Uber understood it was operating illegally when it launched in Australia and fiercely lobbied governments to legalise its lucrative Australian operations, documents leaked to the Guardian reveal.
Taxis and hire cars are required by Australian state laws to obtain a licence prior to operating, but Uber set up shop in Australia in 2012 without the required permits.
It is a tactic the company has used repeatedly in markets around the world: launch first, establish a loyal customer base, and then lobby aggressively for laws to be changed.
Remarkable details of Uber’s Australian operations are detailed in the Uber files, an unprecedented leak of company data to the Guardian.
By January 2015, business in Australia was booming: Sydney had become its seventh and Melbourne its eighth biggest “unprotected” market – one where the company’s operations were not yet lawful and revenue was at risk – according to a presentation given to executives.
In April 2015, the company’s head of public policy, Corey Owens, urged his team to ramp up their lobbying efforts. “Ops has poured gasoline on the fire, so now it’s up to us to protect what they’ve built,” he said in an email to his team.
In September 2015, in a presentation to managers in Las Vegas, another Uber executive acknowledged that the company was “still not regulated in any Australian state”.
“Regulator very grumpy, yet modest levels of enforcement,” notes from the presentation read.
The ACT made Uber legal in October 2015, but most of the states did not begin to legitimise the service until the following year.
Uber’s ultimate success in Australia had a devastating effect on holders of taxi licences, and “presents a serious case study of regulatory failure”, according to Michael Donnelly, a principal lawyer at law firm Maurice Blackburn, who is running a class action lawsuit against Uber on behalf of licensed taxi operators.
“In the future, state government regulators have to be far more resistant to large private companies entering the market and seeking to bully them in the way that Uber did.”
Uber is defending the class action and has denied as part of the proceedings that it deliberately sought to flout state laws governing the licensing of commercial drivers and vehicles.
Former Labor staffer a key lobbyist
The trove of documents, which span 2014 to 2017, reveal details of Uber’s intense lobbying of state transport authorities.
The company hired lobbyist John Richardson, a former senior Labor staffer, to petition the New South Wales government on its behalf, and claimed it was working with the NSW Labor opposition to write a bill that aimed to legalise Uber in that state.
According to a 10 July 2014 email that Richardson sent to a colleague, the former adviser to the Hawke, Keating and Carr governments was to “provide public affairs support to Uber for state of New South Wales and advice regarding the rest of Australia”.
He was to provide a “comprehensive stakeholder and influencer engagement program leading to regulatory approval/accommodation of Uber Ride Sharing platform and service”.
He said he expected to be “very active for four months from July with NSW parliament in session till end of November and an election due in March”. “… de facto regularisation of status may be achieved in this time frame”, he wrote, but full legislation leading to regulatory approval of Uber was “unlikely before mid 2015”.
Richardson, who runs PR firm Richardson Coutts with former Liberal staffer Stephen Coutts, was registered as a lobbyist for Uber in NSW, and told Guardian Australia he was also registered at the time in South Australia and federally but those registers do not display dormant clients. “We were not registered in Victoria because we didn’t act for Uber in that jurisdiction,” he said.
In the September 2015 presentation to managers in Las Vegas, Uber executives claimed to be working closely with the NSW Labor opposition to write legislation that would legalise Uber. “In Australia, the opposition always sees us as an opportunity,” the company said. “We are literally writing a bill for them to look smart.”
When asked about the matter, Richardson told Guardian Australia his firm “provided input [into] the [NSW Labor] opposition’s policy on the gig economy”.
Labor’s then-spokesperson for transport, Ryan Park, told Guardian Australia in a statement he met with stakeholders including Uber and it was “certainly not unusual to receive suggestions or proposals from stakeholders”, but denied the company wrote legislation for the party.
“The only people who draft Labor party legislation that is debated in the parliament are those parliamentary members of the Labor party with the assistance of parliamentary counsel,” the statement said.
In the same presentation, Uber executives noted that “the hyper-aggressive tactics [that were] successful in the US” were not working to force changes to the law elsewhere in the world.
“We used to try and use scale to force discussion around reform. That worked throughout the US. Not the same impact in [Europe, the Middle East and Africa”],” it said.
No ‘secret deal’
The documents also reveal claims made within the company that it had struck a secret deal with Victoria’s taxi authority.
Emails show that in early September 2014, Uber’s policy head for the Asia Pacific, Jordan Condo, met with the chair of Victoria’s Taxi Services Commission, Graeme Samuel – a former chair of the Australian competition regulator who was described by Uber staff as “a staunch pro-competition advocate”.
“An agreement was reached [with the TSC] that will create a process to accredit uberX drivers in the coming months with a plan to license ridesharing in early 2015,” Uber staff said in a weekly email roundup of lobbying activity around the globe.
Samuels told Guardian Australia: “There was no secret deal done with Uber or anyone else associated with rideshare services.”
“[Rideshare] drivers were always entitled to be licensed as drivers of commercial passenger vehicles simply by passing a medical and criminal check,” he said.
But he said he did not have the remit in his position at the TSC to “license ridesharing” in Victoria.
This was because two licences were required to run a taxi – one for the driver and one for the vehicle. At the time, there was no way for Uber drivers to license the cars they drove.
Parliament needed to change the law to allow this “and obviously it was not within the remit or power of the TSC to indicate, let alone undertake, any timeline for such a law to be promulgated – or indeed whether government was of a mind to do so at any time in the foreseeable future,” Samuel said.
In 2015, Samuel’s authority began criminal prosecutions of a number of the company’s drivers for operating without the correct licences.
He said “Uber determined to simply flaunt the vehicle licensing requirements”, while rival Lyft decided not to operate in Australia until the law allowed it.
“The delay in legalising rideshare afforded Uber the opportunity to establish itself as a virtual monopolist in rideshare and it has been almost impossible to topple it from that perch.”
A ‘devastating effect’ on taxi drivers
Taxi licence holders have launched a class action lawsuit against Uber in the Victorian supreme court over the period in which the company operated without the required permits in Australia.
Lawyer Michael Donnelly, who is leading the class action, told Guardian Australia: “We allege that the commencement of Uber in Australia, operating illegally, had a devastating effect on the holders of taxi licences in Victoria, Queensland, New South Wales and Western Australia.
“Taxi licence holders were often from working-class backgrounds, and had invested enormous sums of money to acquire taxi licences in a full and regulated market. The practices of Uber that we allege were illegal, caused the value of those licences to be severely impacted.”
In a preliminary ruling in the case, Associate Justice Patricia Matthews found there were reasonable grounds to suggest that Uber was operating illegally in Melbourne from 23 January 2014 and illegally in NSW, Queensland and WA from 14 April 2014.
She said that “the attempts made by the defendants [Uber] to avoid enforcement were an aspect of building scale, garnering public support, and growing the business (including by attracting and retaining UberX partners) until they had managed to flip a city”.
The company’s business model of “flipping” cities to Uber and building scale meant the company knew a regulatory fight was “inevitable” when it launched in Melbourne and Sydney, Matthews said in the ruling, which was handed down on 26 April.
Matthews said the commission of offences as a result of Uber’s operations in Victoria, NSW and WA was “not a theoretical possibility”.
“It was, by virtue of the manner in which UberX was launched and operated in the relevant states, a certainty.
“I accept the plaintiffs’ submission that ridesharing offences were being committed systemically and on a large scale,” she said. “Even if at trial it is found otherwise, there are reasonable grounds for making this finding as part of this application.”
The ruling allowed taxi licence operators to use documents that Uber claimed didn’t have to be disclosed because they contained legal advice. But the judge found that some of the documents could be used in court because they contained advice on how to circumvent the law.
Uber is appealing the ruling.
A spokesperson for the company said in a statement to the Guardian that Uber started operating globally at a time when regulation of its services “did not exist anywhere in the world” and it had openly championed changing the law.
“Of course, our initial approach was at times too brash, and we have admitted many mistakes and missteps,” the spokesperson said.
“Today’s environment is very different, and Uber is now regulated at the federal, state, local, and often airport level, in more than 10,000 cities around the world.”
