New York City may force Uber to change how it handles driver tips.
The city’s Taxi and Limousine Commission is weighing a proposal that would require all for-hire drivers to offer riders the option to tip using the same method of payment they used for the ride. In Uber’s case, that would mean adding a tipping option on its mobile app where riders currently pay using a credit card.
The change would be a significant one for Uber, which has avoided past calls to add electronic tipping. New York City is the company’s largest U.S. market, making it painful to exit should Uber choose not to comply with the potential policy change. It could also serve as a bellwether for other regulators to pursue similar policies.
Reported earlier today.
Once the commission officially proposes the change, it must be certified by the city’s law department and subjected to public comment. After a public hearing, the commission must vote to approve the measure.
An Uber spokesman said the company plans to review the proposal when it is officially released in the coming months.
“Uber is always striving to offer the best earning opportunity for drivers and we are constantly working to improve the driver experience,” the company said in a statement.
While Uber technically permits cash tips, its website describes rides as a “cashless experience” and states that “tipping is voluntary.”
“As a rider, you are not obligated to offer your driver a gratuity in cash,” the website states. “If you decide you would like to tip, your driver is welcome to accept.”
Uber’s chief rival, Lyft, has offered the option to tip drivers in its app since it was founded in 2012. Last month, Lyft touted that its drivers have collected $200 million in tips in that time.
Uber drivers have pushed the company to add an electronic tipping option, something it has declined to do thus far. In New York, a petition from the Independent Drivers Guild contends that drivers are missing out on thousands of dollars because there is no electronic tipping option. That petition has garnered more than 11,000 signatures.
Uber executives pledged last month to improve relations with drivers, who have complained that the company’s tipping policy and declining fares have impinged on their earning potential. Uber chief executive Travis Kalanick was filmed arguing with a driver who claimed that the company has reduced the price of its service at the expense of drivers.
Rachel Holt, who runs marketing and operations in the United States and Canada for Uber, told reporters last month that the company planned to give drivers greater say in disputes with riders over canceled trips and reports of poor service.