# 'ACCC cracks down on Uber's unfair small business contracts'



## Jack Malarkey (Jan 11, 2016)

http://www.smh.com.au/small-busines...small-business-contracts-20170724-gxhacr.html

Extract:

Unfair contract terms between businesses are in the regulator's sights according to the Australian Competition and Consumer Commission's small business report released on Monday.

The report reveals prior to and since the new business to business unfair contract terms law came into effect in November 2016 the ACCC has "engaged" with a number of businesses that have now amended their standard form contracts to address the regulator's concerns.

*Five businesses singled out*
The ACCC named five businesses that have changed their small business contracts:


Uber changed its standard driver agreement that previously allowed the tech giant to terminate the agreement "without cause". The right to termination is now limited to certain circumstances including acting reasonably in order to protect its legitimate interest.
Jack Malarkey's comment:

Here's a link to the ACCC report: https://www.accc.gov.au/system/files/1233_Small business in focus #14_D11.pdf. (4 pages). See, in particular, page 3 under the heading 'B2B unfair contract terms'.

The report refers to legislation concerning business-to-business unfair contract terms that took effect in November 2016.

This may well be relevant to the issue of Uber charging its service fee on the GST component of the fare. (BabyBoomer, I strongly suspect this will interest you.)


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## UberDriverAU (Nov 4, 2015)

There you go BabyBoomer, make a complaint to the ACCC and let's see if they say it's an unfair contract term to charge a commission on the full amount paid by the rider. I strongly suspect that they will not see it as being an unfair term.


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## Jack Malarkey (Jan 11, 2016)

I think they might well find it's unfair, UberDriverAU, but let's see. I do think that this is potentially an effective way of handling this matter and having the position changed or, at worst, clarified.


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## UberDriverAU (Nov 4, 2015)

Jack Malarkey said:


> I think they might well find it's unfair, UberDriverAU, but let's see.


I will disagree for the following reasons. The ACCC has obviously been reviewing contracts, and if they considered this to be an unfair contract term then Uber and every single provider of merchant facilities who charges a commission on the same basis (ie. a percentage of what the customer pays) would also be in the ACCC's crosshairs for including such a term.


Jack Malarkey said:


> I do think that this is potentially an effective way of handling this matter and having the position changed or, at worst, clarified.


Agreed.


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## Jack Malarkey (Jan 11, 2016)

Thanks, UberDriverAU. Interesting.


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## BabyBoomer (Feb 28, 2017)

Good points ...I agree that it might be a good way to get an answer.

Also happy to concede that the legislation may not be simple and clear-cut.

I still maintain that the premise of charging a commission on GST, or calculated using the total value including GST (if that is actually different) -is unfair and illogical. 

Imagine if a mining company told the relevant state government that will commence taking a 25% commission for collecting royalties. 

I know the laws are completely different, but the financial effect is the same. 

I also imagine a different situation / industry where a commission is 40, 50 or 60% using the same arrangements. The effect would start to become absurd (not an extra 2.5% that currently flies under the radar). 

It may be how it has been done for years and condoned by the ATO (because it doesn't affect their income), but it doesn't pass the pub test or the sniff test.

Interesting to see what the ACCC make of it. Thanks to you both for the posts.

Cheers,

BB


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## Sandhills (Feb 9, 2018)

I think Jack and BB are right...charging commission on a tax won't go down well..

They only thing to do is just lodge a complaint with the ACCC...

These test cases are what causes change


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## Jack Malarkey (Jan 11, 2016)

Sandhills said:


> I think Jack and BB are right...charging commission on a tax won't go down well..
> 
> They only thing to do is just lodge a complaint with the ACCC...
> 
> These test cases are what causes change


It's now less of an issue given that we can now claim a GST credit on the service fee.


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## Icecool (Feb 8, 2016)

Jack Malarkey said:


> It's now less of an issue given that we can now claim a GST credit on the service fee.


Uber's commsion was supposed to be 20 or 25% but if uber charge commission on the fare amount that includes the GST then the real commission uber is charging is 22 and 27.5 % dispite the GST credit claim on the Uber commission .


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## UberDriverAU (Nov 4, 2015)

Icecool said:


> Uber's commsion was supposed to be 20 or 25% but if uber charge commission on the fare amount that includes the GST then the real commission uber is charging is 22 and 27.5 % dispite the GST credit claim on the Uber commission .


20% of what the rider pays = 22% of the driver's revenue. Specifying it in terms of what the customer pays is the only way of keeping GST registrations irrelevant.


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## Grumpy Old Man (Jul 7, 2018)

How can the government ban "unfair" contracts?
If both parties agree and sign a contract, then as long as there is nothing illegal going on what is the problem?


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## Jack Malarkey (Jan 11, 2016)

Grumpy Old Man said:


> How can the government ban "unfair" contracts?
> If both parties agree and sign a contract, then as long as there is nothing illegal going on what is the problem?


This speech by Justice Steven Rares of the Federal Court explores that kind of question:

https://www.fedcourt.gov.au/digital-law-library/judges-speeches/justice-rares/rares-j-20130702.


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## UberDriverAU (Nov 4, 2015)

Grumpy Old Man said:


> How can the government ban "unfair" contracts?
> If both parties agree and sign a contract, then as long as there is nothing illegal going on what is the problem?


When contracts are negotiated between two parties of equal standing, then generally these kinds of protections aren't necessary. Standard form take it or leave it contracts can certainly contain terms that are unfair and commercially unnecessary, however.


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## IR12 (Nov 11, 2017)

Jack Malarkey said:


> http://www.smh.com.au/small-busines...small-business-contracts-20170724-gxhacr.html
> 
> Extract:
> 
> ...


Aussies rock! One of the few Countries making Uber squirm. 
Of course, some officials have been victims of Uber overreaching with the tracking devices ECT. ?


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## UberDriverAU (Nov 4, 2015)

Jack Malarkey said:


> This speech by Justice Steven Rares of the Federal Court explores that kind of question:
> 
> https://www.fedcourt.gov.au/digital-law-library/judges-speeches/justice-rares/rares-j-20130702.


Thanks for sharing that Jack. I quite enjoyed it.


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## Grumpy Old Man (Jul 7, 2018)

Jack Malarkey said:


> This speech by Justice Steven Rares of the Federal Court explores that kind of question:
> 
> https://www.fedcourt.gov.au/digital-law-library/judges-speeches/justice-rares/rares-j-20130702.


That is more to do with consumer laws. I don't see how the government can control business to business contracts.


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## UberDriverAU (Nov 4, 2015)

Grumpy Old Man said:


> That is more to do with consumer laws. I don't see how the government can control business to business contracts.


Contracts between "small business" and "big business" often run into the same issues. Can you honestly say you believe any small business has negotiated any contractual terms with Uber?


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