Uber finally launches feature allowing passengers to tip
Beleaguered ride-hailing company bows to drivers’ demand; new option available in Seattle, Minneapolis, Houston, and nationwide by end of July
SAN FRANCISCO — Bowing to years of intense pressure from drivers, Uber on Tuesday launched a new feature that lets passengers tip from within the ride-hailing app.
The surprising about-face, which comes after Uber for years adamantly refused to facilitate tipping, is part of the San Francisco-based startup’s efforts to rebrand itself following months of controversy. Reeling from accusations of sexual harassment and other inappropriate behavior in the workplace, the company that’s worth nearly $70 billion is attempting a massive overhaul of its aggressive culture.
Listening to drivers is part of that transformation, said Wayne Ting, Uber’s general manager for Northern California.
“The main thing is that drivers have been asking for it,” he said of in-app tipping. “Drivers are our most important partners, and if I’m honest, I don’t know that we’ve always held up our end of the bargain to honor the partnership. So for us, today is really about turning the page.”
In-app tipping is now available in Seattle, Minneapolis and Houston, Uber said in an email sent to drivers Tuesday morning and later posted on the company’s website. The ride-hailing company plans to add more cities over the next few weeks and make tipping available to all U.S. drivers by the end of July.
Uber on Tuesday also unveiled
a handful of other driverfriendly changes that will roll out in the coming months, including insurance to protect drivers in case of injury. Drivers who choose to enroll would pay a fee of about 4 cents per mile, and if they are hurt in a crash, Uber could cover their medical expenses and lost earnings, or pay a survivor benefit to their family. For now, the service is not available in California, but Ting said Uber will launch it in as many states as possible, barring regulatory hurdles.
Other changes include charging passengers if they cancel their ride after more than two minutes (instead of the old five-minute benchmark), letting drivers choose their destinations for more trips, and paying drivers for time spent waiting for passengers to get to their car. Uber says more improvements are in the works — the company has pledged to announce new changes every month for the next six months.
The news comes a day after Lyft, Uber’s smaller ride-hailing rival, said it will offer larger tipping options for rides that cost more than $25 — with the app suggesting tips of $2, $5 and $10, instead of the original $1, $2 and $5 choices.
Lyft, which said Monday its drivers have made more than $250 million in tips, has offered in-app tipping from the beginning. The idea is that the feature makes it easier for passengers to tip, since they often don’t carry cash, and makes them more likely to do so. Uber had long refused to follow suit. In April of last year, the company said tipping created uncertainty for both drivers and riders, could lead to discrimination, and might cause drivers to spend more time in wealthier neighborhoods chasing big tips.
But Uber has undergone a massive leadership shake-up since then. CEO Travis Kalanick took an indefinite leave of absence last week, several top executives including the president of ride-sharing have resigned or been forced out, and Uber has started implementing major changes to everything from its drug and alcohol policy to its board structure. The changes follow two investigations into claims of sexual harassment and Uber’s broader company culture, which has come under fire after reports of rampant misbehavior.
Meanwhile, Uber is facing a criminal investigation into its use of a secretive software tool to evade law enforcement, and is battling a lawsuit that accuses the ride-hailing company of stealing rival Waymo’s selfdriving car technology.
For drivers, the tipping news is big. Not only will it affect their paychecks — it’s a symbolic win against a company that has a reputation of putting the needs of its customers before those of its drivers.
“I have to say, when they told me they were adding a tipping option, my jaw hit the floor,” said Harry Campbell, who drives for Uber and Lyft in Los Angeles and blogs about driving at TheRideShareGuy.com. He called the move “a big step in the right direction.”
Uber’s lack of an in-app tipping option is one of the top three things drivers have complained about in the past, Campbell said. He expects the new feature will increase drivers’ bottom line by 10 to 30 percent.
Political pressure from Sacramento and beyond may have helped pushed Uber to make the change. A pending bill by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, would have forced the company to accept in-app tips in California. New York City Council member Ydanis Rodriguez introduced a similar bill earlier this month, and the city’s Taxi and Limousine Commission also had proposed a rule that would require car services that accept only credit cards to allow cardbased tipping.
“We did it!” Gonzalez Fletcher wrote in a statement Tuesday. “If a customer has to pay with a credit card, they should be able to tip with a credit card. This seems like a very easy and fair concept, and we are glad Uber recognized it needed to modernize its payment practices.”