NYC wants Uber to add tipping to its app

Such a measure could spread across the U.S.

New York City could force Uber and other ridehailing services to add a tipping option to their apps as soon as this fall, potentially resolving a bitter point of contention among drivers and opening the door to nationwide changes.

The New York City Taxi and Limousine Commission on Monday granted a petition by the city’s Independent Drivers Guild to create a rule that would require ride-hailing services to add in-app tipping.

If Uber incorporates tipping into its app for New York City, it’s much more likely to expand the feature to the rest of the U.S. That would be a huge reversal for the company, which has argued since its inception that not allowing inapp tipping was one of the things its riders liked best about it.

“Tipping is a consumer ‘dissatisfier,’ because it forces the cus- tomer to decide how much to give the driver as a gratuity, and it is difficult to know what is the right amount,” said Jack Nerad, executive market analyst for Kelley Blue Book.

But drivers, who have periodically sued the company over the lack of benefits or chafed under reduced fares, have lobbied for it. Lyft has used the in-app tipping option as a lure for drivers disgruntled by Uber’s policies.

“New York City’s professional drivers have traditionally depended on gratuities for a substantial portion of their income. Cuts to driver pay across the ridehail industry has made tipping income more important than ever,” Independent Drivers Guild founder Jim Conigliaro Jr. said.

Uber has about 80% of the ride-hailing market in New York City, according to the Independent Drivers Guild. The rest is di- vided between Lyft and Juno, and both offer in-app tipping.

Adding the tipping function could mean an additional $300 million per year in income for New York City Uber drivers, the Guild estimates. The company argued it treated its drivers so well they did fine without tips. But as the ride-hailing company has lowered prices, drivers say their incomes have decreased.

The company’s statement suggested it would not fight the rule, which the Commission will write by July 1. It then will be subject to a 90-day public comment period, Conigliaro said.

Uber has about 80% of the ride-hailing market in New York City, according to the Independent Drivers Guild.