Uber Eats drivers who allegedly carried NSW passengers unlawfully could cost rideshare giant $1.5m in fines

New South Wales authorities have launched legal action against Uber, alleging the rideshare giant allowed 57 food delivery drivers to transport passengers without clearing the required background safety checks.

The independent state regulator, the NSW Point to Point Transport commission, commenced proceedings against Uber this week. It claims Uber – which is facing a maximum fine of about $1.5m – failed to ensure it was complying with safety standards designed to protect passengers.

The regulator has alleged that on two separate occasions in August and December 2022, failures in Uber's systems allowed "multiple food delivery drivers", who were only legally allowed to deliver food on the company's Uber Eats platform, to also carry passengers.

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The glitches meant that Uber Eats drivers received and were able to accept trip offers from passengers, and are understood to have been temporary – with one lasting one day, and the other four days. The error affected less than 1% of Uber's food delivery drivers.

Under NSW law, drivers conducting rideshare services must undergo several checks to ensure passenger safety, similar to how taxi drivers are screened, including appropriate vehicle registration and driver background checks.

The rigorous safety laws in place for taxi and rideshare passenger services do not apply to food delivery services.

The commission has brought 57 charges against Uber related to the two separate occasions when its systems failures occurred, with the maximum penalty for each offence being a fine of $27,500.

Each charge alleges that Uber failed to ensure the 57 drivers held an unrestricted Australian drivers licence or an unrestricted licence of a total of at least 12 months in the preceding two years – which is a requirement to provide a taxi or rideshare service.

"Safety is my priority, and allowing drivers to provide passenger services without having undergone appropriate background checks poses a serious safety risk to passengers and breaches the law," said Anthony Wing, the regulator commissioner.

"Uber has identified the issue that allowed rideshare trips to be undertaken by its food delivery drivers, however, it should not have occurred in the first instance."

An Uber spokesperson said: "We take our obligations to safety and regulatory compliance seriously and have a strong track record when it comes to safety across our platform.

"Immediately upon becoming aware of these issues, we acted swiftly to rectify them."

Oversight of drivers has developed into a significant issue for rideshare and taxi operators alike.

Earlier this year, Uber was ordered to pay $10,000 in damages to an Australian driver after it permanently banned him from working due to a passenger complaint but failed to gather evidence that he had breached its code of conduct.

Meanwhile, the point to point commission's fresh legal action against Uber comes amid its long-term crackdown on rogue taxi drivers in NSW, following a spike in reports of drivers refusing to use meters and demanding inflated upfront fares .

The commission's introduction followed deregulation of the taxi industry in 2017. Following deregulation, a database of drivers who have faced disciplinary action for misconduct was discontinued.

The taxi industry are now calling for stronger regulation and reintroduction of the database to help operators weed out such drivers.