In reversal, Uber adds option to tip drivers
Uber is adding a tipping feature to its app, reversing a longstanding policy as its market share slips amid a barrage of negative press.
The change — which has already debuted in three cities and will be introduced in the Boston area by the end of July — is part of an effort by the ride-hailing giant to reduce turnover among its increasingly unhappy drivers, and to improve its public image following a string of bruising scandals over its business practices.
“It’s the right thing to do, it’s long overdue, and there’s no time like the present,” two Uber executives wrote in a blog post explaining the decision. “This is just the beginning. We know there’s a long road ahead, but we won’t stop until we get there.”
Once the feature is rolled out, customers will have the option of using the app to tip their drivers $1, $2, $5, or a custom amount, in addition to assigning the usual one- to five-star rating. The tips go directly to drivers; Uber said it won’t take a cut.
“This is a huge deal,” said Jake Weinberg, a 34-year-old Acton resident who has been driving for Uber for three years. “It’s too early to say how much more money I’ll make, but I can’t tell you how many times people have told me, ‘I don’t have cash, but I really wish I could tip you in the app.’ ”
Uber has also made other tweaks long sought by its drivers.
Beginning today, customers who cancel a ride request more than two minutes after making it will have to pay a $5 fee. Previously, passengers could bail on a trip up to five minutes after requesting it and pay nothing, frustrating drivers who spent that time moving toward the passenger and declining other ride requests.
Similarly, Uber drivers will no longer go unpaid while waiting for passengers to show up at the pick-up area. From now on, drivers can start running the meter two minutes after arriving, instead of being forced to wait until the passenger gets in the car. For customers, that means there’s an incentive to hustle outside to their rides instead of lollygagging at the bar or spending another minute futzing with their hair in the mirror.
But Uber’s decision to allow in-app tipping — an option its main rival, Lyft, has always offered — was by far the most significant concession to drivers, as it had steadfastly resisted intense pressure to do so for years.
The company previously cited a variety of reasons for refusing to add the feature, saying tipping would interrupt its vaunted “seamless” checkout process and make customers feel pressured to pay more.
And last year, Uber sparked a firestorm when it argued tipping would result in pay discrepancies between drivers of different races because of passengers’ unconscious biases. The firm pointed to academic studies showing that black waiters earned smaller tips than white waiters who provided equally good service; but many black drivers lambasted that justification, saying even tips made smaller by bias would be better than none at all.
A spokeswoman for the company acknowledged that Uber hesitated to retreat from the controversial stance, which it had previously insisted was based on principle, not profit.
“Tipping, regardless of whether it’s in an Uber or not, can be influenced by personal bias,” the spokeswoman said in a statement. “It’s also true that people want the opportunity to both recognize and be recognized for excellent service. Both of these things factored into the design of [the] tipping [feature] and the decision to launch it.”
Months of unrelenting bad press — including allegations of systemic sexual harassment and discrimination at its corporate headquarters and a video depicting chief executive Travis Kalanick berating an Uber driver who complained about low pay — apparently prompted the company to accelerate a slow-moving driver-happiness initiative, which included the tipping feature and new wait-time policies.
Amid the scandals, Lyft bookings have soared while Uber’s US market share versus its main rival has dropped from 85 percent in January to 77 percent in May, according to credit card data analyzed by research firm Second Measure.
The company is also eager to stem its massive losses — $2.8 billion last year, according to figures Uber released to Bloomberg earlier this year. The company was valued at $70 billion when it last raised funds.
Some drivers are feeling positive about the changes, saying the company’s new attitude is palpable.
“For the longest time, drivers felt as if they weren’t being listened to, and a lot of them actually quit because the whole system seemed so skewed towards riders,” Weinberg said. “This changes the whole dynamic of Uber.”
Others, however, are skeptical. They argued tips aren’t enough to make up for fares they insist are too low and wondered if many passengers will get into the habit of tipping.
“It’s some money — maybe it will pay for the water bottles and candies I put in the car for people,” said Mohamed Ben Abdellah, a 30-year-old driver from Mansfield. “But tips have nothing to do with Uber being nice to drivers. That’s what we earn with our good service every day. We deserve that money. What we really need is for them to raise the rates.”