Fair Work Ombudsman investigates Uber over potential breach of labour laws

In a recent article by Sydney Morning Herald, the Fair Work Ombudsman has launched an investigation into Uber and whether its contracts with tens of thousands of Australian drivers are in breach of federal workplace laws.

The employment watchdog undertook to probe the US-based company’s contractual relationship with its large workforce of “driver-partners” earlier this month, after a request by a group of disgruntled drivers who argue they have been “misclassified” by Uber as self-employed.

The Ombudsman is now preparing to interview drivers who use Uber’s wildly popular, low-cost UberX platform, which has upended the taxi industry’s established business model in Melbourne and around the world.

A spokesman for the Fair Work Ombudsman said it had “commenced an investigation into Uber, with the purpose of determining whether the engagement of Uber drivers is compliant with Commonwealth workplace laws”.

Uber drivers have argued their work agreement with the company is not like that of a self-employed contractor, because Uber controls every aspect of the job other than the number of hours a driver chooses to work.

Members of the group that made the request, Ride Share Drivers United, remain anonymous, and its spokesman “Max B.” claimed this was for fear that Uber will cut off any outspoken member’s access to the ride-hailing app.

Uber’s ability to block a driver’s access to the app and deny income opportunities, without a right of reply, is one of the key complaints the group has asked the Ombudsman to probe.

Uber drivers are scored between one and five stars by passengers for quality of service. A driver with a low star rating risks being deactivated.

Also at issue is Uber’s repeated cuts to its driver-partners’ rates, which have eroded drivers’ hourly incomes.

“Driving for Uber was, until May of 2015, a good earner,” Ride Share Drivers United wrote in its correspondence to the Ombudsman. “Up until then, Uber was priced to be 30 per cent cheaper than taxis.”

Uber reduced fare rates by 15 per cent in May 2015 and then by a further 15 per cent in April 2016.

“Since then, the ability of drivers – and it is important to understand that there are many who drive full time, often as a result of being made redundant or being unable to find other work – to earn a living has disappeared,” the group wrote.

Uber’s driver-partners cover all vehicle costs such as fuel, maintenance, depreciation and insurance, customer perks such as mints and water, and pay GST on their earnings.

Uber claims a 20 to 25 per cent commission on each fare.

The group presented as evidence to the Ombudsman the audited income and expenses of two driver-partners, who both worked 40 hours in one week.

Those two drivers earned $596 and $473 respectively after expenses, which is below the new minimum wage of $695.

Earlier this month Uber made a concession to its UberX drivers in Melbourne and raised the minimum fare from $6 to $7.50. It also added a 55 cent service charge for passengers.

An Uber spokesman said the company would co-operate with the Ombudsman’s investigation.

“More than 60,000 Australian driver-partners choose to drive using the Uber app because they like to set their own schedule and be their own boss,” the spokesman said.

“We will be happy to assist the Fair Work Ombudsman with any questions they may have.”

The investigation has been launched at a pivotal time in Victoria. Last week the Andrews government succeeded in passing legislation to regulate Uber and terminate all existing taxi and hire car licences.

Taxi and Uber passengers will pay a $1 levy on each trip to cover the cost of the industry overhaul, which includes a $494 million compensation and transition package for taxi and hire car licence holders.

The Ombudsman has the authority to enforce workplace laws and can issue infringement notices or even take legal action if an employer is found in breach.

The Uber investigation follows a recent Fair Work Ombudsman finding against Pizza Hut, which was found in January to have widely underpaid its delivery drivers by putting them on exploitative contracts.

Article originally published by SMH – link: http://www.smh.com.au/business/workplace-relations/fair-work-ombudsman-investigates-uber-over-potential-breach-of-labour-laws-20170628-gx0a82

 

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