Economy First Look

More trouble for Uber: CEO's taped argument with driver highlights workers' concerns

The driver’s grievances echoed those raised by many of his peers in recent months.

Uber CEO Travis Kalanick speaks to students during an interaction at the Indian Institute of Technology (IIT) campus in Mumbai, India, on Jan. 19, 2016. Mr. Kalanick says he needs leadership help after a video has emerged this week of him arguing heatedly with a driver about fares.
Danish Siddiqui/Reuters
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Uber CEO Travis Kalanick may find it harder to get a ride, now that one of his company’s drivers, Fawzi Kamel, has given him a customer rating of one star.

After giving Mr. Kalanick a ride on Super Bowl Sunday, Mr. Kamel confronted him over the ridesharing company’s pricing models, telling him, “You’re raising the standards” of the vehicles drivers must buy to qualify for the high-end Uber Black service, “and you’re dropping the prices.”

Their discussion – captured on video – soon escalated, as Kamel told Kalanick, “I lost $97,000 because of you. I'm bankrupt because of you.” After another heated exchange, Kalanick blamed Kamel for his problems. “Some people don't like to take responsibility,” he said. “They blame everything in their life on somebody else. Good luck!” He then slammed the door.

While Kalanick denied Kamel’s charges – and has since apologized for his behavior – the driver’s grievances echoed those raised by many of his colleagues in recent months.

Uber has more than 600,000 drivers in the United States alone, who are classified as independent contractors, without many of the benefits typically offered to employees. "And the gig has gotten harder for longtime drivers," Bloomberg’s Eric Newcomer wrote on Tuesday. "In 2012, Uber Black cost riders $4.90 per mile or $1.25 per minute in San Francisco, according to an old version of Uber's website. Today, Uber charges $3.75 per mile and $0.65 per minute. Black car drivers get paid less and their business faces far more competition from other Uber services."

Financial problems drove many Uber drivers to join minimum-wage workers in a nationwide “day of disruption” last November, protesting not only to raise their minimum wage, but also their status: drivers are currently categorized as contract workers, but many are pushing to be classified as Uber employees – a change that would make them eligible for a wide range of protections and benefits.

“If Uber is a house of cards, this [driver-as-contractor designation] is a key part of the foundation that, once removed, would demolish the structure,” Ryan Felton wrote last week in Jalopnik, a news and opinion website about the automotive industry.

As legal challenges to that designation have grown, the company has faced a range of other problems in recent months, including federal charges that it misled drivers about potential earnings, a sexual-harassment scandal, and protests over Kalanick’s seat on President Trump’s economic advisory council.

On Tuesday, the video of its CEO arguing with its driver gave the company yet another PR crisis. Kalanick moved swiftly to contain the damage. “I want to profoundly apologize to Fawzi, as well as the driver and rider community, and to the Uber team,” he wrote in a company-wide email.

“The criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”