Th e good news for Uber drivers is that a recent court settlement will open the door to tipping, which will allow them to supplement their modest pay. The bad news for Uber drivers is that a recent court settlement will open the door to tipping, which is a terrible, terrible way to compensate service workers for their exertions. And unfortunately, Uber is showing little interest in helping drivers and passengers work around this dilemma.
On April 21, the ride-hailing company agreed to pay up to $100 million to drivers in Massachusetts and California who’d sued over being classified as independent contractors. The settlement didn’t resolve the underlying issue, but it did include another provision that could significantly alter the experience of Uber drivers and passengers alike: The company stopped telling passengers that a tip is included with its fees. Instead, it’s now telling them that no tip is included or required. In practice, this means that some drivers may post signs seeking tips — but Uber is declining to build a tipping function into its app.
Under the current circumstances, an app with no tip function becomes a recipe for mutual resentment. Drivers who are scraping by on what Uber pays them in fares will expect their passengers to help them out; customers who like Uber because it saves them the trouble of carrying cash will have to fumble around for bills. The fact that drivers and passengers will be rating each other immediately afterward only makes the exchange all the more awkward.
Shannon Liss-Riordan, the Boston labor lawyer who filed the suits, argues that tipping has become a standard part of how workers get paid in the service industry and that drivers should be able to make use of it. Yet as a compensation practice, the tipping system stinks. Making a service worker’s pay contingent on the whims of individual consumers has created countless distortions, abuses, and inequities within the restaurant industry. Far better that restaurant servers — and Uber drivers — simply be paid a reasonable base rate.
Let’s face it: The base fares on Uber are low enough that, when the receipt shows up in your e-mail inbox, you can’t help but think you’ve gotten away with something. You have to wonder how drivers cover their maintenance and gasoline expenses. But Liss-Riordan says getting the company to change its fare schedule wasn’t an option. Maybe the new drivers association that’s also a part of the recent settlement will prevail upon company officials to raise rates enough to spare everyone the annoyance of a tip system. Hope springs eternal.
Failing that, Uber should make tipping as painless as possible for everyone. The company is taking a holier-than-thou approach, saying it wants no part of a system fraught with conscious or unconscious racial bias. The company cites studies saying white waitstaff in restaurants receive greater tips than black waitstaff who provide equally good service.
But unless the company wants to increase its rates for everyone, Uber’s indignation would be better directed toward developing a fairer system for tipping. It could ask customers to set a default tip rate for all rides. It could develop incentive systems so that top-rated drivers receive monetary rewards. In fact, Uber, with its vast store of data and its ability to monitor user behavior, is in an excellent position to devise an efficient system that gives drivers a little more in their pockets and spares passengers the trouble of digging around in theirs.