Uber CEO Says You Can Improve Rating By Tipping More

It’s interesting to see how Uber has evolved over the years. When Uber was first introduced, the whole selling point of the platform was that it was a cashless system, and tips were expressly discouraged. This was in stark contrast to the taxi industry.

However, over the years they’ve evolved, especially as dissatisfaction has grown among drivers. Uber has a new CEO, and the company has pledged all kinds of positive changes to help drivers make more money, including the introduction of in-app tipping, which we saw rolled out in the summer of 2017.

When tipping was first introduced, Uber made it clear that this was entirely discretionary. There was no expectation of tipping, and based on the comments most of you left, it’s clear that a majority of people didn’t intent to tip through the app.

It’s interesting to see just how far Uber has come in that regard. During a CNBC interview in Davos, Uber’s new CEO, Dara Khosrowshahi, was asked about how passengers can improve their Uber rating. He explained that he’s an aggressive tipper, and suggests this is a way to improve your rating:

“You should tip more,” Khosrowshahi said. “I am a very aggressive tipper right now. I pick the highest tip every time. Somehow my rating is getting better. I’m not sure if it’s aggressive tipping. Everybody, tip aggressively.”

A good rating has its benefits, since you’re more likely to get a driver with a high score, too.

“When you get a 4.8 or 4.9 rated driver, know that that driver has passed an array of background checks and has a history,” Khosrowshahi said. “That’s more information than you have if you hail a cab in New York City.”

He basically suggests that the more you tip the better your rating, and the better your rating the better the chance that you’re linked to a good driver. The irony in this statement is that Uber drivers don’t see if passengers have tipped until after they rate you, so clearly this is false. Also, when the CEO of a company says “I have a good Uber rating and I tip a lot,” that seems like a false correlation to me.

I can appreciate that Uber’s CEO wants to maximize the money that drivers on the platform are making, though I find that dispensing incorrect information to encourage people to tip is pretty low (and I say that as someone who is usually accused of being too pro-tipping).

What do you make of the Uber CEO’s statement?

(Tip of the hat to View from the Wing)

Comments

  1. Uber CEO: “you should tip more”

    Me: “You should charge a fare that will compensate drivers appropriately for their work without passive-aggressive begging from me to perpetuate a fucking stupid and racist system of ‘customary‘ tipping”

  2. “When you get a 4.8 or 4.9 rated driver, know that that driver has passed an array of background checks and has a history” just the same as any other taxi or minicab driver in the UK, so he clearly doesn’t know how licencing works in (at least) one of his markets, as well as how tipping influences ratings in his own app.

    Comments like his & the experience I’m having with Uber where I live is pushing more back to the local suppliers.

  3. What do I as a passenger care what my rating is ?
    And I don’t pay much attention to the driver’s either.
    I use Lyft much more than Uber nowadays, and I only tip for extra assistance.

    Uber still in trouble.

  4. How does this even work from a practical standpoint? A lot of times when I complete a ride, I don’t rate and tip the driver until the next time I open the Uber app, which could be the next day or a few days later. I was under the impression that the driver rates me at the conclusion of my ride. So how would a driver know to rate the passenger higher? Would he/she just sit there for a while and see if a tip comes in?

  5. I liked not having to think about tipping with Uber but when you boil it down, Uber drivers are getting paid far less than minimum wage. As a result, i’ve found service has declined over the years.

    Last Saturday night I took an Uber in suburban New Jersey. We drove ~20 minutes and the fare was $14. Ok, $14 per 20 minutes is $42/hour which sounds great. His cut may have been $12 so thats $36

    Of course then you figure, he drove 7 minutes to get to me, he was waiting a few minutes without a pax before I requested him, and will wait a few minutes or more to get his next passenger. So maybe it’s $12 every hour

    Of course he then put 20 miles on his car, paid for gas, pays his phone bill, insurance etc… and now he made only $3-4 an hour for driving me around.

    So yes, I dont like our tipping culture, but i was happy to tip $5 in cash on my way out the door. Still much easier and cheaper than a taxi.

  6. Seeing the way things have evolved, both with the tipping that is the focus of this article, the types of drivers that Uber is attracting now, the types of cars they are using, and the standards of service, I think we are quickly closing the gap between the traditional taxi services. The only difference being the payment method, instead of paying the driver, usually in cash, you have an account on the app. It really has nothing to do with municipalities enacting regulations that protect traditional taxi companies. In the beginning, Uber was considered a step up. Now they are no better than many of the taxi services that had previously existed. As far as the tipping goes, like the airlines, Uber is employing a strategy of minimizing the base price to attract the rider and then the tip is an expected add on fee. I suspect we will start seeing more. We already have surge pricing, booking fees, etc. So in the end, we will end up with nothing more than a glorified taxi service that happens to use an app where you can use the same pay method in any location. Whether or not this affects their growth, we shall see. We have already reached the point where the bloom has wore off the flower on both sides of the transaction.

  7. I tip cash only, not in the App and since we got Uber just recently (within the last year) in our village here in Mexico I tip VERY well because I want Uber to stick around. So that’s probably why I have a 5 star rating. It’s so cheap here that it’s worth it to me.

  8. I never tip drivers unless I have baggages or the road condition is really bad.

    Last time I took a ride with Uber in NYC and the driver rated me 1-star immediately after the ride completed. We had no issue during the ride and I believe I behaved properly. WTF is that?

    So now when a ride completes, I wait for the driver rates me first so I could know how many stars s/he gives me and I’ll tip according to that.

    Also, I use Lyft more now.

  9. Soon Uber will be history. Blockchain technology will come into place for the ride share drivers without a corporate raider sucking up all the profits from those doing the actually work. Same goes for insurance and other services. Just wait and see. It’s coming.

  10. nope. this is why trump is the president. capitalism works. if you aren’t satisfied with your pay, get another job.

  11. Uber suspended my account for no reason. I recalled no bad behaviour so I asked for an explanation. They said I violated their Terms and Conditions but cannot disclose which one because apparently it is their policies. Unbelievable.

  12. When I drive for Uber, I never expect tips. As I figure, I’m better off than 90% of my riders anyways.
    When I ride with Uber, I always tip. As I figure, I’m better off than 90% of the drivers.
    Short of someone actually yelling at me or being very disrespectful, I see no reason to refrain.

  13. I’m beginning to think the best way to improve my rating is to stick with boring domestic travel in the U.S. I have a gut feeling that five star rating inflation is much higher here than abroad.

  14. Does anybody know if Uber takes a percentage of the driver’s tip? I don’t personally use Uber so I have no idea if this is true of not.

  15. @ Phil Mitchell — Nope, I think drivers get all of their tips. However, presumably the hope for Uber is that more people tip, and then Uber can take more of a percentage of the ride revenue if drivers are earning more.

  16. So the app matched drivers with a high rating to passengers with a high rating? I don’t mind tipping but the process would appear to create two charges, one for the trip and one for the tip.

  17. Uber has lost its direction, and its philosophy.

    CEO now wants you to tip generously, or they do not deliver service?

    Or is he saying that in order to look handsome or pretty in Uber app, you have to throw money around all the time?

    That is putting me off Uber. What is the difference between Uber and Taxis now then?

    Why should we be taking Uber, when we get judged even before we step into the car, since how good you look on Uber, is based on how much money you are willing to splash out as tips?

  18. I don’t know if it was a lie or just intentionally misleading ( the Uber driver not see the tip until after they rate you but your tip influences the rating) but it’s a horrible way for a new CEO for a company with a sullied reputation to start.

  19. To me, this reeks of 3 things:

    1. The CEO wants to make himself look good by saying he’s a good tipper and that he selects the highest tip amount every time (which is pretty easy to do when you’re a one percenter, I might add).

    2. This is his way of getting Uber customers to subsidize the driver’s salary, rather than Uber actually having to pay higher wages.

    3. He is preying on those customers who don’t know that driver’s rate passengers BEFORE a tip is added.

  20. Figure out the following:
    1. How much would the trip cost via a taxi?
    2. How much did it cost via Uber?
    3. How was the Uber driver/car compared to a taxi?

    If everything is tilted towards Uber then tip a few dollars such that you save some money but the driver also makes a few bucks and everyone wins.

    Do you really think going back to a taxi only system is a good idea? The conditions of the taxis and the poor behavior of the taxi drivers (especially in places like Vegas where they constantly want to take long routes) generally makes Uber and the competition a much preferred alternative. Obviously not 100% of the time.

    And for the people against tipping, don’t use services that expect tips. Most restaurants tell their servers they will make $3 (or some small #) + tips. No restaurant is under obligation to serve non-tipping customers. And if a server or driver is bad, let management know. I’ve had one issue where I wrote a complaint and the female was fired. She had several issues and I’m not sure if mine was the final complaint but she shouldn’t have been in the service industry.

    I agree there are a few too many places with things like tipping jars but most non-fast food restaurants, taxis and a few other places you know what the situation is in terms of tipping.

  21. Clearly the move is to pass a soft increase in tariff to make up for the low fares / high fees Uber is paying / charging to the drivers. I tipically disagree with tips being a significant part of any bill, because this is misleading for the client and risky for the driver (or any other profession exposed to this, waiters, guides etc.). I know of very few companies that let their clients pay a discretionary price depending on their level of satisfaction, simply because it is not a business model. Work deserves a salary and customers want price transparency. And for those customers willing to donate generously ater a good meal, there are plenty of NGOs and charities 😀

  22. Easy way to fix it – don’t show the driver the tip until he’s rated the rider – that way the tip doesn’t influence the rating (which it shouldn’t).

  23. @speedski- that’s already how the system works, as Lucky noted in his article. Thats why what the CEO said is a farce.

  24. Can’t wait to drive my rating below zero. I will never tip a Uber driver for them doing their job.

  25. Ho w do Uber drivers rate passengers anyway? If the passenger is polite and undemanding, was waiting where they said they would, doesn’t mess up the cab or expect a bunch of bags to be lifted into the car, why wouldn’t they be rated a 5?

  26. I imagine a lot of people here would not buy products associated with slave labour but are happy taking advantage of taxi drivers on low wages.

    We need to find a happy medium, whereby Uber and the like are cheaper than regular taxis but drivers make a proper living.

    It’s not up to customers to make up drivers ages but Uber was designed to appeal to the cheap Charlie breed

  27. @Santastico – Do you tip your waiter/waitress? Hotel housekeeping? I find it hard to believe you’d walk out of a restaurant without paying a tip. Yet those folks are “doing their job” just the same.

  28. @dca: not sure what do you do for living but nobody tips me. Do you tip the guys that checks you out at the supermarket? Do you tip the bus driver? Do you tip the pilot or FA at the end of a flight? I do tip at a restaurant because that became a too strong thing and it looks weird if you don’t but the tip culture in the US got out of control.

  29. I’m still not going to tip because tipping is so utterly stupid that it’s a huge shame that we’re going backwards on this. Progress is not always made by moving solely in one direction I guess. Please do everyone else a favor and don’t spread this terrible disease.

  30. One of the founding principles of Uber was to have a cashless transaction, immaculate cars, combined with prompt, pleasant drivers driving sanely. However, during the past year my experience is increasingly more disappointing… drivers complain about what Uber pays them, cars not clean, expectation that I should put my luggage (70+ female) into/out of the vehicle myself, etc — drivers who have no clue where they are going. The number of requests being picked up but drivers never showing up has risen. I feel as though I’m back in the “taxi world” again.

  31. I definitely have tipped in the past when I was content with the Uber driver’s performance.
    But if the only incentive is to get a higher rating and then get matched with a driver with a higher rating (which sounds bogus), I couldn’t care less. Drivers with a very high rating were usually the most disappointing in my experience: never helped with luggage, never talked, or had terrible navigation skills despite using phone GPS.

  32. DO NOT TIP UBER DRIVERS.

    The reality is Uber cut the % they paid drivers over the past few years. Now they added tipping to make up for it. Guess what is next? When Uber figures out how much the drivers are making in tips, expect them to cut the percent to drivers again.

    Uber drivers should continue to organize and then stop driving en masse on random days. Force reforms at Uber, lest you be part of the problem rather than the solution.

    DO NOT TIP UBER DRIVERS.

  33. LOL…..I am sure this CEO has a company paid Uber account as part of his compensation so why wouldn’t he tip large. It’s not coming out of his pocket.

  34. Very cool. Suckers like you (what do you expect when you overtip everywhere?) will make my future rides even cheaper, as Uber keeps reducing pay to make up for the income coming from tippers.

    Awesome.

  35. Richard, the app doesn’t literally match high rating drivers with passengers.

    However, what happens is the driver sees the rating of the passenger when the job appears. The implication is that some high rating drivers don’t like low rated passengers so decline (which is true). However, you can also still appear for mid-rated drivers so having a high passenger rating doesn’t mean you will be matched with a high rated driver – just you wouldn’t be refused.

    So really the CEO is just trying to get people to tip more. Which helps with driver satisfaction, which they’ve been trying to work on. Not least after Uber took a bigger cut from driver’s income via increased commission.

  36. Tipping is a ludicrous system. Uber CEO is either poorly informed or has ulterior motives. No way I’ll start tipping – it’s not like Uber is that cheap anyway, surge pricing is often in effect and if it wasn’t for the no tipping element it’d be more expensive than a black cab sometimes! 3x value with Tesco Clubcard vouchers is the main reason I continue to use them!

  37. tipping is ridiculous, i dont do it except for maybe $1-2 dollars at the restaurant.

    it’s your job, you signed up for it, you get paid what you get paid. if people choose to tip you, great, if not, too bad.

  38. I am happy to tip for great service. However, the last 5 times I have attempted to tip Uber drivers, it hasn’t worked. Sometimes a tip goes through, and sometimes it doesn’t. So, it seems odd that riders are penalized for not tipping given the circumstances.

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