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So What Are That Uber Driver and Travis Kalanick Arguing About Exactly?

Uber pricing has changed significantly since the app launched. Photo: KHALED DESOUKI/AFP/Getty Images

Earlier this week, video surfaced of Uber CEO Travis Kalanick arguing with a driver named Fawzi Kamel. Recorded by Kamel’s dashboard camera, the clip shows the two men discussing changes to Uber’s business model and fare rates over the years. Kamel, a driver since 2011, argues that Kalanick’s price drops over the past six years bankrupted him to the tune of “$97,000”; Kalanick ends the conversation by slamming the car door after telling Kamel, “some people don’t like to take responsibility for their own shit.” The whole thing is heated, and slightly hard to hear, and involves Kamel quoting several numbers — fares, mileage rates, his personal debt — which Kalanick disputes. Kalanick would later publicly apologize for his behavior, and announce that he’s seeking “leadership help.” But Kalanick’s temper aside, the video is a stark reminder of just how much Uber’s model has changed since its launch, and how drivers are often the ones paying for it. So let’s nail down just what the argument is about.

When Uber officially launched on the streets of San Francisco in 2011, the app was purely a luxury “black car” service, meaning drivers who wanted to work for Uber needed to have a vehicle from an Uber-approved list of high-end makes and models. (This list still exists today, denoting which cars drivers can use for UberBlack and UberX, though some cars can cross categories.) For the rider, a trip in an Uber in 2011 cost about 1.5 times as much money as a ride in a regular cab. This — and remember the ride-hailing market had yet to be flooded — wasn’t a terribly high price to pay for the ease of being able to call up a car on your phone whenever you needed one, especially in San Francisco’s less-than-efficient cab ecosystem. Uber fought to get drivers on board with the then-fledgling app. Every driver was given an iPhone and, like with Uber’s Seattle launch, the company even contracted directly with existing black-car drivers to get them to work for Uber. They promised flexible hours and the potential to make a decent chunk of change driving for them.

In 2012, Uber fares were calculated, like most city cab fares, by distance (if the car drove faster than 11 mph) or by time (under the 11 mph marker). Uber charged riders $4.90 per mile or $1.25 per minute, with a minimum fare of $15. But in 2013, UberX — the service most people associate with the company, which allows for just about anyone with a license and a car to drive for Uber — launched in San Francisco. An UberX ride cost 35 percent less than an UberBlack ride — a large saving if you were somebody just looking for a ride and didn’t mind hopping into a Prius instead of an Acura. With the introduction of cheaper UberX rides, the company also dropped the fare price on UberBlack by 10 percent, a move Kalanick attributed to searching for the “right market equilibrium.” In the video from this week, Kalanick says the company “went low-end” (read: introduced UberX) because not doing so would have priced them out of the market. “We didn’t go low-end because we wanted to. We went low-end because we had to … because we’d be out of business.”

But while Kalanick and his colleagues have continued tweaking prices to stay competitive against companies like Lyft and now-defunct Sidecar, drivers were the ones who really felt the effects. What had once seemed a great opportunity for black-car drivers like Kamel — records indicate Kamel had a lengthy history working in the black-car and limo industry — slowly became less and less lucrative, as Uber fares continued to fall with the start-up’s rising popularity. UberBlack fares were dropped again in 2014 — by which point Uber had ditched the time or distance fare model for a single-fare calculator — bringing the base fare to $7, with Uber charging $3.50 per mile and $0.55 per minute. In August 2014, Uber would nudge those numbers upward, but the current fare rates still ring in below what an OG Uber driver would have been making in 2011 — a gripe Kamel made clear while Kalanick was in his backseat.

“We started out with $20,” Kamel told Kalanick. “How much is the mile now, $2.75?” It’s unclear where Kamel got the $20 figure. The minimum fare — for Uber and now UberBlack — has remained steady at $15. It’s possible Kamel was referencing a typical dollar amount he earned per hour, or even per ride, several years back, but Kalanick isn’t wrong when he calls “bullshit” on the $20 figure Kamel is quoting. As for the “$2.75 per mile” comment, an UberBlack ride costs $3.75 per mile today.

But Kamel’s point remains, even if his figures are slightly off. In an interview with NBC following the video, Kamel said, “the first Uber black car drivers are the real investors in Uber,” but those drivers haven’t been included in Uber’s success. “And the worst part is, they call us partners, [but] they make the rules, set the price and they even choose the cars you can use,” he said.

While Kamel telling Kalanick he lost $97,000 directly because of the Uber CEO is most likely hyperbole (Select All confirmed Kamel filed for bankruptcy in California in 2016), he’s certainly right in feeling like 2011’s Uber and today’s Uber are markedly different beasts. UberX has since been joined by UberPool (sharing a car with strangers headed to a similar location for a discount), which further tightens the market for drivers. For someone like Kamel, who went all in on Uber as a luxury-only service, working as a driver just doesn’t offer what it once did. “Uber decided they don’t want Lincoln Town Cars anymore,” he told NBC. As Kalanick mentions in the video, Uber is decreasing the number of black cars on the road, which could be good for drivers like Kamel. It’s not clear if that will be quite enough, though. Some UberBlack drivers will offer their cars for both UberBlack and UberX customers — a tactic known as “cross-dispatching” — which gives them more opportunities for rides, but at a significantly lower rate.

And it’s not as though UberX is a picnic, either. Kamel had a set of specific complaints about his car category, but driver dissatisfaction is a problem across Uber’s categories: Drivers have been known to sleep in their cars in between shifts to maximize profits, and low fare rates continually lead to driver strikes around the world. If Kalanick wants to keep his drivers happy, he may need to take some responsibility for his shit.

Select All’s attempts to reach Fawzi Kamel were unsuccessful. Uber declined to comment on this story.

What Are That Uber Driver and Travis Kalanick Arguing About?