver to your location.
So far so good – sounds like a taxi service doesn’t it?
However, when you book a ride through a ridesharing app, you are not getting or paying for a licensed taxi service with a licensed taxi driver. Drivers do not work for for their platform, but are simply individuals that pay the parent company a percentage of their revenue in order to get listed with them. In rideshare speak this is what is known as peer to peer transport.
Is Uber safe?
Uber has publicly stated that it runs background checks on its drivers. However, they have been criticised for not being sufficiently thorough with these checks. Uber has also stated that it requires cars to pass a safety inspection at a designated mechanic however, but whether they conduct ongoing safety checks of either drivers or cars has until now been entirely at their own discretion.
Is Uber operating legally in Australia?
In New South Wales and Victoria no formal licensing system has yet been put in place despite each of the governments in these states raising serious concerns about the service and the provision of paid transport for members of the public without proper licensing. In Queensland, drivers must hold a Booked Hire Service License.
The situation is now different in the ACT where Uber recently reached an agreement with the ACT government and commenced the UberX ride-sharing service as Stage 1 of a planned legal integration of ride-sharing services within the existing ACT taxi industry.
Stage 2 of the agreement will involve the introduction of specific legislation that is likely to be introduced in early 2016. This legislation will require UberX drivers to pass criminal record and driver history checks and also require that their vehicles are registered, insured and roadworthy. Regular health checks and additional licensing fees will also apply once this legislation is passed bringing Uber drivers more in line with the community standards expected of licensed taxi drivers.
Whether or not any other States will go down a similar route to the ACT in legalising ride-sharing remains to be seen.
Do Uber drivers have insurance?
Compulsory Third Party (personal injury) insurance is mandatory for every motor vehicle registered in Australia. However, there is presently no guarantee that the Uber driver you get will have comprehensive insurance on their vehicle. As drivers are not employees, they are unlikely to have the benefit of workers compensation insurance.
Beware the fine print
Most rideshare users would not be aware of the extent of the limitations on liability that Uber has in its User Terms and Conditions.
Uber’s Terms and Conditions contain very broad disclaimers including a statement that Uber shall not be liable for any damages including lost profits or data or personal injury or property damage related to or in connection with the use of any of its services. This condition is said to apply even if Uber has been advised of the possibility of such damages. This could mean that even if Uber has been advised that a particular driver is unsafe or has a criminal history if you suffer loss of damage as a result of using that driver Uber will claim that it has no liability to you.
The limitations in the Uber Terms and Conditions extend to the user acknowledging that the driver or ride-sharing service may not be professionally licensed or even legally permitted. In other words Uber’s terms put the onus on you as the user to acknowledge that the service they are providing may be illegal.
Uber’s Terms and Conditions also limit any financial liability the company has to 500 Euros and require you to indemnify Uber for any and all clams and demands including legal fees that arise out of your use of its services.
It is also important to note that under the current Uber terms and conditions the governing law is said to the laws of the Netherlands and not the relevant Australian state or territory in which Uber is operating.
These terms and conditions are in direct contrast to the protections afforded to passengers who travel in Australian licensed taxis and hire car services and who are able to bring a claim under relevant Australian laws in the event that they are injured while a passenger or suffer some other loss or damage as a result of using a taxi or licensed hire car service.
So ridesharing may be cheaper than a taxi but the immediate saving may come at a price at least until all states and territories follow the ACT’s lead and enact appropriate legislation to address the rise of ride-sharing or peer to peer transport services.