So imagine you're wrapping up a night out.
You're ready to head home, but driving isn't an option,
and you don't want to wait for public transit.
So you use your phone and you fire up Uber, or Lyft, or whatever ride-hailing app floats your boat.
20 minutes later you're faced with this screen. Do you tip your driver or not?
No.
Sometimes.
...Sometimes.
I can't tell you the last time I tipped an Uber or Lyft.
Sometimes I'll do it. Sometimes I won't.
I should tip.
I tip every single ride.
Wow. Aren't we just like, much better than me.
So riders are all over the place with how they're tipping.
Turns out, only about 35% of riders tip consistently.
When I talk to drivers, tipping is definitely a big deal for them.
It's something that's on their minds, and it can make or break a ride for them.
This is Shirin Ghaffary.
I write about tech and labor.
App-based drivers and cab drivers perform a very similar service.
But riders in the US pretty consistently agree:
cab drivers should be tipped.
I would never walk out of a cab without tipping the driver.
I instinctively tip the cab driver.
So what's going on here?
Why is there so much confusion
around whether you should tip on apps like Uber or Lyft?
This split, between how riders tip cab drivers versus app-based drivers,
can be traced back to the origins of Uber:
the company that made smartphone ride-hailing a thing in the first place.
Uber definitely wasn't the first ride-hailing app, but it was the one that scaled the most quickly,
and became a household name the most quickly.
By 2015, Uber accounted for over 90% of all app-based rides.
Uber set the standard in terms of what's the right driver-rider courtesy.
And for years, Uber set the standard that what's right is not tipping your driver.
From the moment Uber entered the market in 2009, there wasn't even an option to tip in the app.
Over the next few years, the company told curious customers over Twitter that a
20% tip was already built in to the fare and that there was no need for riders to tip.
Uber also told riders that its drivers take home the majority of the fare.
I thought that Uber and Lyft were just like showering their drivers with
money so that you didn't have to tip. I've always thought that the tip was
built into the cost.
Uber's messaging around tipping had a huge impact.
Even as other ride-hailing apps joined the market with tipping
built right into the app, riders still saw these services as something that
didn't require a tip.
Still, for a time, even though app-based drivers weren't
making much in tips, their pay was pretty good and more importantly, stable.
This chart shows what app-based drivers made between 2012 and 2014.
Even though it goes up and down, it basically hovers around $1500 a month.
But that didn't last.
As the ride-hailing market got more crowded, Uber and its
competitors started to lower their fares to stay competitive.
There's been many reports that Uber drivers' pay has been going down over the years.
Uber's saying that its commission is 25% but there are some reports showing that it actually
may be as high as 40 percent. And in some cases, they're actually lowering
the rate that they give drivers per mile.
After 2014, app-based driver's pay dropped dramatically.
And by 2018, drivers were making nearly half what they were making just six years before.
You started to hear drivers get more and more disgruntled.
You saw this sort of community form of drivers who felt like
these companies may be ripping them off or not giving them their fair share
and the lack of tip became a real problem because the amount of money that Uber
drivers were getting was comparable to how much to be getting in a cab
where most people would tip.
To make matters worse for drivers, the reasons Uber had given
for not including tipping in its app, those turned out to be not entirely true.
Uber had said that tipping is included in our bill. That was sort of debunked
and actually some people ended up suing Uber over that claim in part
and they ended up settling.
Finally, drivers' dissatisfaction reached a turning point.
In 2017, Uber's then-CEO Travis Kalanick gets in an Uber and as he's leaving the driver brings up
driver pay to Travis.
And Travis sort of starts to blame the driver.
Definitely it was an inflection point because it made the company look like it didn't care about its drivers.
And I think when you have that hand-in-hand with this no tipping policy, it was not a good look for Uber.
Several months after this video, Uber finally added a tipping option to to its app.
But that wasn't enough to change the pervasive no-tip culture
the company had already built.
I always tip cab drivers but I don't always tip Uber drivers.
I didn't know people tipped.
Really? I thought everyone tipped.
So should you tip your Uber driver?
Well, that's still up to you.
But just keep in mind,
just like cab drivers, app-based drivers do not automatically get tipped.
And if you tip in a cab, you should probably be doing the same for app-based rides.
Reconsidering how we tip isn't going to fix the larger problems
with the ride-hailing industry, but it's still a good thing to do.
I will say that the gig economy is tough. It's a tough gig.
So, anything you can do to reward people for good work, I think, is nice.