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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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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