Uber

Uber had the chance to do the right thing with tipping, but it failed

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Written by Kamil Arli

According to the NYTimes’s report, New York City moves to require Uber to provide a tipping option in its app.

Now officials are moving to require Uber to provide a tipping option in the app.

The city’s Taxi and Limousine Commission announced a proposal on Monday requiring car services that accept only credit cards to allow passengers to tip the driver using their card.

It is just one piece of a more comprehensive effort to improve the economic well-being of drivers

“This rule proposal will be an important first step to improve earning potential in the for-hire vehicle industry, but it is just one piece of a more comprehensive effort to improve the economic well-being of drivers,” Meera Joshi, the city’s taxi commissioner, said in a statement.

The decision was prompted by a petition from the Independent Drivers Guild, a group representing Uber drivers in New York. The petition, which collected more than 11,000 signatures, argued that drivers were losing thousands of dollars without an easy tipping option.

 There has long been confusion over whether it was expected

Passengers can tip an Uber driver using cash, but there has long been confusion over whether it was expected. Uber’s website says tipping is voluntary and that riders are not obligated to offer a cash tip.
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The lack of a tipping option in Uber’s app has been a sore point for drivers. If new rules are approved in New York, it would be a major change in how Uber runs its business in its largest United States market. Other cities could demand to have the same choice.

A spokeswoman for Uber, Alix Anfang, said the company would review the proposal.

“Uber is always striving to offer the best earning opportunity for drivers and we are constantly working to improve the driver experience,” Ms. Anfang said in a statement, noting that the company had worked with the drivers guild to make sure drivers had a voice.

Uber’s largest competitor in the United States, has long offered in-app tipping as an option for riders

Lyft, Uber’s largest competitor in the United States, has long offered in-app tipping as an option for riders. But Travis Kalanick, Uber’s chief executive, has been one of the largest impediments to adding tipping to the Uber app, according to two people familiar with his thinking who did not want to be identified publicly discussing the company’s internal discussions.

Mr. Kalanick believes the feature — which has already been built, but has yet to be deployed — could add “friction” to the in-app experience, and could potentially make Uber less appealing. It could also bring a sense of guilt to those who do not tip drivers. Some inside the company have lobbied Mr. Kalanick to change his stance, but he has long resisted.

New York’s proposal will be formally introduced by July and requires approval by the taxi commission’s board. Before that vote, drivers and passengers will have a chance to speak on the measure at a public hearing.

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16 million passengers used Uber and other ride-hailing services in October

In New York, about 16 million passengers used Uber and other ride-hailing services in October, soaring from about 5 million in June 2015, according to a recent study. But Uber has faced a series of scandals over its corporate culture, including allegations of sexual harassment, leading to a backlash among consumers.

In March, Lyft said its drivers had earned more than $200 million in tips nationwide since the company started allowing tips in 2012. Adrian Durbin, a spokesman for Lyft, said its tipping policy was a major reason drivers prefer Lyft over Uber.

“We’ve always known that offering in-app tipping is the right thing to do, which is why we’ve offered it since our earliest days,” Mr. Durbin said in a statement.

Allowing drivers to earn tips would help them make a decent living

James Conigliaro Jr., the founder of the Independent Drivers Guild, said that allowing drivers to earn tips would help them make a decent living after Uber had in recent years reduced driver rates in New York.

“It has become harder for drivers to make a living wage,” he said. “They have to work much harder and longer hours to earn the same amount of money they did when Uber came on the scene.”

Uber’s reaction to the proposal on Monday was muted compared to the company’s aggressive response when Mayor Bill de Blasio’s administration tried to cap the number of Uber vehicles, suggesting the company might not fight the new rules. After Uber ran an advertising campaign in 2015 attacking the mayor over the cap, Mr. de Blasio ultimately dropped the idea.

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This month, Uber won a major victory in Albany when state lawmakers approved new rules allowing Uber and other ride-hailing apps to expand to upstate New York. Uber could begin operating in cities like Buffalo and Syracuse as soon as July.

Some Uber users said the shift to tipping drivers in New York City was long overdue.

If the new tipping policy could turn away people who use Uber’s low-cost car-pooling feature

“This is something Uber should have been doing from the beginning,” said Hebah Khan, 22, a junior at Barnard College.

But Ms. Khan also wondered if the new tipping policy could turn away people who use Uber’s low-cost car-pooling feature. “They’re looking for a cheap luxury,” she said. “They’re probably not trying to tip.”

Olivia Kenwell, a 25-year-old bartender at Broadway Dive on the Upper West Side, said she usually tips Uber’s drivers if she is the only one in the car during a car-pooling trip.

“As a good-will gesture,” she said. “I might tip 5 dollars on my 2-dollar ride.”

But she admitted she had an ulterior motive as well: a good rating as an Uber passenger.

“I’m obsessed with my Uber rating,” she said. “It’s the only place in the world where you can find out exactly how well you’re liked.”

About the author

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Kamil Arli

Editor of DigitalReview.co. Digital Media Consultant

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