Uber Faces Class Action Lawsuit in Australia

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Uber Faces Class Action Lawsuit in Australia

More than 6,000 taxi drivers and car-hire operators are suing Uber in Australia for defying regulations and operated illegally.

CANBERRA, Australia. -- Uber is facing a new legal challenge Down Under.

More than 6,000 taxi drivers and car-hire operators are suing Uber in Australia, signing on to a major class action lawsuit. The suit alleges that Uber defied regulations and operated illegally in Australia, giving it an unfair advantage over local taxi drivers and other industry players that complied with the law.

Australian law firm Maurice Blackburn said it filed the case in the Victorian Supreme Court on Friday.

"Uber sells the idea that it does things differently, but in reality and as we allege, this has meant operating unlawfully, using devious programs like 'Greyball,'" Maurice Blackburn lawyer Elizabeth O'Shea said in a statement.

Greyball was a software program that prevented regulators and law enforcement from monitoring Uber's app. Uber used it in countries around the world, including Australia, China and South Korea, according to The New York Times, which first reported on Greyball in 2017. Uber said at the time that the software wasn't meant to target regulators, but to protectits drivers. After the Times report, the company prohibited the use of Greyball to target local regulators.

A spokesperson for Uber said the company had not yet been served with a class action claim in Australia, but was aware of media reports about the lawsuit alleging it had operated illegally.

"Uber denies this allegation and, if a claim is served making it, the claim will be vigorously defended," the spokesperson added.

The law firm did not disclose how much it was seeking in damages, but a spokesman told CNN Business that the case has the potential to "run into the hundreds of millions" of Australian dollars.

Uber's conduct "led to horrible losses being suffered by our group members. For those reasons, we are targeting the multi-billion dollar company Uber and its associated entities to provide redress to those affected," O'Shea said.

The lawsuit comes as Uber revs up for a highly anticipated public offering. The blockbuster IPO could value the Silicon Valley start-up at $84 billion.

In a US regulatory filing, Uber warned investors that it is involved in "litigation in a number of the jurisdictions in which we operate." The company noted that the "expensive and time consuming" lawsuits pose a potential risk to its business.

Australia is a key market for Uber. The company sold its operations in Southeast Asia, Russia and China in recent years, cutting losses in unprofitable markets to focus on business in regions like the United States, Europe, Latin America and Australia.

Australia's ride hailing industry is expected to grow about 14% to $543 million by 2024, according to research firm IBIS World.

Uber is already facing pressure from rival ride-hailing companies in Australia. Chinese start-up Didi Chuxing and Indian firm Ola both launched services in the country last year.

 

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