ACCC to investigate UberEats

The competition and consumer regulator has launched a probe into Uber’s allegedly unfair contracts with restaurant owners who have signed up to its Uber Eats delivery app.

"Certainly, we'll have a look at it," Australian Competition and Consumer Commission (ACCC) chairman Rod Sims told RN Breakfast.

"We have three bits of the law we can deal with here.

"One is business-to-business — are they misleading the people they're dealing with?

"Two is, are they engaged in unconscionable conduct, putting all the conduct together?

"And thirdly, are the terms with which they work unfair? So, there's a lot to look at there."

The investigation into “unconscionable conduct is quite clear. According to the ACCC website, it pertains to conduct which is "particularly harsh or oppressive" or which goes against "good conscience" judged against the norms of society.

In its probe, the ACCC will examine the relative bargaining strength of the parties and the use of undue influence or unfair tactics by the stronger party. In this particular case, it would be Uber.

The ACCC would also look at whether the terms imposed went beyond what is "reasonably necessary" to protect the stronger party's legitimate interests.

The investigation could have massive implications for Uber’s contracts with restaurants.

If the ACCC decides to take this matter to court, and a judge decides the contract is unfair, the offending terms becomes be void, or non-binding for the weaker party which in this case would be the restaurant owner.

The probe comes at a time when Uber is preparing for a potential initial public offering in 2019.

Uber lost $US4.5 billion ($A5.9 billion) last year. At the same time, it is facing fierce competition at home in the United States as well as a regulatory crackdown in Europe where governments have been leery of the company's impact on the traditional taxi industry.

Leon Gettler - 24th April 2018