Give Uber a brake

In brief - Damages claim against Uber rejected by District Court of Western Australia

A Perth-based Uber driver has failed in his attempt to sue Silicon Valley-based giant Uber and Dutch-based holding company Rasier Operations. However, the case serves as a reminder for businesses to manage safety and reputational risks by including robust termination provisions in their independent contractor agreements.

Uber driver's contract terminated following passengers' safety complaints 

Mike Oze-Igiehon (Uber driver), who alleged the billion-dollar global ride sharing service Uber breached its contract with him by unlawfully deactivating his account, has lost his $500,000 damages claim. 

The Uber driver was registered with the Uber platform from May 2015 until November 2015. He initially maintained a high rating with the ride sharing service earning up to $10,000 a month. 

But the Uber driver's contract with the service platform was terminated after multiple negative complaints were made against him. Users claimed he was "over the speed limit…on multiple occasions" and was "either falling asleep or drunk" as he would "cross the centre-lines on the freeway".

Uber proceeded to terminate the Uber driver's contract under the terms and conditions of their agreement. The agreement provided that if a driver conducts themselves in such a way that a critical safety issue or critical issue relevant to the brand and reputation of Uber has been committed by a driver, then that would be seen to be a material breach of the driver's agreement with Uber. 

Uber sued for damages for economic loss and severe mental depression

The Uber driver claimed Uber was negligent for not sharing its concerns as to the nature of user passenger complaints made about him until after his contract was terminated. He sued Uber for damages for economic loss and severe mental depression that he claimed was caused by the deactivation. 

Uber claimed the Uber driver's unsafe conduct in driving while fatigued affected Uber's reputation and placed the Uber driver, his passengers and members of the public at risk and that this amounted to a material breach of their agreement. 

Uber acted reasonably and in accordance with terms of agreement, Court finds

The District Court of Western Australia rejected the Uber driver's $500,000 claim for damages. The Court found "having received complaints about the quality of [the Uber driver's] driving, [Uber] acted reasonably" when it deactivated the Uber driver's account. 

Uber was not required to prove that each complaint received was truthful and accurate, but was required to deal with the complainant reasonably, consistent and in accordance with the terms of the agreement. 

Uber's receipt of a second complaint from a different passenger relating to a different time period but about the same issue, was the impetus for deactivation of the Uber driver's account. 

Consider termination provisions in independent contractor agreements

The case demonstrates the importance of having robust provisions in independent contractor agreements that provide a business with the ability to terminate agreements if the contractor's actions create safety risks. Ultimately, this provides the business with a tool to protect its reputation.