Do you tip your Uber driver? Uber has always prided itself on being a cashless experience, arguing since its inception that driver tips are only optional — and maybe even unnecessary. Even as its main rival Lyft bragged about the millions of dollars its drivers were collecting in tips, Uber stood steadfast against a growing number of drivers clamoring for tips. Until today.
The embattled ride-hail company announced Tuesday that tipping was finally coming to the Uber app. Starting today, tipping will be available in three cities: Seattle, Minneapolis, and Houston. After the company’s product team works out all the kinks, the option will be rolled out nationwide by the end of July.
So how will it work? Drivers who want to receive tips need only download the latest version of the drivers app, and then tap “receive tips” when prompted. Riders will be asked whether they would like to leave a tip when rating their driver at the end of a trip. They can either choose the pre-determined amounts of $1, $3, or $5, or select a custom amount. And if the desire to tip only comes much later after the trip has ended, fear not: Uber is allowing riders the option to tip up to 30 days later.
This is a remarkable turnaround for Uber, which has been struggling in the face of multiple scandals that recently culminated in a temporary leave of absence by the company’s CEO Travis Kalanick. There were reports of rampant sexism, allegations of mishandling a rape victim’s medical records, and a lawsuit from a Google spinoff concerning the theft of self-driving secrets. In short, Uber was having quite possibly the worst year that it could have. It needed to do something drastic, and that’s why there’s suddenly a tipping option.
“Today’s tipping announcement is an important win for drivers and proves that thousands of drivers coming together with one voice can make big changes,” said Jim Conigliaro Jr, founder of the Independent Drivers Guild, in a statement. “Cuts to driver pay across the ride-hail industry have made tipping income more important than ever. We were proud to lead the way on this fight on behalf of drivers in New York City and across the nation. This is an important first step toward a more fair ride-hail industry.”
Uber says the sudden decision to include tipping is part of its “180 days of change,” which seems to be some sort of PR campaign to repair the company’s bloodied image with its primary constituency: its drivers. “You told us what you want and it’s time we step up and give you the driving experience you deserve, because simply put, Uber wouldn’t exist without you,” the company states on its website.
I’ve long argued that Uber should do right by its drivers and include tipping. But there’s no question this is going to piss off a significant segment of its riders. A lot of people, millennials especially, liked Uber because it eliminated all the ambiguity in financial transactions. The idea of a cashless transaction was paramount to Uber’s business model.
Moreover, Uber sought to undermine the very notion of tipping. Uber published a post on Medium in April 2016 that went into greater detail about the company's position on tipping. "Whether consciously or unconsciously, we tend to tip certain types of people better than others," Uber says. "This means two people providing the same level of service get paid different amounts. With Uber, drivers know that they earn the same for doing the same trip, no matter who they are or where they’re from."
The company cited a 2008 Cornell University study found that "consumers of both races discriminate against black service providers by tipping them less than white service providers." But the study predated the gig economy by several years. And now Uber has trained consumers to leave their cash at home, and that stars, not dollars, translate into better service.
Meanwhile, Lyft allows riders to tip, as do other taxi and car service apps, and we haven’t seen any evidence that it’s led to rampant racism. Lyft started offering in-app tipping in 2012, and the company says its drivers have pulled in $250 million in tips since. [Update June 2oth, 2:42 pm ET] “This is fantastic news for drivers. Lyft is closing in on 1800 days of in-app tipping,” a Lyft spokesperson said, in response to the news about Uber.
Adding a tipping option won’t make Uber’s problems disappear overnight, but it may go a long way toward improving relations with some drivers. I’ve long argued that adding a tipping option is quite literally the least that Uber could do to shore up its image problems — of which it has many. Then the New York City Taxi and Limousine Commission said it was considering enacting a new rule that would require car service companies like Uber to offer a way to tip that was commensurate with the method of payment. Which begs the question: is Uber’s sudden discovery of goodwill toward its drivers actually just a move to preempt regulations that would require it to add a tipping option anyway?