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Businesses Transportation

Nearly Two-Thirds of Uber Customers Don't Tip Their Drivers, Study Says (theverge.com) 262

Posted by msmash from the closer-look dept.
Only 1 percent of Uber customers always tip, while nearly 60 percent never do, according to a new study from the National Bureau of Economic Research (NBER). From a report: The average tip is 50 cents a ride, but for those who do tip, the average is more like $3. Men are more likely to tip than women, but female drivers get tipped more than male ones. Tipping has long been a source of fierce debate, especially as it relates to ride-hailing companies like Uber. For years, the company rejected efforts to add a tipping option to its app, arguing it would overly complicate the seamlessness of the experience. But Uber eventually caved and now drivers earn hundreds of millions of dollars in tips every year. The NBER study on tipping with Uber is sure to throw more fuel on the fire.
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Nearly Two-Thirds of Uber Customers Don't Tip Their Drivers, Study Says More

Nearly Two-Thirds of Uber Customers Don't Tip Their Drivers, Study Says

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  • Shocking (Score:5, Insightful)

    by Evangelion ( 2145 ) on Tuesday October 29, 2019 @10:34AM (#59358488) Homepage

    You mean when there's no social pressure, acts which are only done because of social pressure happen relatively infrequently?

    • Why would you? (Score:5, Insightful)

      by stealth_finger ( 1809752 ) on Tuesday October 29, 2019 @11:05AM (#59358628)
      What's the American obsession with tipping? I've already paid the asking price and you expect more money just because? Fuck that, if the price isn't enough to cover the service, up the price and don't expect the customer to cover your wage shortfall because your boss is too tight to pay properly.

      • Re:Why would you? (Score:5, Insightful)

        by MitchDev ( 2526834 ) on Tuesday October 29, 2019 @11:19AM (#59358696)

        I'm American and I think tipping is ridiculous. Pay your servers/drivers/etc properly and drop this tipping nonsense.

        • I'm American and I think tipping is ridiculous. Pay your servers/drivers/etc properly and drop this tipping nonsense.

          I would pay extra to go to a restaurant (or other service) where tipping was banned. Build the cost of the waiter's extra income into the cost of the meal and do away with the tipping malarkey.

          • Re: (Score:3)

            by Fringe ( 6096 )
            Yes but... I do avoid restaurants that lie about their prices by including an 18% (or more) "service surcharge." Raise the prices honestly, not in fine print below some other stated prices.

            • Re: Why would you? (Score:3, Informative)

              by Italiano42 ( 6220070 )
              In Europe, the price on the menu is typically a round number and includes tax. You know exactly what you'll pay before the bill arrives. It's a far superior system to the deliberate price obfuscation Americans tolerate.

          • Re: (Score:3)

            by ffejie ( 779512 )
            Danny Meyer's Union Square Hospitality group has you covered. [ushgnyc.com]

            Save you a click: many of his restaurants are no tipping, or "hospitality included" meaning prices are 20% higher than you'd normally see, because there's no tipping from customers. The blog above goes into why they did this.

            But for our teams, the change will be significant. We will now have the ability to compensate all of our employees equitably, competitively, and professionally. And by eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work.

      • It's not just an American thing. I just got back from South Africa, and of all the places I've traveled, their push for tipping was by far the most aggressive. Put NYC waiters to shame.

      • What's the American obsession with tipping?

        It's not an American-only thing.

        I went to Egypt recently, and tipped services are rampant there. You're obligated to tip just to use the bathroom.

        • Re: (Score:2, Funny)

          by Oswald McWeany ( 2428506 )

          It's not an American-only thing.

          I went to Egypt recently, and tipped services are rampant there. You're obligated to tip just to use the bathroom.

          I usually tip anyway, to ensure the stream goes in the right place.

        • Re: (Score:2, Insightful)

          by Hinky ( 6346018 )
          If it's an obligation it's not a tip it's a tax.

      • Re: (Score:3, Insightful)

        by Darinbob ( 1142669 )

        Agreed, as an American I think it's silly too. All this tippng is based upon unwritten rules, they're not obvious, and you don't learn of them except through word of mouth Do you tip a cashier at the grocery store? No. Do you tip the waiter at a restaurant, then yes. Both are underpaid but different rules. Do you pay the busboy at a restaurant? No. Inconsistent. Do you tip a bus driver, no. Do you tip a taxi, I don't know... Uber? Beats me.

        I give a tip when I get my haircut, but it's generally ju

        • Agreed, as an American I think it's silly too. All this tippng is based upon unwritten rules, they're not obvious, and you don't learn of them except through word of mouth Do you tip a cashier at the grocery store? No. Do you tip the waiter at a restaurant, then yes. Both are underpaid but different rules. Do you pay the busboy at a restaurant? No. Inconsistent. Do you tip a bus driver, no. Do you tip a taxi, I don't know... Uber? Beats me.

          I give a tip when I get my haircut, but it's generally just a "keep the change". Which was fine when the haircut was $18 and I handed over a $20. But the cost went up a bit and handing over $0.50 seems silly. And yet... I don't know if tipping is even normal for a discount haircut or not and I haven't ever bothered googling to find out. So every time I do leave extra money I feel silly like I might be violating some common social norm.

          The real kicker is employers then confiscating the tips for themselves.

        • Do you pay the busboy at a restaurant? No

          I don't know about you, but I don't give restaurant tips to somebody in particular. I leave the money on the table. Let the staff figure out how to divvy it up.

      • What's the American obsession with tipping?

        There's a separate, lower minimum wage for tipped employees. One employer can't change it without putting themselves at a competitive disadvantage. The tipped wage has to be abolished across the board to see any change here.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          Actually, one employer can. There's a restaurant group in New York that bans tipping. They do quite well. Someone gave the link up above.

          Employers *like* tipping, and the silly minimum wage laws that go with it in the US, because they can hire staff cheap and let them fend for themselves. Tipping originally was highly frowned upon in the US because it's was a bribe for service and the Americans had gotten tired of all that old world corruption. But socially acceptable bribery slipped in eventually.

      • Re:Why would you? (Score:5, Informative)

        by AmiMoJo ( 196126 ) on Tuesday October 29, 2019 @12:58PM (#59358956) Homepage Journal

        Employers love tips because they can pay below living wage and have terrible working conditions, while staff are strongly motivated to keep smiling and serving the customers as best they can anyway.

        It's a sign of a massive imbalance in the power of the employer and employee.

        • Re: (Score:3)

          by Calydor ( 739835 )

          Imbalance is putting it mildly. As a European I have trouble understanding how the American tipping culture is different from alms.

        • Employers love tips because they can pay below living wage and have terrible working conditions, while staff are strongly motivated to keep smiling and serving the customers as best they can anyway.

          It's a sign of a massive imbalance in the power of the employer and employee.

          They also like it because they can pay less payroll taxes.

          Employees like it because they too can pay less taxes.

          Tipped employees are "supposed" to report the earnings for tax purposes. But how often do you think that happens?

      • Re: (Score:3, Interesting)

        by superdave80 ( 1226592 )
        Amen. I've really become annoyed with tipping lately. First, it's SUPPOSE to be a 'good job' reward. But now I'm made to feel like if I DON'T give them a tip, they are working for slave wages, and that's my fault. Also, it use to be 15% was standard. Now every receipt/screen starts out at 20% by default (and goes up from there). I've just started tipping 10% (if the service is ok), because the math is way easier. I'm tired of being the one that is suppose to pay people to do their job, rather than th

      • What's the American obsession with tipping?

        Irrational though it may be, tipping has become embedded in culture for certain service jobs, and when you come to America you just have to know which jobs feature tipping. We tip restaurant waitstaff, so we feel obligated to tip in places where you order at the counter and have the food delivered to the table, or even in some places where we also pick at the counter. We tip rideshare drivers in the same way we have been used to tipping taxi drivers, so I'm willing to bet that most of the non-tippers are yo

    • Well that and it even used to be not possible to tip with Uber, which was the reason I intially started uising it when visiting the US. There's a set price in the app for the service and I'll pay it, don't play any fucking mind games with me.

      Nowadays tipping is there even in countries where it isn't the norm. Like if I get a regular cab here I just pay the price on the meter (disregarding for a moment all the scams they can pull on you) but Uber tries to guilt me with the tipping prompt. Just pay your emplo

      • It was always possible. Hand the driver some cash. Driver gets all of the money, no cut taken by the bank, Uber, or card company.

  • Solution (Score:2, Funny)

    by RobinH ( 124750 )
    I think the solution is fairly obvious. They have a pay equity problem. Uber should average the tips and distribute them evenly between men and women.
  • ...half the time I try to tip, the bloody app doesn't work and won't let me :(

  • Protip: (pun intended) (Score:5, Interesting)

    by Zof ( 6254934 ) on Tuesday October 29, 2019 @10:38AM (#59358504)
    If you always tip (like I do) you get very highly rated by the drivers. It doesn't matter how busy it is or what event is happening, you'll get an Uber.

    • Re:Protip: (pun intended) (Score:5, Insightful)

      by stealth_finger ( 1809752 ) on Tuesday October 29, 2019 @11:12AM (#59358658)

      If you always tip (like I do) you get very highly rated by the drivers. It doesn't matter how busy it is or what event is happening, you'll get an Uber.

      Soooooo, bribery for preferential service then?

      • It is like he is using money To Insure Promptness

      • As he stated, they key is to always tip LIKE HE DOES.

        You probably hand a few bucks to the driver (aka a bribe) versus proffering a rolled-up five spot protruding ever so slightly from your anus (aka an unmistakable sign of moral superiority).

        It’s all in the delivery.

  • Avoid using Uber... (Score:3, Insightful)

    by fbobraga ( 1612783 ) on Tuesday October 29, 2019 @10:40AM (#59358512) Homepage
    ... or any other "ride sharing app", if you can: using it is support for low quality jobs

  • Fuck Tipping (Score:5, Insightful)

    by UnknownSoldier ( 67820 ) on Tuesday October 29, 2019 @10:40AM (#59358514)

    Tipping is fundamentally broken [melmagazine.com].

    If a business truly cared about its employees it would have profit-sharing.

    Fuck tipping with its "unwritten rules."

    • Re:Fuck Tipping (Score:5, Interesting)

      by NoNeeeed ( 157503 ) <slashNO@SPAMpaulleader.co.uk> on Tuesday October 29, 2019 @11:19AM (#59358694)

      I remember reading about an experiment where they had servers behave (at random) either happy and cheerful, or abrupt, rushed and unfirendly. In both cases they performed their job the same. The result was that the "friendly and cheerful" staff were tipped less on average. The theory was that people perceived the cheerful and friendly staff as being less deserving of a tip because they were clearly enjoying their job, or were having to work less hard.

      It is akin to the locksmith paradox. If you have a newly trained guy turn up and take an hour to get into your house/car, you feel like he's worked hard and deserves his $100. If he has 10 years experience and does the job in 5 minutes because he knows exactly what to do, many will feel cheated when they hand over the same fee, despite getting an objectively better service, because they perceive that he didn't work so hard.

      • Re: (Score:2)

        by nnull ( 1148259 )
        It's funny, because I have people actually try to use that excuse to dispute my charges when I charge them an expedited fee to get their order out the door ASAP. They completely ignore that I moved other peoples orders for their crap and I have to do an hour long change over just to accomplish the task (Which costs me money because I'm down for an hour).

  • tipping should be legally banned (Score:5, Insightful)

    by Dallas May ( 4891515 ) on Tuesday October 29, 2019 @10:42AM (#59358520)

    Tipping is just bad economics. It's frustrating for the customer and the employee. And it just opens the door for wage theft. The only people that benefit from tipping are the people who don't tip and then get subsidized services.

    Restaurants and other tipping centered industries should just pay their employees like every other industry.

    • yeap: tips is "necessary" for bad/fragile jobs only...

      • yeap: tips is "necessary" for bad/fragile jobs only...

        No, it's necessary for the bosses to have you subsidise their wage bill.

    • Tipping is just bad economics. It's frustrating for the customer and the employee. And it just opens the door for wage theft. The only people that benefit from tipping are the people who don't tip and then get subsidized services.

      Restaurants and other tipping centered industries should just pay their employees like every other industry.

      Wrong, the employers benefit, too. The money in tips that employees receive is money the employer doesn't have to pay. See the ongoing Door Dash tipping scandal for further details.

      • Re: (Score:2)

        by Bert64 ( 520050 )

        They don't have to pay it, but they also don't receive it in the first place which makes their overall revenue lower.

      • Don't know about DoorDash specifically, but numerous economic studies have been done on tipping in the restaurant industry. Studies have shown that if restaurants would just raise the price of food and drinks 15% and then not accept tips, they would actually be more profitable, their employees will be happier, and their customers report that they are more satisfied. Heck, even business owners that experiment with dropping tipping report they like it more because it saves a lot of headaches in accounting pay

        • their customers report that they are more satisfied.

          However, consumers are very price conscious and will notice a 15% increase in price -even if it doesn't change their total bill.

          These two statements would appear to contradict each other.

          • I don't disagree. What people report and how they actually make decision are often different.

            Not so dissimilar to air travel. Sure the budget guys really suck and everyone hates their experiences when traveling on them, but when it's time to book another ticket many many people just sort by price.

    • There is one theoretically beneficial reason for tipping at restaurants, but it does not apply to taxis/ride share drivers.

      The work at a restaurant at any given moment varies widely though the day, but a particular server's wage is the same. Tipping produces pay that varies with the number of customers served. This creates an incentive for the best servers to work the busiest shifts which aligns with the owner's interests.

      Since drivers are paid by the fare, their earnings already scale with the number of cu

  • Better study (Score:3)

    by Nidi62 ( 1525137 ) on Tuesday October 29, 2019 @10:47AM (#59358540)

    A better study would be did tipping levels go up or down after it came out that all these services (Uber, doordash, etc) would simply subtract the tip amount from the driver's base guarantee, essentially giving the companies free money.

  • Tipping sucks (Score:4, Insightful)

    by bjdevil66 ( 583941 ) on Tuesday October 29, 2019 @10:48AM (#59358546)

    When I use Uber, etc., I don't care about chasing 5 star ratings or other social aspects of the transaction. Take me from point A to point B. Done.

    The last thing I want to do is deal with is tipping. Adding gratuities to ride sharing apps is like re-adding commercials to streaming content where there previously was none. No thanks...

  • The only way to be sure the right person gets the money is tipping in cash when ever possible.

  • you know damned well we are both stuck giving 5* ratings to total shit. You are punished for giving real ratings. Guy leaves me on a mountain? 5* Guy drops me 5 blocks away? 5* Guy fucking goes on a 30 km out of the way trip? 5*

    Fucking hate uber.

  • Two of those times I failed to tip because I misinterpreted the interface of the app. And then there was no way to go back and tip. I meant to tip all three times. Maybe they've improved the situation since, but it's wholly unacceptable for an app which is commonly used by intoxicated people to be confusing.

    Maybe next time I'll try Lyft. Uber hadn't yet run anyone over with inattention in the name of developing autonomous vehicles when I was using it. I'd feel worse about it now.

    • Two of those times I failed to tip because I misinterpreted the interface of the app. And then there was no way to go back and tip. I meant to tip all three times. Maybe they've improved the situation since, but it's wholly unacceptable for an app which is commonly used by intoxicated people to be confusing.

      Maybe next time I'll try Lyft. Uber hadn't yet run anyone over with inattention in the name of developing autonomous vehicles when I was using it. I'd feel worse about it now.

      If you really must tip, just give the guy some cash so he actually gets it.

      • You're assuming I was carrying some at the time, and further, that I had small bills on me. But if I Uber to an event from a campground, I might just leave that stuff at home. Or I may have used my small bills to tip a food truck worker.

        I stand by my statement about the app.

        I really despise tipping culture anyhow. The whole thing is stupid. It only exists because workers are underpaid. Let's just pay everyone a living minimum wage or better, and let rich people tip if they want to show off how rich they are

      • That's what I always did, back when I used Uber. I was never sure how the fare got divvied up, but I knew where that cash was going.

  • he has said multiple times that tipping is not required with UBER. For a long time they didn't even offer the option, but caved under the pressure of other ride shares like Lyft who did it from the start. https://www.businessinsider.co... [businessinsider.com] or https://economictimes.indiatim... [indiatimes.com]
  • I stopped tipping my Uber and Lyft drivers in New York City, when the rates went through the roof. They're already guaranteed $26 per hour before expenses ($17 per hour after expenses)

    Source here. [vox.com]

    Unlike waiters, who are "tipped employees" who are only paid $10/hour, but then get a credit to hit the minimum wage of $15. Source here. [eater.com]

    When I am in another city where rates are low, I am much more likely to tip, because those drivers aren't receiving a living wage in most cases.
    • I take the subway, bus, or ride a bike in NYC. I don't want to be a contributor to traffic congestion, and it's cheaper (and healthier in the case of the bike) anyway.

      • Are you wearing a respirator while cycling. Because otherwise you're sucking a lot of pollution whilst biking 'twixt the cars and buses. You're also at elevated risk of being struck down by someone in a nice safe car. Neither of those things are healthy.

        • The air in your car is likely less healthy than the air outside (https://www.iqair.com/us/blog/air-quality/in-car-pollution).

          Especially if you had a burrito for lunch.

          • My car is old and can't be offgassing much any more. My lady's car has a carbon filter. When you cycle your rate of respiration goes up and you suck more toxics, and pump them rapidly throughout your body because your heart rate is also up.

        • I'm not a fucking coward. Also, I live near a park, so a lot of north-south trips can be mostly inside the park.

      • Re: (Score:2)

        by ffejie ( 779512 )
        I mostly take the subway, bus, or just walk too, but it's 4 different trains to get from my apartment to the airport so I default to private transport. Also, subway service has been increasingly bad at night, and Lyft/Uber are great for the outer boroughs.

        • Yeah, welcome to Dumbericantia, where politicians are all too willing to invest in military scum and their homicide sprees abroad, but transit? Starve the beast!

          NYC would be better off as an independent city-state, since it wouldn't be bled white by the fedgov while seeing virtually nothing in return.

  • What about "out of app" tips? (Score:3)

    by b0s0z0ku ( 752509 ) on Tuesday October 29, 2019 @11:02AM (#59358610)
    I always tip people in cash -- that way, it's not traceable and they can just pocket it. Why would anyone tip in the app if they can do it "off the books?"

    • Why would anyone tip in the app if they can do it "off the books?"

      Because of the Earned Income Tax credit. When filling out taxes, if they show that they made more money, they get more money from the federal government.

    • A lot of people don't carry cash. I carry a couple of "emergency" $20s, but I'm not gonna tip somebody 20 bucks for a 10-buck ride.

  • I knew I was a good tipper but (Score:5, Interesting)

    by soft_guy ( 534437 ) * on Tuesday October 29, 2019 @11:04AM (#59358626)
    I live in Austin which has Ride Austin as an Uber competitor. It is a not for profit ride sharing service which pays the driver more than Uber does. I have never used Uber, but I use Ride Austin. If I take a ride that costs $25, i will usually tip about $10. I did not realize that was more than most people would tip. I assumed that the driver probably makes $1-2 plus whatever I tip which is why I tip that much.

  • No one should have to rely on tips (Score:3)

    by Ranger ( 1783 ) on Tuesday October 29, 2019 @11:22AM (#59358712) Homepage
    for their income. Everyone should make a living wage doing their job. Tips should be rendered for extraordinary service. I'm glad that Uber allows tipping now. I know Lyft allows tips and I do tip when I use that service.
    • Uber has always allowed tipping. You could have carried cash like a free human being and handed the driver a $5 bill. In-app tipping? Why would you want to use a payment method where the banks, card companies, and Uber itself all take a bite?

  • I always tip the driver (Score:5, Funny)

    by jlv ( 5619 ) on Tuesday October 29, 2019 @11:29AM (#59358750)

    On my last Lyft ride 3 months ago, I told them "don't buy into the WeWork IPO".

  • Why tipping? (Score:3)

    by smooth wombat ( 796938 ) on Tuesday October 29, 2019 @11:31AM (#59358758) Journal
    If all you're doing is sharing a ride with someone and you give them a small amount to cover the cost of their fuel, why would you need to tip them? Or is this some kind of screwed up taxi logic I'm not understanding?

    • No, this is screwed up Vulture Capitalism in America bullshit. Why pay employees when you can expect the customers to do it?

  • Ok? (Score:2)

    by nnull ( 1148259 )

    Why am I tipping a driver from a program that's supposed to pay them enough to not worry about tipping? Now I have to have cash with me all the time for something that's supposed to be automated and cashless.

    Next they're going to stick out their hand like in Vegas and expect me to give them a $10 tip for bringing my bag out from 5 feet.

  • I've always tipped but 2x it was the next time I started Uber and saw the do you wanna tip still sitting there.

  • Also, two-thirds of Uber drivers should clean their cars and brush their teeth.

  • I'm a little confused by tipping for Uber. I (somewhat) understand tipping for restaurant workers a % of the bill, as none of that bill goes directly to the waiter. But isn't like 75% of the Uber fare going directly to the driver already? Haven't we already agreed on a price that you will directly earn for your driving?

    It reminds me of a conversation I had with my wife a few years back regarding a tip for the photographer that took our family pictures. This was an independent, for-hire photographer tha

  • seems there is a good size intersection between slashdot posters and non-tipping Uber customers. :-)

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