New York’s Taxi and Limousine Commission announced a proposal on Monday requiring Uber and other car services to add a tipping option in the apps.
In the past Uber has issued confusing statements over whether tipping was included in the fare, but acknowledged last year that gratuities were not included. However, company messaging frequently says “no need to tip,” which is an ambiguous phrase that many may interpret as “tips are included,” not “you don’t have to tip if you don’t want to.”
The current system of permitting cash tips has not worked well for drivers, because consumers often think there’s a single, simple price with a tip included, unlike the situation for taxis and restaurant waitstaff.
“Uber’s refusal to allow in-app tipping has caused rampant passenger confusion over whether tipping is permitted (it is) and whether gratuity is already included in the fare (it’s not),” said a spokesperson for the Independent Drivers Guild in a statement.
Uber’s biggest competitor, Lyft, has had a tipping screen for a long time, giving the rider a convenient way to tip without cash, which is far from the frictionless experiences these apps seek to provide. Still, it’s optional and not a simple, gratuity-included solution. Uber simply says you can give cash if you feel like it.
It’s very unlikely that Uber will react to this by including a gratuity automatically, because that would effectively raise prices, making it harder to compete with Lyft, which has a screen for optional tipping. But doing so could give a few advantages: it would conserve the app’s smoothness and increase driver satisfaction and supply of willing drivers. Instead, riders can expect something similar to Lyft—a tip option below the star rating system, something else that is misunderstood (a 4.5 is effectively a zero for drivers).
New York City is one of Uber’s biggest markets, and any changes in Uber’s app may reflect across the board, unless the company only turns the option on for that city. However, New York’s policy could make other cities follow suit. If they do, it’ll be a big win for drivers.
Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann. Got a tip? Send it to tips@yahoo-inc.com.
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