Why Uber and the Tech Industry Need to Take Tipping Seriously

Tipping is a social, economic, and legal morass. Tipping rules fluctuate considerably by country, region, and situation. In the United States, it is an intrinsic part of the cultural fabric, more perhaps than some other countries. My point of view in this article is therefore based on an American perspective. Every day, businesses, service providers, and customers alike must navigate norms, expectations, and conflicts arising from “gratuity.” Uber decided to avoid this hassle by excluding tipping from their platform. Now that decision is haunting them.

Uber famously disrupted the transportation industry. By removing the need to hail drivers, carry cash, or wonder at whether you are being taken on a joy ride, Uber recreated what it means to use a taxi. Under this model, the company attained significant success.

Skip to the present. 

Uber is embroiled in numerous conflicts, ranging from internal complaints made public to “employee” dissatisfaction. (The question of who counts as an Uber employee has seen its day in court.) The latest imbroglio is about tipping.

Drivers complain that not only do they receive a diminishing fraction of fares, but the app doesn’t facilitate tipping. Moreover, in some states, it’s illegal for drivers to request a tip. These constraints present a problem, especially for those drivers whose tips supplemented their wages.

Uber’s stance on the topic is tucked away in their website.

“While Uber does not require riders to offer drivers a cash tip, you are welcome to do so.”

Reportedly, Uber is concerned that their drivers will only pick up passengers who tip. Just like customers provide feedback, so too do the drivers. This feature could quickly give birth to a two-tiered system. Drivers will turn down riders in poorer areas, or passengers with a low rating, opting to cherry pick big tippers in an affluent area.

New York’s Taxi and Limousine Commission announced that car services that accept credit cards must now include a tipping option. They consider tipping to be analogous to a performance based employee receiving a cash bonus on top of her wage. This of course is a blow to Uber's stance. But should tipping really be such a contentious issue? Maybe we are overthinking it. Introduce a tipping option and be done with it. If drivers give low ratings based on tipping and state it outright in the comments, then deal with that as a separate matter.

I think the problem stems from the demise of cash and the rise of digital pay. Old norms are dying hard. Those old norms contributed to the economy of entire industries, and in turn, livelihoods. I'm all for change; prudent change. We shouldn’t throw out the baby with the bathwater.

Uber’s refusal to bring a compromise to the table makes them look dangerously out of touch with both their drivers and passengers. We may no longer have loose change in our pockets, but I'd like to think that we all still know how to reward or thank someone that has provided us with excellent service.

Taking the long view, this debacle highlights growing resentment toward the technology industry. In San Francisco, it is almost impossible to find somewhere affordable to live unless you are a tech multi-millionaire. The result is that normal people are increasingly feeling pushed out of their cities by those in the tech industry. To then see Uber bosses deem tipping a hassle adds fuel to the fire, and seems perilously shortsighted.

The digital transformation underway is displacing countless people. Traditional roles are being replaced by automated tech. Surely new jobs will emerge, but in the meantime, battle lines will be drawn and assumptions made. These entrenchments will carry over and rear their heads in the future. Uber should be a little more sensitive to the importance of tipping as a marker for difficulties to come.

Technology brings us many rewards, but not everyone shares them equally. Now that we are more connected than ever before let us not forget the human element. We are more than our devices and our services.