As part of Uber's $100 million settlement with drivers, the company now permits them to let riders know that tips aren't included in their fare, either with a sign or by directly asking them. But the app still doesn't include an option to add gratuity, so people looking to reward their drivers have to pay cash -- even though Uber otherwise operates using cashless transactions.
On its website, Uber actively discourages tipping, too. So, why's the company so against an optional service charge?
A spokesperson for the company told the Boston Globe that giving customers the option to tip would inevitably lead some drivers to get paid more than others. The spokesperson pointed to two reports showing that minorities on average get tipped less than white people.
But drivers told the Globe that the potential for discrimination doesn't bother them:
Some drivers reacted with strong skepticism, saying Uber’s low fares -- currently $1.24 per mile and 20 cents per minute, plus fees, for an Uber X in Boston -- mean that any tip would be a big help, even if some drivers unfairly get more. The company should at least test a tipping function on its app in one city, they said, and see how strong the bias effect really is.
Uber explained in a blog post on Thursday that tipping might also encourage drivers to stay away from low-income areas (which already tend to be underserved by taxis) because they might get smaller tips.
More broadly, the company "felt it would be better for riders and drivers to know for sure what they would pay or earn on each trip -- without the uncertainty of tipping."
Many restaurants have done away with gratuity and have begun paying servers a liveable wage instead. It makes sense: tipping does sometimes lead to discrimination, and studies have shown that it doesn't even necessarily lead to better service.
The difference is that Uber doesn’t pay drivers wages. Drivers, who are considered independent contractors rather than employees, rely on fares to get by rather than receiving a salary or set hourly rate. They also don't get health care and other benefits.
So, depending on the time or day, the length of rides, and any number of other factors, an Uber driver might not even make minimum wage. And that's why extra tips matter so much to them.
As part of the settlement, Uber created a "drivers association" in the two states where drivers brought the class action suit. It's unclear what, if any, power the group will have, but tipping is likely going to be an issue that comes up in the future.
Note: The Huffington Post's Editor-in-Chief Arianna Huffington is a member of Uber's board of directors, and has recused herself from any involvement in the site's coverage of the company.