Roadblocks in London but Uber’s route looks clear in Australia

The recent decision by Transport for London (TfL) not to renew Uber’s licence to operate in London, citing public safety and security concerns, took many by surprise. In reality, however, it’s by no means the first time Uber has run into difficulties with regulators around the world.

Earlier this year, Uber pulled out of the Danish market, where it had amassed 2,000 drivers and more than 300,000 customers. This withdrawal followed a long-running battle with Danish regulators. In May 2017, a Rome court blocked the use of the Uber app, citing unfair competition grounds. Interestingly, this followed a six-day national strike by Italy’s powerful taxi associations. While an appeal court lifted the ban, this only related to the platform’s premium Uber Black service which means that its Uber X service remains effectively outlawed throughout Italy. In Hungary, Uber suspended its operations in Budapest in 2016 after restrictive legislation was passed by the government. And it’s not just a European trend.

In Canada, Uber is considering pulling out of the Quebec market if legislation is passed requiring Uber drivers to undergo police criminal records checks and to do the 35 hours of training expected of regular taxi drivers. While in Brazil – Uber’s second largest market outside the USA – the legislature is, this month, debating a bill which would require ridesharing companies to acquire special permits, which may cause Uber to completely rethink its strategy in Brazil.

So, what does all this mean for the future of ride-sharing, and Uber, in Australia? It’s a timely question, particularly given that new ride-sharing laws commenced in NSW earlier this month. Let’s look at the UK case and consider any parallels.

Why didn’t TfL renew Uber’s licence?

TfL concluded Uber was not ‘fit and proper’ to hold a private hire operator licence and decided not to renew its licence to operate in London after 30 September 2017. TfL stated Uber's conduct had demonstrated a ‘lack of corporate responsibility’, identifying four issues it claimed had potential public safety and security implications, including Uber’s:

(a) approach to reporting serious criminal offences;

(b) approach to obtaining medical certificates;

(c) approach to obtaining criminal record checks for drivers; and

(d) reluctance to give regulatory bodies access to ‘Greyball’ – which is an aspect of Uber’s ride-hailing software.

TfL’s decision was a regulatory slap-down for the 40,000 licensed Ubers drivers in London and the more than 3.5 million Londoners who regularly use the service.

Unsurprisingly, the legal and public relations response to the decision has been swift. In mid-October, Uber lodged an appeal against TfL’s decision with Westminster Magistrates’ Court. The first hearing is likely to take place on 11 December and Uber drivers will remain on the roads in London until the appeal process has been exhausted. A petition has also been launched by Londoners calling for Uber’s licence to be reinstated, which has attracted over 850,000 signatures at the time of writing.

Australian implications

Prompted by TfL’s decision, the Transport Workers Union in Australia has written to the state and federal transport ministers requesting an audit of Uber, to ensure it is operating to ‘community standards about safety and fairness’.[1] With the recent commencement of new ridesharing regulations in a number of Australian jurisdictions, governments will be keeping a close eye on Uber’s performance.

How is ridesharing regulated in Australia?

Ridesharing apps such as Uber are regulated by the state and territory governments, and have been legalised in all states and territories apart from the Northern Territory.[2] In most jurisdictions, the process of legalising ridesharing has taken place in two steps:

• stage one saw the introduction of interim measures to legalise ridesharing under the existing transport legislation, in response to overwhelming popular support; and

• stage two has seen the introduction of new legislation to comprehensively regulate both ridesharing booking providers (such as Uber) and drivers.

As the stage two reforms come into effect, ridesharing booking providers and drivers should be wary of the expanded duties of care they owe passengers.

New legislative framework in NSW

In NSW, the Point to Point Transport (Taxis and Hire Vehicles) Act 2016 and the Point to Point Transport (Taxis and Hire Vehicles) Regulation 2017 (NSW Legislation) came into effect on 1 November this year.

The NSW Legislation outlines a comprehensive legislative framework for the ridesharing industry, and imposes a range of duties on booking providers and drivers, which sets high standards for driver and vehicle safety.

Under the NSW Legislation, booking service providers have a duty to ensure the health and safety of drivers and passengers, so far as reasonably practicable – these include eliminating risks to safety.[3] The NSW Government has stated that a booking provider’s duty of care includes:

• ensuring that any safety equipment in the vehicle is working and the driver knows how to use it; and

• if a booking service provider is aware some of its drivers have other jobs resulting in long shifts, then it has a duty of care to have systems in place that manage that risk. These include the introduction of fatigue policies and procedures that drivers should follow or systems that monitor how long drivers are on the road.

Booking providers are also responsible for:

• ensuring that vehicles used by drivers meet the applicable safety standards;

• determining that drivers have adequate CTP insurance; and

• identifying and keeping a record of reasonably foreseeable hazards that could give rise to risks to health and safety to drivers and passengers, as well as the control measures taken to eliminate or minimise those risks.

Significantly, directors and officers of booking service providers such as Uber must exercise ‘due diligence’ to ensure that the provider complies with its duty of safety.[4] This has a range of implications for officers and directors of ridesharing providers, to ensure they have up-to-date knowledge of safety matters, they are aware of the hazards and risks associated with the industry, and the provider has appropriate resources to eliminate or minimise risks to health and safety.

There are serious consequences for failing to comply with these safety duties: up to $3,000,000 for a body corporate, and $300,000 and/or 2 years imprisonment for an individual. The NSW Legislation will also see the introduction of a ‘Point to Point Transport Commissioner’ to regulate the ridesharing industry, with broad powers to conduct audits, issue improvement notices, and even cancel, vary or suspend a booking provider’s authorisation to operate. This can occur if the Commissioner is of the view that the provider has failed to comply with the NSW Legislation (including a breach of its duty of care), or if the Commissioner is of the opinion that the service has been conducted in a manner that causes danger to the public, or for any other reason that Commissioner thinks fit.

Could Uber’s London ban occur in Australia?

Given the very close affinity which so many Australians have for London, the TfL decision has no doubt caused some concern for the hundreds of thousands of Australians who happily use ride-sharing services on a daily basis. All ride-sharing providers will be looking closely at the implications of the NSW Legislation. Is there a prospect that Australian regulators could take similar drastic action?

In short, we think it’s unlikely that a similar ban will occur in Australia. In NSW, the Commissioner has made clear that her focus is on working with industry to ensure they have the knowledge and capability to implement safety standards, and ensuring compliance through education, advisory, audit and enforcement activities. With the introduction of modern risk-based safety frameworks to meet emerging technologies, it would seem that Uber is here to stay.