Uber Eats will amend its contracts to remove unfair terms that penalise restaurant owners, following an ABC investigation which triggered a probe by the consumer watchdog last year.

Key points: The ACCC says Uber Eats contracts contain unfair terms directed at restaurants

The ACCC says Uber Eats contracts contain unfair terms directed at restaurants The contracts make restaurants responsible for substandard food, even if the problem arose during delivery

The contracts make restaurants responsible for substandard food, even if the problem arose during delivery The new contracts mean restaurants are only responsible for matters within their control

Uber's contracts have terms which shift most of the blame for botched deliveries onto restaurateurs even if it is not their fault.

The company also states, in its terms, that its delivery riders are "agents" of the restaurant — even though Uber is the one who pays these couriers' wages and controls their workflow.

It also claims not to provide "any delivery or logistics services", which contradicts several sections of its own website promoting "delivering".

"Uber Eats has committed to changing its contract terms that we believe are unfair, because they make restaurants responsible and financially liable for elements outside of their control," Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), said.

"We consider these terms to be unfair because 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."

No consequences for Uber

To avoid legal action, Uber Eats agreed to amend its contractual terms to state restaurants would only be responsible for matters "within their control".

This includes situations involving wrong food items, and incorrect or missing orders.

Restaurants will also be given the right to dispute with Uber who should be responsible for any refunds to customers.

Uber Eats will begin rolling out changes to its contracts from August, and says the process will be complete by the end of the year.

Mr Sims said the ACCC would continue to monitor Uber Eats to ensure it "does not [unfairly] hold anyone else responsible for parts of the service it controls".

But he lamented that Uber would not amend its contracts unless facing legal consequence.

The regulator said Australian law was "deficient" because there were no financial penalties for companies that imposed unfair terms on to consumers on a "take it or leave it" basis.

All the ACCC could do was take a company to court, and convince a judge to strike out any offending clauses, it said.

Uber says it's not a delivery service but its website boasts "You crave, we deliver". ( Uber )

"It should be illegal to have these clauses in the contract in the first place," Mr Sims said.

"If it was illegal, then we'd be taking Uber Eats to court [and] they would face large penalties."

"That would force them to make sure their contracts with restaurants are appropriate — rather than wait for us to come along after the event and threaten to go to court."

"All Uber's doing is taking advantage of the deficiency in the law — we need to get the law changed."

Uber Eats' regional general manager, Jodie Auster, said she was satisfied with the outcome of the ACCC's probe.

Loading...

"We're pleased to have been able to engage constructively with the ACCC to resolve this matter," she said.

"Some of the key changes we'll be making to our contracts include providing more detailed information about our technology services, as well as greater clarity on how we handle complaints and process payments."

These include "the limited circumstances when restaurants need to cover the cost of refunds, such as when there is an incorrect item or items are missing".

The Transport Workers Union (TWU) also welcomed the regulator's announcement, but said more needed to be done to protect the rights of Uber's delivery riders.

"This is a welcome investigation by the ACCC which will help protect our local businesses against the Silicon Valley billion-dollar behemoth," TWU national secretary Michael Kaine said.

"The contracts Uber has with its workers are also crying out for regulation.

"Workers can get terminated without warning or the chance to appeal if there are complaints about food deliveries.

"If restaurants can be protected over customer complaints and when disputes arise then why not workers?"