To tip, or not to tip. That is the question Uber and Lyft customers are facing these days.
Uber’s insistence on not including in-app tipping is frustrating drivers, complicating the future for America’s largest ride-sharing service.
From the San Francisco-based company’s inception in 2009, Uber has marketed its ride experience as a quick and convenient mobile phone transaction. And the company said drivers weren’t expecting tips because Uber paid them enough without the need for gratuities.
The no-tip policy resonated with riders and drivers alike.
But that was then, this is now. And things have changed.
While Uber once claimed on their website that tips are included in the fare, now the company says Uber still maintains that tipping is not necessary while also saying riders are free to tip drivers in cash.
In a company blog post, Uber said: “Tipping is not included, nor is it expected or required” but “riders are free to offer tips and drivers are welcome to accept them.”
The switch comes after two developments: a lawsuit by drivers and competition from Lyft, a ride-sharing company that has offered in-app tipping since its launch in 2012.
In April, Uber agreed to pay $100 million to drivers in California and Massachusetts in a settlement over drivers wishing to be reclassified as employees instead of independent contractors. Although Uber drivers are still considered independent contractors, the lawsuit brought about a change in the company’s tipping policy.
The new policy disrupts Uber’s simplicity for riders, which could put it at a competitive disadvantage with the easier-to-tip Lyft. But the tug-of-war to attract the best drivers may require that Uber continue to allow tipping, and maybe find ways to make it easier.
“I have Uber and Lyft, and I currently use Lyft because it seems cheaper, which makes me more likely to tip my driver,” says Jeff Michael, a 26-year-old resident of the District of Columbia. “It’s pretty easy to do, you just press $1, $2, $5 or other.”
Harry Campbell, a driver for Lyft and Uber, writes about the two companies in his blog, therideshareguy.com. Campbell also prefers driving for Lyft because he says it’s “nicer to their drivers.”
“I think it’s unfortunate that a company with so much money and so much notoriety treats its drivers so poorly,” Campbell wrote of Uber in a blog post. “With the Lyft app, passengers have the option to add a tip to your fare. Uber doesn’t offer that option.”
According to Lyft spokesman Tim Rathschmidt, a spokesman for Lyft, “passengers have given more than $100 million in tips to drivers.”
In Uber’s company blog post, it the company said it “felt it would be better for riders and drivers to know for sure what they would pay or earn on each trip without the uncertainty of tipping.”
Uber also acknowledged that competition from Lyft and other firms that offer an in-app tipping option “means that we have to demonstrate Uber offers more stable, reliable opportunities to earn money than the alternatives. And that’s what we are focused on: ensuring that Uber is the best experience for drivers across the world.”
A New York group called the Independent Drivers Guild recently started a petition to get Uber to include in-app tipping, which had 5,572 signatures signatures as of this publication.
“Uber is the only major transportation network company that has been unwilling to offer passengers an easy option to tip,” the petition reads. “As a result, the people working for Uber are losing thousands of dollars, every day, that we need to feed our families.”
In an experiment to test Uber’s new tipping policy, Christian Perea, who drives for both Lyft and Uber, put a sign in his car saying Uber riders could tip in cash. He received two tips from 15 trips, it did not affect his driver rating and passengers didn’t mind the sign.
“I thought I would receive at least a few bad ratings or perhaps some mean comments, but I didn’t,” Perea wrote on Campbell’s blog. “However, one of the things I found out was now that I was seeking tips I dressed nicer, kept the car clean, and generally provided better service. In the past I knew I would never get any Uber tips, so I did not try. I only did the minimum for decent ratings.”
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