So who’s right: Travis Kalanick or his Uber driver?
In a scene that could have been lifted straight from a “CEOs Behaving Badly” reality TV show, the Uber chief executive was recently caught on a dashcam arguing with the driver of a Uber black car about the company’s prices.
The heated exchange shows driver Fawzi Kamel haranguing the executive over Uber’s declining fares. Kalanick insists, “we’re not dropping the prices on black [cars],” but Kamel persists, saying he’s “bankrupt” because of falling rates.
“We started with $20,” he says. “How much is the mile now, $2.75?”
Kalanick, using an expletive, told Kamel he was wrong.
Have rates really gone down?
Kamel is generally correct that Uber fares have decreased in recent years. According to older versions of Uber’s website that were archived, an Uber Black ride in San Francisco in 2012 cost $4.90 per mile or $1.25 per minute when the vehicle slowed below 11 miles-per-hour in traffic. Today, the rate is just $3.75 per mile plus 65 cents per minute, regardless of speed.
Kamel flubbed the current mileage rate — he was low by a dollar — but it’s true that rates have declined, so we’ll give him the point.
Rates have also gone down in Boston. In October 2013, the company slashed its base fare for Uber X rides in Boston from $5.00 to $2.50, the minimum fare from $10 to $4, and the per-mile rate from $2.60 to $2.05.
Today, after further cuts, the per-mile Uber X rate in Boston is just $1.24, plus 20 cents per minute. Uber has also boosted its cut of every fare from 20 to 25 percent, further squeezing drivers. (The minimum fare has ticked back up to $6.35, though.)
Uber says full-time drivers in Boston make about $732 a week on average
About that $20
But what did Kamel mean when he said, “we started with $20”? It’s not certain, but he was likely referring to the minimum fare. According to older Uber rate charts, the minimum fare for a black car in San Francisco in 2012 was $15, the same as it is now. Point Kalanick; however, minimum fares for larger “UberXL” vehicles have plummeted in San Francisco, from $25 in 2012 to $7.35 today. Maybe that’s what Kamel was thinking of.
But today’s Uber is different
However these numbers come with important qualifications.
First, rates vary by region and service type — in addition to black cars, the company offers lower-cost Uber X rides, plus other services. Second, the most drastic cuts took place several years ago. Surge pricing — higher rates that kick in during busy periods — can also boost fares significantly. And most importantly, fares are calculated differently now than in 2012, when passengers paid the per-minute charge while moving slowly.
The number of potential passengers has also increased dramatically since 2012, as more and more people are in the habit of using Uber to get around. Uber has stressed this repeatedly when it lowered fares, and has sometimes offered drivers guaranteed pay as an incentive to stay on its network for more hours of the day.
“We’re so confident in the earnings gains drivers will see that we’re making earnings guarantees in every city where we’re cutting prices,” the company said in 2015.
On the other hand, Uber drivers have a lot more competition from each other. The introduction of Uber Pool, in which multiple passengers share a ride, has also aggravated drivers, who complain about the service’s super-low fares and glitchy routing algorithm.
Dan Adams can be reached at daniel.adams@globe.com. Follow him on Twitter @Dan_Adams86.