Uber Eats amends contracts with restaurants following ACCC probe

Read the competition watchdog's full statement here.

The Australian Competition & Consumer Commission (ACCC) has issued a media release on Uber Eats' agreement to amend its contracts with restaurant-partners:

"Uber Eats has committed to changing its contracts with restaurants following an investigation by the ACCC.

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.

“We will continue to monitor Uber Eats’ conduct to ensure restaurants are not unfairly held responsible for matters outside of their control and Uber Eats does not hold anyone else responsible for parts of the service it controls,” Mr Sims said.

“Ensuring small businesses aren’t subject to unfair contract terms by larger businesses is one of our top priorities.”

“Business are warned that if they include unfair contract terms in their contracts, they will risk close scrutiny from the ACCC,” Mr Sims said.

Under the Australian Consumer Law as it presently stands, a large business including or relying upon an unfair contract term against a smaller business is not illegal and penalties cannot be imposed for such conduct. However, a Court can declare such terms to be void and not enforceable.

“We have called for legislative changes so the ACCC can seek penalties and compensation for small businesses where large businesses impose unfair terms.” Mr Sims said.

“We welcome the Government’s commitment in March this year to consult on options to strengthen unfair contract term protections for small business.”

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.

Uber Eats will begin rolling out changes to its contracts shortly and says all will be completed by December 2019. Uber Eats has committed not to enforce the terms that the ACCC considers to be unfair while these changes are completed."

In response to the ACCC's statement, Uber Eats ANZ regional general manager Jodie Auster said they are "pleased to have been able to engage constructively with the ACCC to resolve this matter."

In a separate statement, she laid out some key changes they intend to make to their contracts, which include:

• providing more detailed information about our technology services, as well as greater clarity on how we handle complaints and process payments for example
• providing additional information about the limited circumstances when restaurants need to cover the cost of refunds, such as when there is an incorrect item or items are missing, reflecting the way we operate in practice; and
• setting out a more consistent and clear approach for varying and terminating agreements.

"We’re also more clearly setting out the range of services we offer to partners. This includes those the ACCC has described as ‘logistics services’ being our role in determining the pool of drivers available to restaurants, processing their payments, and providing facilities such as the consumer’s address, map services and GPS tracking to assist the driver in delivering meals," she added.

Auster says Uber Eats will communicate the changes from August and provide time for partners to review and discuss their concerns with the delivery company.