Uber embraces tipping in bid to hang onto angry drivers

June 20, 2017, 2:18pm

Uber is finally giving in to one of the biggest demands made by its fleet: The company will add an option to allow customers to tip their drivers.

It’s the opening gambit in Uber’s new six-month campaign to win over its drivers, called “180 Days of Change.” The tips will be available to all Uber drivers and delivery partners, which includes those fulfilling orders for services like UberEATS, by the end of July. Lyft, Uber’s primary rival in the U.S., has allowed customers to tip drivers for several years.

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“Why now? Because it’s the right thing to do, it’s long overdue, and there’s no time like the present,” said Uber executives Aaron Schildkrout and Rachel Holt in a blog post announcing the changes.

Historically, Uber has had a tough time retaining its drivers, as they are paid, on average, just above minimum wage and, as independent contractors, don’t have benefits or many traditional worker protections. Only 3 percent of people who sign up to be Uber drivers are still with the company a year later, according to an April report in the Information that suggested Uber executives were going to roll out more driver-friendly changes.

Well before the controversies of recent months involving Uber’s corporate culture and an intellectual property legal battle against Google — which have prompted CEO Travis Kalanick to take an indefinite “leave of absence” — Uber has been putting out major fires related to the treatment of its drivers.

Uber has for years battled driver attempts to form a union, including an ongoing fight to kill a Seattle law that allows drivers to do just that. A video from February shows Uber CEO Travis Kalanick telling a driver who was complaining about Uber fare cuts that “some people don’t like to take responsibility for their own shit.”

Most recently, Uber disclosed that it had systematically underpaid drivers in New York for over two years and that it would be reimbursing them — meaning an estimated tens of millions of dollars in total.

The Independent Drivers Guild, a pseudo-union entity approved by Uber as a representative for its drivers, praised Uber’s move to introduce tipping. The Guild has been pressuring both Uber and regulators to introduce tipping for more than a year.

“Today’s tipping announcement is an important win for drivers and proves that thousands of drivers coming together with one voice can make big changes,” Guild founder Jim Conigliaro Jr. said in a statement. “This is an important first step toward a more fair ride-hail industry.”