Editor's Note: The California Labor Commission ruled this month that Uber drivers are considered employees, not contractors. The decision could lead to higher costs for the company, which would have to cover Social Security, workers’ compensation and unemployment insurance. Uber is now appealing the ruling. Cab drivers in the city of Fremont, east of San Francisco, say Uber's low prices have cut into their livelihood.
FREMONT, Calif. – Every day, a long line of independent taxi drivers, largely Indian Americans and immigrants from Afghanistan, queue up at the Fremont, Calif., BART station, often waiting for more than an hour to capture a $20 fare.
Most taxis at the station are independent, unaffiliated with any cab company. Each driver in the queue is required by law to take any passenger that approaches them. A driver first in line is thus mandated to take a $10 fare, which sends him to the back of the queue upon his return, for another extended wait for passengers.
Drivers here work as many as 15 hours a day to make a daily take-home wage of about $125, after costs for gasoline, professional vehicle insurance and car maintenance are factored in. Most drivers here are the sole providers for their wives and children and struggle to live in the wealthy Silicon Valley region on a paltry income that is often less than minimum wage.
The Tri-City area – Fremont, Union City and Newark – is home to one of the largest concentrations of Indian Americans in the nation. It is also home to the largest population of immigrants from Afghanistan anywhere in the world.
Airport runs are the icing on a meager slice of cake: drivers can earn up to $120 for a run to the San Francisco airport, and $60-80 on fares to airports in Oakland and San Jose.
But corporate taxi giant Uber – a six-year-old venture capital-backed company – is allegedly threatening the livelihoods of these immigrant entrepreneurs, slashing fares by more than one-third as it attempts to broaden its market share in the San Francisco East Bay area.
Uber currently operates in 45 countries – including India – and is expected to hit an annual revenue of $10 billion by the end of 2015, according to Business Insider reports. The company had not returned several e-mails for comment by press time.
Indian American taxi driver Makhan Singh, owner of Fremont-based Jet Cab, told India-West he has seen his income drop by almost 50 percent since Uber started picking up fares in Fremont a year ago.
“I am losing about $1,500 per month to Uber,” stated Singh, who has two daughters, one who started kindergarten this year.
“Business is very slow,” he said, adding that many of his long-time “regulars” are now using Uber for their airport runs.
Using the Web site taxifare.us, India-West determined that a ride from Fremont to the San Francisco International Airport would cost around $115 pre-tip, with an independent taxi driver. Uber’s lowest fare – in its UberX car – is listed at $59-$75.
The Fremont to Oakland airport trip runs around $82 with an independent cab driver; Uber offers the run for $43 to $58, about half the cost. Fremont to San Jose – the most popular run for Silicon Valley dwellers – costs about $60 with an independent cab. An UberX ride to the airport can be had for one-third of the cost: $24 to $32.
Prior to the entrance of Uber into the Tri-City area, Singh would do 12 to 15 airport runs per week, which provided a cushion to the varying BART fares. Now, said Singh, he is lucky to get seven airport runs a week. Moreover, Singh told India-West, he has had to cut his own fares, not using the metered rate of $3 per mile as mandated by the city, but creating “deals” for his regular customers, in order to compete with Uber’s slashed rates.
Uber drivers have several advantages, said Singh, noting that they are not mandated to carry special insurance for commercial vehicles which costs as much as $400 per month. Uber drivers are also not mandated to pass criminal checks by the City of Fremont, nor are they subject to random urine tests for drugs.
Singh told India-West he has considered driving for Uber, but drivers who have worked for the company have told him that wages are low, averaging about $52 per day, hardly enough to sustain his family.
Fremont resident Makhan Virk, who has driven a cab for more than 19 years in various cities, drove for Uber for two months last year before quitting in a frustrated rage.
“I would make $50 to $60 per day with Uber,” Virk told India-West. “How do you pay rent and feed a family on that kind of money,” he queried, noting that he made $300 a day previously working for Yellow Cab, but paid a $95 per day “gate fee.”
Cab fare is pre-paid, so Virk did not have to worry about getting “stiffed” on a fare, but he often faced the prospect of driving belligerent passengers and people who insisted on drinking alcohol in his car.
Virk alleged that he would call Uber dispatch to notify the company of unsavory passengers, but noted that he was never allowed to turn down a fare.
“Uber says the customer is always right,” complained Virk, who pledged never to drive for the company again.
Virk, who is the sole income provider for his wife and three sons, said he drove his own car while working for Uber and had to provide his own, non-commercial insurance. He said he received no cash from the company and had to wait more than a week for wages, while still doling out cash each day for gas.
Moreover, customers do not tip drivers in cash: tips are automatically deducted from the fare which is paid via a smart phone app.
Fremont cabbie Wali – an Afghan native who asked to be identified only by his first name – told India-West: “Uber is a new business. We don’t mind, but they have new drivers with no background, which is not safe.”
Uber drivers are registered by the company, not by the city, noted Wali, and carry only private insurance. Often, the Uber-registered driver may pass the call along to a sibling or other relative, he alleged. “Nobody knows who is actually driving,” he stated, adding that he was concerned about the safety of women riding alone with an unknown driver.
“I would not let my wife or daughter ride in a private car,” stated Wali, who has driven his taxi in the Fremont area for more than a decade. Uber drivers should be subjected to the same criminal record checks and drug tests that independent drivers are subjected to, he stated.
Wali’s concerns for women’s safety in Uber cabs are borne out by a recent sexual assault case in New Delhi. Shiv Kumar Yadav, a 32-year-old Uber driver, was arrested in New Delhi last December, after allegedly raping a female passenger.
Yadav had been arrested in 2011 for a similar crime.
India has since suspended Uber’s license in the country, and re-rejected the company’s license application in late May, citing safety concerns. In a statement issued after Yadav’s arrest, the San Francisco-based Uber said safety was its top priority.