Uber Customers, Prepare for Tipping

No cash, no tip, no hassle… When you arrive at your destination, just hop out—we’ll automatically charge the credit card on file. And there’s no need to tip.

That’s front and center on Uber’s website. And it pretty neatly sums up the company’s value proposition, which has captured the hearts and minds of millions of customers worldwide and made Uber the undisputed market leader in the rideshare space. But that promise is about to get tweaked, in a way that will leave many Uber riders confused and unsettled.

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No More ‘No Need to Tip’

Last week, Uber reached a settlement in two class-action lawsuits with its drivers that will allow the company to continue treating its workers as independent contractors, a key component of its gig-economy business model. The agreement, reached out of court, also established policies and procedures for disciplining drivers, and created driver associations to represent workers in discussions with management.

Less covered, but of perhaps greater impact to Uber’s prospects for growth, is the company’s agreement to notify riders that tips are not included in the fare, and to allow drivers to solicit tips, verbally or with signs in their cars.

Uber, in short, is no longer a “no need to tip” service.

But because it always was a no-tipping service, it will continue to be perceived as such by many customers who remain unaware of the policy change. Of those who are aware, many (most?) will be reluctant to tip, as the extra expense amounts to a significant price hike. And then there’s the Uber app, which doesn’t accommodate tipping, forcing would-be tippers to have cash ready at hand.

Tipping, at a time when the practice is widely reviled and being phased out? Cash, when the trend toward a cashless economy is clear and irreversible? Uber, for all its aspirations to be a new-economy innovator, is turning back the clock.

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Killing Tipping, Saving Uber

I’m an occasional Uber customer, not least because I like the simplicity of the process. Not tipping is key to that simplicity.

I also believe that tipping is at best a morally sketchy practice. Workers should be paid a reliable living wage, without having their ability to make rent dependent on the whims or generosity of customers.

For both those reasons, I want Uber to remain a tip-free business. If that means raising fares somewhat, to make driving for Uber economically viable, I’m OK with that. But Uber must do its part, too, by reducing the cut it takes of drivers’ earnings.

Otherwise, I for one will be giving Lyft a try. Although Lyft encourages tipping—which is a strike against the company—it at least allows riders to add a tip via the service’s app. No cash required. That, to me, gives Lyft a competitive edge over Uber. In fact, Uber’s embrace of tipping creates a rare opportunity for Lyft to one-up its much larger rival, by adopting Uber’s former policy and altogether eliminating tips from its pricing policy.

Reader Reality Check

How will Uber’s new tipping policy affect you?

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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.