There’s no need to tip.
Uber has been saying it for years. And the car-hailing app was embraced, in part, because of it. It’s all-inclusive and cashless; one fare and one email receipt, automatically charged to your credit card after rolling up to your destination. There’s no riffling through your wallet for small bills, no idling at the curb to deal with a credit card.
But in recent weeks Uber has begun allowing drivers in two states — California and Massachusetts — to post signs in their cars that say tips are appreciated. Is this just the beginning of Uber tipping? And what does it mean for travelers?
Two class-action lawsuits have led to policy changes throughout California and Massachusetts, where lawyers argued that Uber drivers should be classified as employees, not independent contractors, so that they can enjoy certain protections. A settlement was reached last month that allows Uber to continue categorizing drivers as independent contractors. However, in turn, Uber is making concessions, including clarifying its messaging regarding tipping.
Shannon Liss-Riordan, the class action employment lawyer who represented the drivers in California and Massachusetts, said in a statement that Uber would make clear to riders that tips are not included in its fares and that “drivers will be permitted to put small signs in their cars stating that ‘tips are not included, they are not required, but they would be appreciated.’”
Uber drivers have said that the company prevented them from accepting tips and led riders to believe — through statements on its website like, “Please thank your driver, but the tip is already included” and “there is no need to tip” — that tips are included in the price of a ride “when in fact tips are not included.”
So where does this leave you, dear rider?
In a recent blog post from its public policy team, Uber said that its creators considered building a tipping option into the app but ultimately decided against it “because we 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 said that’s still the case: “Tipping is not included, nor is it expected or required. In fact riders tell us that one of the things they like most about Uber is that it’s hassle-free. And that’s how we intend to keep it.”
Besides, Uber argues, not tipping offers other benefits for both drivers and riders. It cited two articles by the Cornell University School of Hotel Administration, one suggesting that the “connection between service quality and tip sizes is tenuous at best,” and another that found there may be a “race effect on tipping” which, as Uber put it, “means two people providing the same level of service get paid different amounts.”
Uber has also said that tipping might prompt drivers to spend more time picking up riders in wealthy neighborhoods, where tips are likely to be higher, therefore failing to serve an entire city.
No pressure to tip then, right?
Not so fast. Here’s where things get confusing. “Riders,” Uber continues, “are free to offer tips and drivers are welcome to accept them.”
In other words, Uber is telling passengers that there is no need to tip (the uberTAXI option, which allows riders to request licensed yellow cabs in cities such as Boston, is an exception). Further, Uber does not have a tipping option on its app, unlike competitors like Lyft, which allows riders to add a gratuity through their smartphones. And yet, Uber is saying that riders should feel free to tip. It is also allowing its drivers to make it clear to passengers that they would welcome a tip.
Suddenly that seamless Uber service has entered the murky realm of when and how much to tip, a realm that many travelers would just as soon avoid as they try to navigate themselves through new places. A Harvard Business Review article called it a “’Don’t, but you probably should’ tipping policy”— and a mistake.
One reason for that, writes Rafi Mohammed, a pricing strategy consultant, is that it could hurt riders. After all, they are rated by Uber drivers. Customers with low ratings are less likely to be picked up when they request a ride.
“In Uber’s case, drivers will know whether and how much you tip before they rate you,” Mohammed said. “As a result, tipping is now a Tony Soprano-like veiled threat: ‘Pay up or I’ll give you a poor rating.’” (He points out that drivers for Lyft, in contrast, rate passengers before knowing whether they tipped.)
Acknowledging that it’s unlikely Uber will forbid tipping, he suggests that the company adopt Lyft’s model, which allows riders to tip within the app (now putting Uber at a competitive disadvantage, he said).
So what’s a traveler to do? Start carrying cash for Uber tips? Budget for more expensive rides? And if you’re traveling on business, do you ask for a second receipt just for the tip (since the Uber receipt for the trip itself is automatically pinged to your email inbox)?
I used Uber three times in San Francisco and Berkeley in recent days and none of my drivers asked for tips or had signs in their cars. It was the usual seamless experience. But what if there had been a sign?
An opinion column in Bloomberg View this month suggests Uber riders skip the tip. When the writer, Virginia Postrel, took an Uber to Los Angeles International Airport, she said she saw a handwritten sign on the back of the passenger seat: “Tips — Appreciated — Thank You.”
“Although my driver was fine and I’m generally a good tipper, I resisted the instinct to comply,” she wrote. “He got a five-star rating but nothing further — not because I’d begrudge him the extra money, but because the only way to preserve the frictionless Uber experience is to defy the social pressure to tip.”
Uber is not the only company that has told riders that tipping is unnecessary. In New York City and Chicago some residents have been pleasantly surprised by the affordability of the ride-sharing app Via, which has the tagline “ride for the price of a latte.” In New York, it can be even cheaper. Weekday rides from 6 a.m. to 9 p.m.in Manhattan south of 110th street are $5 plus tax; and $5.95 plus tax from 9 p.m. to midnight and on Saturdays. When you search for the tipping policy, you find this (which has some of the same language as Uber): “One of the things that makes Via special is the all-inclusive fare. We never want you to pay more than that fare for a ride, so although our drivers are the best in the biz, a tip is neither required nor expected.”
But Uber, which is in more than 440 cities, is a behemoth compared with Via.
For travelers who wish to tip, there are, of course, other ride-hailing options, like Lyft and Gett, that allow gratuities to be added through their apps. And Uber has acknowledged as much on its blog: “That competitive pressure 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.”
How riders will feel, however, remains to be seen.
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