Uber is rolling out a new function in its ride-sharing app to allow tipping. The company says in-app tipping should be available to all drivers in the U.S. by the end of July. Similar apps like Lyft already offer tipping. But how much should you tip your driver?
On how much to tip your Uber driver
"Well the standard tip for a taxi is 15 to 20 percent. And that is my initial reaction: I would say tip 15 to 20 percent of the fare. But things get really dicey with Uber because they have dynamic pricing. What might be a $40 ride to the airport at three in the afternoon could be a $150 ride at peak time. Do you tip 20 percent on $150?"
On in-app tipping
"Well you know, Starbucks used to have a thing where you couldn't tip on credit cards or their gift cards. So there was like a technological separation between you and the tip. The same thing happens with the in-app thing. You know, with a cabbie, you actually have to pay the cab driver. And in Uber you can just say, 'Bye!' And walk out of the car. And that's a problem. I do think that the Uber drivers need tips, because when you look at their compensation, you know, Uber claims they're making $17 to $20 an hour, but a study in Canada said after they pay their cut to Uber and pay for their gas and tolls and everything, they're making like $4.60 Canadian an hour. So they kind of do need your tips the same way cab drivers need tips to help meet their bottom line."
On choosing not to tip Uber drivers
"I think it's rude. I think one of the things about Uber, you know, is that they can rate you. The cabbie can't rate you. He's never gonna see you again. But you know, the driver on Uber... the lack of a tip could lead a lower score, which could make it harder for you to get an Uber in the future. But just in terms of just being a decent human being, I think it's a good idea to tip the driver. But the question is how much do you tip the driver. And we're gonna have to see how Uber sets up their in-app policy. Is it gonna be a percentage? Is it gonna be a set amount?"
"One of the things I like to bring up is, why do we have tipping? One of the reasons we have tipping is to subsidize the wages of the waiter. You, the dining public, or you the Uber-riding public, are subsidizing this so the owner or the shareholders aren't paying the living wage. So I always tell people to remember that."
On his personal tipping policy
"I wrote a book on tipping, and I'm constantly afraid I'll be exposed as a hypocrite, so I'm always tipping. I'm a pretty good tipper. If I haven't tipped somebody it's because it was just complete intoxication or accident."
This article was originally published on June 23, 2017.
This segment aired on June 23, 2017.