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In-App Tipping Comes to Uber

Uber’s new features include tipping and not having Travis Kalanick as its CEO. Photo: David Ramos/Getty Images

An update rolling out across 121 cities in the U.S. and Canada, including New York City, will allow you to tip your Uber driver from inside the app. At the end of each ride, along with being asked to rate your driver, you’ll also be given the option to give the driver a tip.

For years, Uber resisted in-app tipping. After settling two lawsuits from drivers for more than $100 million, Uber put up a post on Medium in April of 2016, explaining why it was against tipping:

When we started Uber six years ago, we thought long and hard about whether to build a tipping option into the app. In the end, we decided against including one because we 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.

The blog post then cited studies that showed that tipping is often obligatory — we tip even when service is bad, because we feel guilty otherwise — and that tipping could mean that drivers would favor pickups in richer neighborhoods in hopes of earning more on the tip.

But that was 16 months ago. Since then, Uber has destroyed its own reputation, thanks to scandal after scandal, ultimately leading up to CEO Travis Kalanick being forced to step down, and open speculation about whether the ride-sharing company can survive financially. Meanwhile, its main American competitor Lyft, which has featured in-app tipping for years, has chipped away at Uber’s market share.

Also in the update will be a new feature that issues a small fine to riders who force their driver to wait for more than two minutes. This isn’t a new feature; Uber previously fined riders who made drivers wait more than five minutes.

Taken together, a clearer picture emerges. Yes, at this point, Uber’s PR team probably appreciates any story about the company that is nominally positive. But the real target of both in-app tipping and the wait fee is Uber drivers themselves. Driver-retention rates have become a major issue for Uber — especially when switching to Lyft (and its tips) is as easy as downloading an app.

In-App Tipping Comes to Uber