For years, Uber drivers have bemoaned the company’s policy on tipping. Uber’s tipping policy was limited to cash only, requiring drivers to make their own signs or keep a tip jar in their vehicle. Because the service is handled online, most customers don’t carry cash, which meant most trips went untipped.
Facing increased competition from other companies, Uber recently announced a big change to its system: For the first time, customers can tip an Uber driver entirely through the app.
Here’s how this development will affect drivers making extra cash off this side hustle.
The rationale for changing Uber’s tipping policy
Uber has faced criticism recently for its corporate culture and how it treats its drivers. Other rideshare services such as Lyft, its biggest competitor, allow customers to tip their drivers through the app. In fact, Lyft recently announced that it had distributed $250 million in tips to its drivers.
Uber drivers have voiced many complaints about the company’s services. In response, Uber sent out an email from company representatives Rachel Holt, head of U.S. operations, and Aaron Schildkrout, head of driver experience, to all drivers announcing “180 Days of Change.” This initiative would roll out updates to the app in response to drivers’ issues.
“We’ve heard you. You’ve told us what you want, and now it’s time we step up and give you the driving experience you deserve, because simply put, Uber wouldn’t exist without you,” they said in the email.
This development could cause some drivers to rethink driving for competitors. According to rideshare expert Harry Campbell, the update could be a game-changer.
“Uber adding a new tipping feature is a big deal for drivers because they’ve been requesting it for a while,” said Campbell. “It always seemed strange that Lyft had in-app tipping and Uber didn’t, although we know that’s because the culture of Uber was always geared more toward the passenger than the driver.”
Uber already dominates the rideshare market, but enabling customers to start tipping Uber drivers could cement their position as a market leader.
“With this change, it makes an already popular platform even more popular for drivers,” said Campbell.
Tipping Uber drivers: How it works
In July, tipping became available nationwide via the app. After a driver completes a trip, passengers can choose from preset amounts of $1, $2, or $5, or enter another amount. If they forget to tip right away, customers can add tips for up to 30 days after their ride. The full tip amount goes toward the driver, with no service fees.
To start accepting tips, drivers need to update or download the latest version of the Uber app. Once the update is complete, drivers must click on “Accept Tips” before they can start collecting tips on their rides. Drivers can get a payout on tips they receive at any time with Uber’s Instant Pay system.
How to boost your chances of getting a tip
Driving with Uber can be a lucrative side hustle. To increase your chances of getting a tip as an Uber driver, it’s important to do more than drive customers from one place to another.
“Going the extra miles helps justify tips,” said Campbell.
Part of providing excellent service is understanding the customer experience. If you don’t know what riders go through, you might not know how to deliver a tip-worthy experience.
“Take a ride (or several!) as a passenger and see what other drivers offer and how they act with passengers,” said Campbell. “See what you like as a passenger and implement that as a driver. Overall, your attitude and how you interact with passengers is the most important thing.”
Driving safely and taking the most efficient routes are also essential for success. While providing extras like mints or water can help, you won’t get tips without a professional demeanor and efficiency.
Other changes at Uber
Besides Uber’s new tipping program, the company has also instituted other changes to provide a more positive working experience for drivers:
- Shorter cancellation window: Previously, riders had five minutes to cancel their trips without a cancellation fee, which cost drivers money. Now, drivers will get a cancellation fee if the rider cancels the ride after two minutes.
- Eliminating unpaid wait-times: If you arrive at the destination and your rider isn’t there yet, you will now earn a per-minute wait fee starting two minutes after you arrive.
- Driver injury protection insurance: While Uber provided car insurance for drivers on the job, it often didn’t cover any injuries the driver experienced in an accident. This new policy will protect drivers and their earnings if they are in a covered accident.
- Teen fare premiums: If you drive customers with a teen account, Uber will add $2 to your base fare, earning you more overall for those trips.
By adding tipping and other changes, Uber has made the app more attractive than ever for drivers. If you’re ready to join this popular side hustle and start making money, you can sign up to be an Uber driver online.
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