Uber paid one of its drivers a “life changing” settlement to avoid a landmark court ruling that could have forced an overhaul of the tech giant’s business model, according to the Transport Workers’ Union.
At a public hearing as part of the Labor-led Senate Inquiry into Job Security, the settlement amount in a legal battle between ride sharing giant Uber and one if its food delivery drivers, Amita Gupta was revealed for the first time.
Under parliamentary privilege, the Transport Workers’ Union (TWU) said Uber had paid Ms Gupta $400,000 so she would drop a legal challenge that may have forced an overhaul of the company’s business model in Australia.
Ms Gupta lost her unfair dismissal case at the Fair Work Commission last year but appealed the decision to the Federal Court with support from the TWU, but settled with Uber before a decision could be handed down.
TWU national secretary Michael Kaine told the inquiry the “life changing” settlement amount is more than 26 times what Ms Gupta was likely to receive under unfair dismissal laws and came shortly after three Federal Court Judges made critical comments about Uber’s arguments during the trial in November.
Federal Court Justices involved in the case questioned parts of Uber’s defence late last year, including its claim not to be involved in transport work and that its delivery drivers were not employees.
Within weeks of the comments Uber settled out of court directly with Ms Gupta for a confidential amount, which had not been revealed until last week’s inquiry.
“The Federal Court of Australia, in very pointed questioning to the Uber counsel, made it very clear that [Uber’s claim] was a fiction that really was going to be unable to sustain through even the mildest scrutiny,” Mr Kaine told the inquiry last week.
He said the most telling part of the out of court settlement was its size, which he revealed was $400,000.
“I think it’s very clear that UberEats wanted to ensure that there were no risks that its exploitative system would be overturned by the full court and they were willing to pay an incredible amount of money, a life-changing amount of money, to the Guptas to make sure that moment in time did not occur,” Mr Kaine said.
A spokesperson for UberEats declined to comment on the settlement, except to say the “matter was resolved by mutual agreement”.
“Both of the Fair Work Commission’s previous rulings in this case confirmed that delivery-partners using the Uber Eats platform are independent contractors, with the Full Bench of the Fair Work Commission finding that the characteristics of the Uber Eats business point ‘decisively away’ from a finding of employment,” the UberEats spokesperson told InnovationAus.
“These were also consistent with previous rulings from the Fair Work Commission and Fair Work Ombudsman that drivers using the Uber app are independent contractors.”
Do you know more? Contact James Riley via Email.