As most Australian smartphone users are aware Silicon Valley
success story Uber is now offering its application and services in
capital cities, in competition with the traditional taxi
Despite a few missteps like implementing 'surge pricing'
during the Lindt Café siege, Uber's passengers seem
impressed with its slick offering and public relations offensive,
and its market share is growing. Taxi operators and the section of
the economy they support are less enamoured.
Taxis have for a century or more played an important role in
passenger transport in Australia, offering a 24 hour door to door
service that complements other private and public systems. They are
of particular importance for trips during irregular hours, to
remote places or by the least mobile members of the community.
As such, they have been heavily regulated on a state by state
basis, with operators required to obtain licences and comply with
statutory standards to ensure accessibility and safety.
Significant capital has been deployed across the industry, and
licensing has long been a source of state government revenue.
Uber does not comply with taxi regulation. It claims to be
operating through loopholes, but also driving the 'sharing'
economy while providing employment and a better passenger
experience. An alternative view is that it is in repeated and
deliberate breach of the laws of each state and territory, and is
at best providing substitute employment for some displaced taxi
State governments seem to be slowly moving to this latter
characterisation, with most states issuing penalty notices and
Victoria and New South Wales implementing formal legal proceedings
Uber has responded by blocking booking access to phones and
credit cards used in enforcement attempts, offering to pay fines
levied on drivers and aggressively defending court proceedings on
Governments are stuck between a rock and a hard place. Voters
like Uber, and the 'start-up economy' as a whole needs and
deserves promotion. On the flip side, Uber's growth undermines
the policy objectives of taxi industry regulation.
A serious government move against Uber is some way away,
particularly given the fickle political climate in most states.
However, allowing Uber's proliferation poses a challenge to the
rule of law, or at the very least capital's reliance on it.
Unfortunately, Uber will not become easier to deal with as it
grows, or be an isolated threat. Other disruptive 'new
economy' businesses will push legal boundaries and challenge
governments and incumbents in similar ways.
Happily, the Westminster system and Australia's
constitutional separation of powers provide avenues for private
action where governments are unwilling or unable to enforce the law
In the Uber scenario, the special harm suffered by the taxi
industry provide grounds for incumbents to obtain an injunction
restraining Uber's unlawful conduct. Australian Courts have
previously granted such remedies where 'an offence is repeated
in disregard of an inadequate penalty'.
Any contravention of an injunction would put Uber and its
drivers in contempt of court, facing an undoubtedly unimpressed
judge or bench with a broad penalty discretion.
If a plaintiff wanted to go further and seek some Silicon Valley
funding for itself through a damages claim, the underdeveloped tort
based on intentional interference with business through unlawful
means might be enlivened. The plaintiff would need to show that the
harm it suffered was a foreseeable consequence of Uber's
unlawful action. There is supportive and well grounded precedent on
Further, passengers who have been misled by Uber's public
relations claims and also paid its 'surge pricing' might
access Australia's ever-growing class action system to recover
Surge pricing seems a trivial issue now. That could well change
if the upstart is allowed to take advantage of sleeping governments
for long enough to displace the incumbents and the regulations they
have laboured under.
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