# PART 2. UBEREATS - 'Judge, jury and executioner'



## Hugh G (Sep 22, 2016)

Part 2 of :
http://www.abc.net.au/news/2018-04-...-over-conditions-on-restaurant-owners/9662814

*'Judge, jury and executioner'*
"The problem with the relationship here is there's a real inequality in the bargaining positions between Uber and the small business operators," Mr Robertson said.

He said the clearest example was this clause: "by using the Uber Services &#8230; you are bound by any future amendments and additions to this Agreement".

  
*Photo:* A customer using the Uber Eats app on her mobile phone. (Uber) 

This term gives Uber the right to vary the contract - a power which the restaurant does not have.

Uber used its power under this clause to amend its refund policy in early February.

While Uber used to cover the cost of customer refunds, it now requires restaurant owners to pay a percentage of that refund in cases of "missing items", "incorrect items" and "incorrect orders".

Ms Auster defended Uber's policy change.

"We believe it is reasonable and fair for restaurants to contribute when they've forgotten to put an item in the bag," Ms Auster said.

"We also know that more than 70 per cent of our restaurants in a month have no missing or wrong food items."

Caitlin Craufurd, who owns the Petty Cash cafe in Sydney, severed her ties with Uber because she did not believe there was much transparency in how the company would make its blame-apportionment decision.

"They are judge, jury and executioner, and I think that's really unfair," Ms Craufurd said.

"I just decided you're taking 35 per cent, and now you're going to pass some of these costs onto me like a feudal overlord would - I'm not using you anymore."

*'It isn't for everyone'*
  
*Photo:* Chef Josh Arthurs has removed his restaurant from the Uber Eats platform. (ABC News: Grant Wignall) 

Josh Arthurs, the owner of Burgers by Josh, also made the same decision last week, partly for economic reasons.

"By the time they take that 35 per cent, which is what most restaurants work on as a gross profit, you're not making any gross profit anyway," Mr Arthurs told the ABC.

"Basically you're doing it for free with Uber Eats."

So why do small business restaurants sign the contract, knowing that Uber will take 35 per cent of their revenue?

Essentially, it's a fear of missing out, according to Chrissy Symeonakis, head of Creative Little Soul, a marketing agency with a specialty in the food industry.

"When delivery came along, they were given not really much of a choice," Ms Symeonakis said.

"Restaurant owners are thinking: This is a new technology, but we don't understand new tech.

"But we need to get on board with [it], because now this is what the customer wants."

And how can Uber justify its significant commissions, given the average restaurant profit margin is 2-4 per cent (according to the Restaurant & Catering Industry Association of Australia)?

"It isn't for everyone," Ms Auster said.

"And some restaurants do decide that they don't want to be in this online delivery game.

"But the market has spoken. The consumer has spoken. They love this product, and it continues to grow."

*Botched deliveries and ruined reputations*
Mr Arthurs said another reason why he cut ties with Uber was "one too many" botched deliveries.

He alleges Uber's delivery drivers, on several occasions, delivered meals to his customers more than an hour late - with hot food turning up cold, and cold drinks ending up warm - and sometimes with food or drink items missing.

The flow-on effect was that disgruntled customers began posting scathing reviews about the Uber Eats delivery service on his restaurant's Google page, which he felt unfairly affected his review score.

"Before &#8230; we had about 4.2 or 4.3 stars, but since using Uber Eats, it's dropped a lot," Mr Arthurs said.

" And the majority of the recent complaints are from unhappy Uber Eats customers who have ordered our product, which has been mishandled during transportation."

  
*Photo:* An unhappy customer leaves a negative review about Uber Eats, but gives Burgers by Josh a one-star review.

One reviewer named Maddy Linke posted a one-star review about Josh's restaurant stating: "We got cold popcorn chicken that tasted like rubber, cold chips which nobody bothered to eat and our drinks were HOT."

The burger shop owner posted a public reply to Ms Linke with an apology: "Very sorry for your experience. We are investigating what has happened, often uberEATS drivers will take on too many orders: and therefore unfortunately deliver food cold."

Mr Arthurs complained, but there was not much Uber could do to help him.

An Uber Eats account manager wrote to Mr Arthurs in late February:

"We give Eater's [sic] the ability to rate and leave comments related to the delivery of their order on the app."

"We hope they choose to leave this type of feedback here and not on Google.

"Unfortunately we cannot stop Eaters from leaving comments elsewhere, and nor can we tell them to remove these comments. I know this is frustrating."

An Uber spokesperson told the ABC on Friday: "Uber Eats relies on our restaurant partners to make our marketplace work.

"We know there is significant competition for restaurant partners and we will continue to work hard to deliver a great service to those restaurants which choose to use our app."

*ACCC and unfair driver contracts*
Uber, along with several other companies, came under the radar of the Australian Competition and Consumer Commission last year as part of its crackdown on unfair contract terms.

The consumer watchdog raised concerns about Uber's standard contract with its drivers - in particular, a term allowing Uber to terminate the agreement "without cause".

The company then amended that contract in light of the ACCC's concerns.

"Uber amended its standard Driver Agreement that allowed it to terminate the agreement 'without cause'," the ACCC noted.

"Its right to termination is now limited to certain circumstances including where acting reasonably in order to protect its legitimate interests."

*Unfair terms and restaurants*
Mr Robertson believes the terms in the Uber Eats contract place the company at risk of breaching the unfair contract provisions of the Australian Consumer Law (ACL), in particular, the term that gives it the power to vary the contract whenever it likes.

This is in addition to the terms stating Uber does not provide "delivery services", and clauses which require restaurateurs to take on more responsibility (for "Substandard Meals" and refunds) - despite their lack of control over Uber's drivers in reality.

He explained that the ACL protects small businesses (20 employees or fewer), who enter contracts that are worth $300,000 or less - or $1 million or less, if the contract term is for more than one year.

"Where there's a term that results in a real inequality between the parties, and doesn't reasonably protect the legitimate rights of a business, the ACL can step in to cure the problem in the contrac," Mr Robertson said.

"The parties can seek a [court] declaration to remove that term from the contract."

The effect of this would mean the offending terms cannot are unenforceable by the stronger party.

  
*Photo:* An Uber driver delivers a meal to the customer at her home.

Uber denies that the contractual terms for its food delivery app are unfair.

"The terms and conditions for restaurant partners are consistent with Australian law and vital to supporting the thriving marketplace for restaurants, delivery partners and eaters," Uber's spokesperson said.

"Restaurants aren't locked in, just like delivery partners and eaters. If a restaurant does not wish to use the app, they do not have to."

So what is his advice for businesses which fear they have entered into unfair contracts?

In this specific case, he recommends that restaurants could try "negotiating directly with Uber to vary the terms of the contract".

But given the "inequality of bargaining power" he mentioned, that is unlikely to succeed.

As alternatives, he recommended lodging a complaint to the ACCC or seeking independent legal advice (provided the restaurant has enough funds for that).

*If you are a restaurateur, customer or driver with further information, you can contact us anonymously.*


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## Ben Hall (Apr 15, 2016)

"But the market has spoken. The consumer has spoken. They love this product, and it continues to grow."


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## Jack Malarkey (Jan 11, 2016)

In both Parts 1 and 2, there are statements that drivers take on too many orders in some cases, resulting in food being delivered cold.

The maximum number of deliveries a driver can have at the one time is two. And then the two deliveries are from the same restaurant and the two destinations are near each other.


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## Icecool (Feb 8, 2016)

Jack Malarkey said:


> In both Parts 1 and 2, there are statements that drivers take on too many orders in some cases, resulting in food being delivered cold.
> 
> The maximum number of deliveries a driver can have at the one time is two. And then the two deliveries are from the same restaurant and the two destinations are near each other.


So you're saying the restaurant lied . I can understand the frustration of incorrect or missing item from an order . It's time and cost wasting as the driver will need to redeliver it but No cost to the customers. Yes Uber did the right thing only charge a % of the cost for a redelivery .


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## Jack Malarkey (Jan 11, 2016)

Icecool said:


> So you're saying the restaurant lied .


I don't think the restaurant lied but I do think they are mistaken.


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## Who is John Galt? (Sep 28, 2016)

Ben Hall said:


> "But the market has spoken. The consumer has spoken. They love this product, and it continues to grow."


That reminds me of a movement in Germany in the late 1930's.

.


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## KITT (Mar 28, 2017)

I often get two deliveries from the same restaurant. Often they are near each other or along the same route. There are a few times also where the deliveries are on opposite directions. Maybe shortage of drivers during busy or late hours? 

Then the second customer will have to wait for his order longer especially if he was the one who made the order first and the other one just came in as a second job. But its Uber who decides which one should be delivered first.


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## BuckleUp (Jan 18, 2018)

KITT said:


> Maybe shortage of drivers during busy or late hours?


Hopefully ... enough realize it's a losing proposition at under $10/hr and don't do it.


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## Thing (Oct 7, 2016)

The only fast food outlet I would agree these terms are suitable is McDonalds.... When I used to buy Macca's through the drive thru I would estimate over 50% of my orders were wrong or missing something.

I'm not in the delivery area otherwise I'd order the occasional meal then submit a complaint to recoup many lost $$$ from years past


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## Teri12 (Jul 20, 2016)

Hugh G said:


> Part 2 of :
> http://www.abc.net.au/news/2018-04-...-over-conditions-on-restaurant-owners/9662814
> 
> *'Judge, jury and executioner'*
> ...


Can you imagine what would happen if restaurants could blame us? No..,I'm glad it's this way.


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