Even though its competitor Lyft has always allowed customers to tip drivers through its app, ride-sharing giant Uber has firmly resisted that option – although it might soon be forced to change its policy.
New York City’s Taxi and Limousine Commission this week said it will take up a proposal that would require car services that rely on app-based credit card transactions to include a way for customers to tip drivers through the app. If the commission ultimately decides to adopt the rule, a process that could take several months, other cities might follow suit.
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The New York proposal is backed by a petition effort signed by thousands of drivers. Two months ago, a bill was introduced in the California legislature that would impose a similar requirement on Uber.
A year ago, as part of a settlement with drivers in California and Massachusetts, the company agreed that it’s OK for drivers to solicit cash tips by posting signs in their cars, or simply by asking customers.
On its website, Uber informs customers who look for guidance that its app does not include a tip in the trip fare. “In most cities, Uber is a cashless experience,” the website says. “Tipping is voluntary. As a rider, you are not obligated to offer your driver a gratuity in cash. If you decide you would like to tip your driver is welcome to accept.” That verbiage was recently changed from the previous version: “You don’t need cash when you ride with Uber. Once you arrive at your destination, your fare is automatically charged to your credit card on file — there’s no need to tip.”
After the company changed its policy on tipping last year, an article in the Harvard Business Review was highly critical of the company’s decision not to allow gratuities to be paid through its app, instead requiring a separate transaction between passenger and driver.
“While this tipping procedure sounds harmless, it puts Uber at a significant competitive disadvantage,” the article said. “In addition to the inconvenience of the extra step, which will require business travelers to collect multiple receipts for expense account reimbursements, many riders will feel pressured to be overly generous in the amount they tip.” It noted that customers might also feel pressure to cough up a bigger tip if they want a good rating from the driver. “Customers never enjoy being strong-armed over a gratuity,” the article said.
When we polled our readers in February 2016, we found that by a two-to-one margin, they do not regularly tip Uber (or Lyft) drivers. Would that change if you could tip through the Uber app?
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