Business

Who cops the cost of an Uber Eats refund and why that's about to change

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An investigation by Australia’s leading consumer protection agency has prompted Uber Eats to commit to changing its contracts, which currently hold restaurants accountable for unsuccessful deliveries that aren’t their fault.

Video above: The restaurants boycotting the delivery apps

Refunds for unsuccessful Uber Eats meal deliveries have come from the pockets of restaurants, even though they have had no control over meals once they've been picked up from their venues.

Since 2016, Uber Eats' contract terms have given customers the right to a refund at the expense of restaurants regardless of whether they are responsible for the issue.

Now, that's set to change.

An investigation by the Australian Competition and Consumer Commission has scrutinised the "unfair terms" of the delivery platform's contract.

"They make restaurants responsible and financially liable for elements outside of their control", ACCC Chair, Rod Sims said.

"They appear to cause a significant imbalance between restaurants and Uber Eats; the terms were not reasonably necessary to protect Uber Eats and could cause detriment to restaurants."

Righting their wrongs

Following the ACCC's investigation, Uber Eats has committed to amending the terms that have been deemed as unfair.

Restaurants will only be held responsible for matters within their control, such as incorrect food items and missing orders.

They will also have the opportunity to dispute refunds, which will be reviewed by the delivery platform.

"We will continue to monitor Uber Eats' conduct to ensure restaurants are not unfairly held responsible for matters outside of their control and Uber Eats does not hold anyone else responsible for parts of the service it controls," Mr Sims said.

Too little too late for some

This is not the first time delivery services like Uber Eats and Menulog have been called out for exploiting small businesses and delivery drivers.

In August last year, The Feed reported that a growing number of Australian cafes and restaurants were choosing to boycott food delivery services.

Owner of Burgers by Josh, Josh Arthurs, deemed food delivery apps as damaging to the hospitality industry, withdrawing his restaurant from their services because of the disproportionately high percentage of profits they take.

"35 per cent of what you take is your profit margin, but they take all that for delivery, so you get left with nothing," Mr Arthurs said.

Like many other restaurant owners, Mr Arthur was sick and tired of bearing the cost of food that turned cold, became damaged and sometimes went missing after leaving his restaurant.

Uber Eats will be rolling out changes to their contracts which they say should be completed by December this year.

The Feed reached out to Uber Eats for comment and received no reply at the time of publication.