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Uber has agreed to pay $271.8 million to Australian taxi and hire car drivers, operators and licence holders to compensate them for losing income and licence values when the rideshare giant moved into the Australian market.
The class action against Uber was expected to go to trial in the Supreme Court of Victoria on Monday but Judge Lisa Nichols vacated it after the rideshare giant agreed to the colossal settlement.
It was the fifth-largest class action settlement in Australian history and one of the most successful class actions against Uber, the lawyers behind the case said.
Maurice Blackburn Lawyers principal Michael Donelly said the settlement was preceded by a five-year legal battle in which Uber "fought tooth and nail at every point along the way".
"But on the courtroom steps and after years of refusing to do the right thing by those we say they harmed, Uber has blinked, and thousands of everyday Australians joined together to stare down a global giant," Mr Donelly said.
"This case succeeded where so many others have failed. In Victoria, Queensland and Western Australia, cases were brought against governments and all of them failed," he said.
"What our group members asked for was not another set of excuses – but an outcome – and today we have delivered it for them."
Mr Donelly said the settlement would put "beyond any doubt" that Uber had been held accountable.
He confirmed Maurice Blackburn's fees would be between $30 million and $35 million, and the rest of the proceeds would be divvied up between plaintiffs. The money will not be split equally because some group members suffered greater financial losses than others.
In a statement provided to the ABC, Uber said that ridesharing regulations "did not exist anywhere in the world, let alone in Australia" when the company first started.
"Today is different, and Uber is now regulated in every state and territory across Australia, and governments recognise us as an important part of the nation's transport mix," the statement read.
"Since 2018, Uber has made significant contributions into various state-level taxi compensation schemes, and with today's proposed settlement, we put these legacy issues firmly in our past."
More than 8,000 taxi and hire car owners are part of the class action suit, which was filed in 2019.
The lawsuit alleges that Uber Australia and its parent companies knowingly operated illegally and therefore had an unfair advantage over taxi and hire car drivers who were complying with the law.
"Our key allegation is that in launching UberX, Uber used unlicensed cars and unaccredited drivers. Uber said that was innovation, we said it was illegal, a conspiracy by unlawful means," Mr Donelly said.
UberX is the name of the private car service offered by the company, which also offers a car-pooling service.
The lawsuit also alleged that Uber misled regulators, geoblocked authorities and used an electronic "kill switch" that cut access to Uber servers to thwart law enforcement during raids.
The Uber files, leaked documents released in 2022, revealed Uber used similar strategies to establish itself in nearly 30 countries.
Lead plaintiff Nick Andrianakis, a former taxi driver, said the settlement was a win for small businesses, taxi drivers and taxi and hire car operators.
"I've lost my passion for work. I lost my [taxi licence] plates that were half a million dollars each. And I lost my income that provided food on the table for my family," he said, adding he had lost more than $1 million in total.
Mr Andrianakis was forced out of the taxi business when Uber entered the Australian market, he told ABC when the lawsuit was filed.
"My family has always been into taxis, my father drove taxis … my son drove taxis while he was at uni," Mr Andrianakis said.
"But when Uber came to our shores illegally, like pirates, they broke every law, every regulation."
Former MP and taxi driver Rod Barton, who is one of the plaintiffs on the class action, told ABC Radio Melbourne that he felt "vindicated" by the result.
"They (Uber) knew full well they were required to have their drivers and their vehicles fully licensed. They chose not to do that, and they did a lot of things that gave them a commercial advantage against the taxi industry, which established their foothold," Mr Barton said.
"They've accepted that now, clearly, and that acceptance has just cost them $272 million."
The Supreme Court, which has to formally approve the settlement before it is paid out, is expected to look at an approval application in April.
Another non-class action proceeding by Taxi Apps Pty Ltd is expected to go to trial in the coming weeks.