5 Questions To Ask Now That Uber Offers In-App Tipping
For years, there was no way for Uber passengers to leave a tip using the app — but that’s no longer the case. As part of Uber’s 180 days of change campaign, aimed at repairing the company's broken relationship with drivers, tipping is now available on the app in every Uber city in the United States and Canada.
One of the things passengers have always loved about Uber is that it’s a frictionless experience. You type in where you want to go, hit a button and a car shows up a few minutes later; when the ride’s over, you hop out and you’re done. You have the option to leave a rating at the end of the trip, but in my experience, only around half of passengers ever do.
Tipping a driver may seem like a big change, but all the company really did was add a tip option to the ratings screen. If you’re anti-tipping, you can just ignore that screen and if not, riders willing to tip now have the option to leave one via the app.
Tipping is prevalent in the US service industry; almost everyone leaves a tip when they go to a restaurant or takes a taxi but until recently, Uber was one of the few exceptions where tipping wasn’t customary. As a driver, my passengers would sometimes hand over a cash tip of $5 or a few dollars here and there, but most passengers either thought the tip was included in the fare — it never was — there was no need to tip or they wanted to tip, but didn’t have cash on them.
Now that tipping is part of the Uber app, here are five questions you may be asking:
1. Why Should Anyone Tip on Uber?
No one has to tip on Uber, but I think if passengers understand the dynamics of what it’s like to be a driver, they may be more inclined to leave a tip. Uber has consistently cut rates over the past few years and while passengers have probably noticed that it’s cheaper than ever to take a ride, drivers are earning less.
In early 2017, we surveyed more than 1,100 drivers and they reported earning around $16–$18 per hour before expenses. While that number can vary depending on when and where you are, driver pay is a lot closer to that of the typical service job than people realize. And as the pay rate has come down, the potential for tips has become more important. It might seem like the simplest solution would be for Uber to raise the wages they pay their drivers — as entrepreneurs in other industries have experimented with) — but right now, the company is highly unprofitable as a business and in 2016, it actually lost $3 billion. Since drivers are its biggest expense, I can’t imagine it will pay drivers more as it tries to shift toward profitability.
2. Will My Tipping Behavior Affect My Rating?
Uber drivers are forced to leave a rating for the passenger as soon as a trip is over; in fact, you can’t go back online until you do so. This means drivers won’t see whether you left a tip or not until after they leave you a rating. That said, drivers can submit a request to Uber to change a rider's rating. Most drivers aren’t going to take it personally if you don’t leave a tip, but there were definitely rides in the past where I went above and beyond for a passenger — helped them load luggage or waited for their party for five minutes — and never even got a thank you. I don't change a rider's rating very often, but I’d definitely be tempted to if that situation came up again and I didn’t receive a tip.
3. Should I Tip on Every Ride?
Even though I’m a driver, I don’t expect passengers to leave a tip on every single ride. Uber has cultivated a generation of riders who are used to not tipping — and that isn’t going to change overnight. But I do think it’s a good idea to leave a tip for the drivers who are good at what they do. Being an Uber driver isn’t rocket science, but it does take some skill to navigate a city’s roads effectively, drive safely and interact with customers. Some drivers spend a lot of time studying blogs like mine and taking rides as a passenger to better understand the customer experience, so if you get a driver who's clearly good at what he or she does, a tip can go a long way to say thanks.
4. What Is a Standard Amount to Tip?
There are no set guidelines here, but I think a $1 or $2 on a short ride and 15-20% on longer rides is reasonable. On shorter rides, tips can be especially beneficial to drivers since Uber takes a larger cut from these fares. For example, in Los Angeles, where passengers pay $5.60 for a minimum fare, Uber takes a $2.10 booking fee off the top and then 25% of the remaining fare. So on any ride under three miles or so, drivers only make $2.63 and Uber makes $2.97. The bottom line? A $1 or $2 tip on a short trip could easily mean a 50-75% boost in pay for the driver.
5. Is It Better to Use Cash or Tip Within the App?
Uber is meant to be a cashless experience, so it doesn’t make much sense to me to leave a cash tip, especially since there’s now a way to tip in the app. While some drivers may prefer cash over digital tips because it won’t show up on a 1099 — even though it’s the law to report all income including cash tips! — tipping within the app is definitely best practice.
Harry Campbell is a former Boeing aerospace engineer and founder of TheRideshareGuy.com, a blog for rideshare drivers. Harry has been driving for Uber and Lyft since 2014 and his site reaches hundreds of thousands of drivers every month.