ACCC forces Uber Eats to
change its liability exclusion clauses
For more than 150 years, Courts have upheld the right of
a carrier to exclude liability for loss and damage to goods
provided that the exclusion clause is ‘just and reasonable’.
As Justice Blackburn said in Peek v The North
Staffordshire Railway Company [1863] EngR 1016:
a condition exempting the carriers wholly from
liability for the neglect or default of their servants
is prima facie unreasonable [unless the carrier] holds
forth as an inducement a reduction of the price below
that which would be reasonable remuneration for carrying
at owner's risk
These days, the test is that the exclusion clause must
not be ‘unfair’ – see section 23 of the Australian
Consumer Law which provides that a term is void if it is
unfair.
Since November 2016, the Australian Competition and
Consumer Commission (ACCC) has enforced section 23 to
protect small businesses against unfair contract terms
contained in standard form business-to-business contracts. A
‘small business’ employs less than 20 people.
In its Report on Unfair Contract Terms in Small Business
(November 2016) the ACCC stated:
The ACCC identified numerous indemnity clauses that
raised potential concerns, the most common being terms
that … limited the liability of the larger business … in
relation to any loss or damage arising as a result of
the business relationship (page 14)
ACCC forces Uber Eats to
change two unfair clauses for restaurant food deliveries
The ACCC media release (17 July 2019) explains:
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.
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.
“Following our investigation, Uber Eats has committed
to changing its contract terms that we believe are
unfair, because they make restaurants responsible and
financially liable for elements outside of their
control,” ACCC Chair Rod Sims said.
“We consider these terms to be unfair because they
appear to cause a significant imbalance between
restaurants and Uber Eats; the terms were not reasonably
necessary to protect Uber Eats and could cause detriment
to restaurants.”
Uber Eats has agreed to amend these terms, to clarify
that restaurants will only be responsible for matters
within their control such as incorrect food items or
incorrect and missing orders.
Under the amended contracts, restaurants will also be
able to dispute responsibility for any refunds to
customers and Uber Eats will reasonably consider these
disputes.
In addition to these contract terms, the ACCC was
also investigating whether a contract clause which
referred to Uber Eats not providing logistics services
was misleading. 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. Uber Eats also agreed to remedy this clause.
“We welcome Uber Eats agreeing to remove the
statement in its contracts saying it does not provide
logistics services, because clearly, in our view they
do,” Mr Sims said.
Analysis: The unfair Uber
Eats terms and conditions
Uber Eats (Uber B.V. a Netherlands company) provides its
services to restaurants under its standard Uber B.V. Terms
and Conditions, which apply world-wide (except in the USA or
Mainland China).
Uber Eats describes itself as a ‘technology platform’
which enables Uber Eats app users ‘to schedule
transportation and/or logistics services’ with ‘independent
providers’. This description echoes Facebook’s former
description of itself as a neutral platform not responsible
for what people post and share on their services.
The Uber Eats Terms and Conditions operate in two ways to
exclude liability:
- By requiring the restaurant to acknowledge that:
UBER DOES NOT PROVIDE TRANSPORTATION OR LOGISTICS
SERVICES OR FUNCTION AS A TRANSPORTATION CARRIER AND
THAT ALL SUCH TRANSPORTATION OR LOGISTICS SERVICES ARE
PROVIDED BY INDEPENDENT THIRD PARTY CONTRACTORS WHO ARE
NOT EMPLOYED BY UBER OR ANY OF ITS AFFILIATES
- And by requiring the restaurant to agree that:
THE ENTIRE RISK ARISING OUT OF YOUR USE OF THE SERVICES,
AND ANY SERVICE OR GOOD REQUESTED IN CONNECTION
THEREWITH, REMAINS SOLELY WITH YOU, TO THE MAXIMUM
EXTENT PERMITTED UNDER APPLICABLE LAW
.
Note: The words are capitalised in the original
What the ACCC has achieved is to shift some of the
responsibility to provide refunds to dissatisfied customers
from the restaurant onto Uber Eats, by having Uber Eats
change these terms so as to acknowledge:
- that it provides transport and logistic services;
and
- that it accepts responsibility if the food it
delivers is spoilt or lost whilst in its control.
As a result, if Uber Eats drivers deliver hot food to
customers cold or vice versa, or fails to deliver at all, it
is Uber Eats and not the restaurant which is liable to
refund the cost of the food, if the food is within the
control of Uber Eats at the time it was spoilt or lost.
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