Here’s Why Uber Could Soon Be Required To Allow In-App Tipping

They say that you should keep your opinions on religion, politics, and sports to yourself. Based on the vitriol generated by the topic on the internet, I feel like “your stance on tipping Uber drivers” should be added to that same list. Peoples’ perspective on tipping Uber drivers seems polarizing, and you’ll rarely find anyone who is indifferent about it.

Uber’s stance on tipping drivers

As I wrote about a few weeks ago, Uber has softened their stance on tipping in a subtle way. In the past Uber’s website said the following about tipping:

Do I need to tip my driver?

You don’t need cash when you ride with Uber. Once you arrive at your destination, your fare is automatically charged to your credit card on file — there’s no need to tip.

However, nowadays the Uber website says the following:

Can I tip my driver with the app?

The Uber app does not include a tip when billing you for a trip fare.

In most cities, Uber is a cashless experience. Tipping is voluntary. Tips are not included in the fare, nor are they expected or required.

As a rider, you are not obligated to offer your driver a gratuity in cash. If you decide you would like to tip, your driver is welcome to accept.

Make of it what you will, but that’s what they say.

My stance on tipping Uber drivers

Here’s my stance on tipping Uber drivers, which I in no way claim is better than anyone else’s:

  • I don’t tip with UberBLACK, since I think the prices are typically fair
  • In markets where I personally think Uber is too cheap, I will tip (for example, in Los Angeles, UberX costs 90 cents per mile nowadays, which is about a third the price of a taxi)
  • For markets where I find UberX prices to be “fair” (like New York City, for example) I tip if it’s a great experience, but typically don’t otherwise

Having said the above, I think it’s important to acknowledge the following:

  • One of the selling points of Uber is that you don’t need cash, so I’m annoyed on one hand by the lack of ability to tip in-app; if tipping is going to be expected by drivers, make it possible through the app
  • I totally agree that the tipping culture in the US is out of control, but it doesn’t change the fact that people need to make a living, and that Uber prices in some markets are unsustainably low; I believe in living and letting live

Seriously, what expectations can I have in an UberX in LA when the price is a third the cost of a taxi, and you’re expected to tip in a taxi but not in an Uber? The math just doesn’t make sense.

Uber may finally be forced to allow in-app tipping

Well, it looks like things may soon be changing. Bloomberg reports that New York City’s taxi and black car regulators plan to introduce a rule that would require Uber to add an in-app tipping feature, and it could happen as soon as July. Per the article:

Uber is facing a similar push in California, where a state lawmaker introduced a bill early this year that would require ride-hailing companies to accept tips via credit cards. If Uber is forced to adopt tipping in its two most important U.S. markets, it wouldn’t make much sense to refuse to do so elsewhere. Uber drivers have been asking for a tipping option for years. As Uber faces myriad controversies this year, it’s locked in intense competition with Lyft Inc. for drivers, and any worker who feels tipping is important can easily switch to Uber’s rival.

A pro-tipping rule in New York would be a big victory for the Independent Drivers Guild, an organization that Uber helped set up last year in conjunction with the International Association of Machinists and Aerospace Workers, a trade union. The drivers guild has made tipping a priority in recent months and pushed the New York City regulator to take action. The group said the rule could mean $300 million of additional income for Uber drivers in New York each year if passengers tip at the same rate as in yellow cabs.

Bottom line

While Uber has been fighting policymakers for years, I imagine that if tipping is adopted in New York and Los Angeles, this will spread very quickly. I see both sides of the argument here. On one hand I see merit to Uber being a cashless system where good service is the norm, rather than just based on tipping.

However, I also genuinely believe that the fares are too low in many markets, at least if you have any expectations in terms of the quality of cars and drivers. Some will say “well if the drivers don’t like it they can do something else.” Personally I don’t think that’s totally fair. A lot of people gave up their jobs to become Uber driver based on things they were promised, while Uber has been cutting prices in order to gain market share, at the expense of their drivers (though it’s sort of good for consumers, at least in the short term).

Some will obviously be opposed to this, because it ultimately raises the cost of an Uber ride. At the same time, I imagine those who sometimes tip Uber drivers will mostly be in favor of this, since it will make it easier to tip.

What do you guys think — would Uber adding an in-app tip feature be a good or bad thing?

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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Comments

  1. Who is the moronic lawmaker in California who is introducing this bill? We need an email address to complain. Uber was founded upon NOT needing to tip. It was part of their original business model that got so many of us onboard in the beginning. Contrast that with the RIDICULOUS “You are not a real person if you don’t have a Facebook account” requirement in Lyft’s early rollout.

  2. @Louis, In CA one need not apply the adjective “moronic” when describing a state lawmaker, its implied and thus redundant.

    They can add the ‘option’ all they want, one of the selling points of Uber is not needing to deal with tipping, I won’t be using said ‘option’.

  3. Tipping is the No. 1 horrible thing in the US, not only about the taxi but also the restaurants.

    On the other hand, fares should be decided by the market, not to be adjusted by tipping based on what YOU think the market rate is. To be honest, I think one reason that Uber is popular is that it comes with lower than market rates, I speak for my experience in NYC. How persistent this can go? I am not sure, check the balance sheet of Uber and again how the regulators gonna do.

  4. I’m shocked that PROGRESSIVE lawmakers are considering the outmoded and RACIST institution of customary tipping.

    Tipping entrenches WHITE PRIVILEGE like no other. Ceteris paribus, the average yellow cab driver is more likely to pick up a white person because black people are stereotyped as poor tippers.

    FUCK TIPS. Do I care that people are paid fairly, OF MOTHERFUCKING COURSE, BUT THAT SHOULD BE THE RESPONSIBILITY OF THE EMPLOYER, NOT OF THE CUSTOMER.

    Lawmakers, if you wish, enforce minimum fares — NOT TIPS.

    I’ll say it again, FUCK TIPS. FUCK TIPS IN THE ASS

  5. I get sick of Jason’s incessant foul language. Get an education so you can make your point with more than 4 letter words.

  6. Why is this worthy of regulation? Is a waiters’ union coming down the pike to regulate restaurant tipping next? Is it even tipping at that point?

  7. Uber did set their business model and attracted many riders the world over in the process based upon a cashless experience (I.e., no tipping). Instead they had a rating system for everyone, riders and drivers alike.

    If they are going to introduce tipping, they had best eliminate the ratings of riders.

    No-tip blacklisting of riders will be the result, which is quite similar to racial profiling.

    I’d rather uber treat their drivers fairly and compensate them better.

  8. FUCK TIPPING! If lawmakers feel like the wages are too low, then introduce minimum wages, minimum fares, or get rid of contractor status. Tips are a horrible and stupid way to deal with the real problem of companies ripping off employees. I hope one day America can ban tipping forever.

  9. I abhor the concept of tipping and don’t see myself tipping Uber drivers for the various reasons mentioned in numerous other blogs in addition to this one. However, I’m worried about the ability to rate riders (by drivers) based on whether or not they tip. I will need assurance that drivers can only see whether a rider has tipped *after* they’ve rated them. Make it a condition of knowing if a tip was received. Better yet, have the tip go into some sort of escrow until the driver rates the rider. Once that’s complete, than any potential tip is released.

  10. Since neither uber nor lyft adjusts fee based on how many of my luggage the driver has to work with, I use lyft, because I can adjust tip amount on app. Same way, when driver goes out of his way to help me to find a place, sometimes even provides cold bottle water, I tip accordingly. Since tipping in app only works for lyft, I always use lyft unless town doesn’t have lyft.

  11. Uber is doomed. Tipping will be another nail in the coffin. Here’s another nail that I’ve been running into more often lately. I have a 4.82 rating, for whatever that is worth. Each of the last 4 times I’ve called for a black car, typically going to the airport which is a $55-$60 ride, using the app the estimated time for the car to arrive is 4-5 minutes. So I hit the submit and then within about 3 minutes I get a call from the driver whose position does not seem to be changing on the app and that goes about like this…

    Driver: “where are you going?”
    Me: “going to the airport, does that appear on the app that I’ve asked for a ride to the airport?”
    Driver: “Yes it does”
    Me: “OK, well that’s where I am going”
    Driver: “OK well I’ll be over to pick you up in about 5 minutes”

    This usually turns into more like 8 minutes but the considering that they don’t even start moving for 3 or 4 minutes, we are talking about a 10-12 minute wait rather than a 5 minute wait as indicated in the app. Between tipping, this secondary negotiation where the driver calls to decide if they want to take the gig that they’ve already accepted, and the longer waits – it’s become much easier to just take a taxi which is what I am doing whenever I can.

  12. Lucky, thanks so much for writing a very thoughtful piece. I used to drive UberX full time while between jobs, and continue to drive but very much part time (like one to two weekends a month) and you are right on target. In many markets the low cost UberX and UberPool are priced too low for drivers to make a living. Uber tried to keep down the surge by recruiting tons of new drivers to replace the ones that quit (like I did for 9 months at one point) as well as offering targeted incentives in select US and international markets.

    Where I know the rate is too low, I will often tip because I’ve been on both sides of the car. I also tip if I’m going the airport and the driver helps me with me with bags. I also tip if the car is very nice and or exceptionally clean. I do not tip on longer more expensive trips or where the vehicle is very old or dirty. I try to thread the needle and have a reasoned position on tipping.

  13. If we can avoid should you tip …

    I think in most cases uber X is really cheap, unless there’s surge pricing going on and if I want to tip, I have to do it in cash. I want to tip through the app, and I want it to be my choice. If I’m using a card that offers a bonus, extra category points, a discount or whatever with uber, that should also apply to the tip. If I have to dig in for cash, it’s easy to drop things in the car and I’m not getting any points for using cash.

  14. If you’re going to make legislation to ensure people get a decent income, you should do so to ensure they get a decent WAGE, not coerce the customers into making charitable donations to the staff so they can get by…

    I normally accept the argument that tipping is a necessary evil and by not doing it you’re only hurting the low paid (though I’d also argue that if everyone stopped then there would be an impetus to revamp the legislation – just like going on strike, short term pain and long term gain), but if we’re talking about legislative solutions then the only rational response is to ensure they’re paid fairly in the first place.

  15. Building on what Arlington Traveler said, it makes sense to tip if the driver helps you with bags/luggage and/or provides exceptional service. I wonder if [Uber] drivers will start rating those passengers better who tip?

  16. Tipping, to me, isn’t a big deal, as long as it is *easy*. I never tip Uber drivers, because theres no way to do so in the app, and I don’t want to deal with cash (and rarely carry any). Nor do I want the driver to know how much I’m tipping until I’m outside of the car.

    If they put the option in the app, then great.

  17. @Kelly Maybe Uber should aggregate tips so drivers can’t see the tips separated out by rider. Or at least, don’t reveal the tip given until a passenger rating is submitted. I agree, passenger blacklisting based on tip amount would be a bad idea.

  18. @Another Steve I live in a downtown metro area so never have that issue to the airport but from the airport all the time. My new rule is is they aren’t moving in 2 minutes, I cancel and if the same driver tries to pick up the ride again I do it again. Eventually they get the message.

  19. How AWFUL. I am now visit Japan, where tipping is immoral and insulting, and it’s so clear how bavk-asswards and corrupt tipping culture is.

    Not allowing tipping is the #1 benefit of Uber, to see this regulated away is so STUPID.

    As per you blogger please spend more time in Japan.

  20. Part of the problem is that the uber pricing model is based on the assumption of part-time drivers – it works great to help you cover the cost of the car you already have with a few hours of driving, but the rates don’t cover the full cost of operating a car and a full salary of the driver!
    A friend operates a transportation business and looked at the numbers. If you include the full cost, including depreciation of the car, maintenance, insurance, etc and make reasonable assumptions on revenue, the numbers won’t work out to pay a market competitive salary!
    So, before you give up your job, you have to do the proper due diligence and do the math of the business you are about to start – or your business will likely fail!
    Should uber be more transparent about that? I think they should. But it’s not their responsibility to stop people from making bad business decisions – as uber benefits from them! The responsibility is with the full-time drivers who get into a business they don’t fully understand, instead of taking a job as a taxi or bus driver, with more protection and less risk!

  21. Not entirely true that people will hate tipping because of the higher uber drivers. Rather, we’ll hate it simply because tipping is annoying.

    I don’t want to be told one price then have to later do my own mental calculations to arrive at the real price of the service. I don’t want to feel forced to do something that’s presented as optional. I’d rather the price simply increased and Uber paid the drivers well. In fact, I would prefer prices increased by more than my average tip, just to avoid the annoyance of feeling mandated to tip.

    As a commenter said previously, if you are legislating to make sure people get paid well then do it properly. That said, at least Uber drivers keep their cars clean, help with luggage and tend to be pretty nice because of the rating system. Yellow cab drivers expect a 20% tip after not helping with luggage, driving terribly and talking on the phone the entire ride in a dirty car.

  22. Absolutely agree with rfrn – UBER should rise their rates and make it an “all inclusive” rate, the rating of the driver should be the indicator for good or bad service. Otherwise it is just smoke & mirrors for UBER to claim that their people can make sufficient money to survive (as waiting staff in restaurants).

    I also assume that we won’t tip an autonomously-driving UBER, will we…?

  23. Luke Vader – One of the biggest travesties of tipping in America is that people believe it “makes sense”. It does not. Perhaps in the old days when it would be seen as socially acceptable to lord it over people by having them grovel for extra money, but not in the modern world (which granted, America isn’t really part of).

    Perhaps it’s because I wasn’t raised in this environment, but it reeks of servitude to me. Not that I think you want a slave, but the scenario you described to me (effectively “lift my bags out of the car for me, something I can do myself with ease, and I’ll give you some extra money”) makes me immediately think of such a relationship.

  24. @Jason
    Happens with Asians as well. But I don’t blame service staff for thinking that way, as Asians probably do statistically pay less in the same way African Americans do. There is no such thing as white privilege.

  25. I use a variety of services – Uber, Lyft, Juno, Via, and plain old yellow cabs. I usually tip in Lyft and yellow cabs because I understand that tipping is simply part of the model. With Uber, Juno and Via, I don’t. Juno and Via seem fair to drivers, but Uber has relentlessly driven driver earnings down, as we know. I’d like to tip in Uber occasionally, but I often don’t have small bills, and it is awkward to ask a driver for change when you are paying the fare in a cashless transaction.

    To AdamR – Uber drivers are already rating based on tips. In NYC, the average passenger rating is about a 4.6 because drivers are giving automatic 4s to anyone who doesn’t tip a dollar.

    Also, I am using yellow cabs more and more nowadays. With all the competition, cab drivers have improved their service. Cabs are often faster and easier now.

  26. @Zach — wait, so you’re saying that relative to white people, it’s not just blacks who get the shaft, it’s also Asians — and you proceed to assert white privilege is not real?

    Either your post is a non sequitur, or your argument directly contradicts your position, or you meant to say white privilege IS real (which of course it is).

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