To tip, or not to tip?
That is the question for Uber riders this week following the $100-million US settlement of a class-action lawsuit brought against the company by its drivers — and many are wary of what the answer may be.
The popular (and polarizing) ride-hailing service reached an agreement with groups in two states on Thursday to maintain the status of its drivers as independent contractors, not employees.
In lieu of being forced to pay for things like employee benefits, health insurance and expenses for its drivers, Uber will pay out a lump sum of approximately $100 million if a judge approves the deal — $84 million of which is guaranteed to drivers, $16 million of which is contingent on an increase in the company’s value.
But money alone wasn’t enough for the plaintiffs, Uber drivers from California and Massachusetts, to drop the lawsuit.
Uber also had to make some concessions based on concerns raised by drivers involved in the case.
“As Uber has grown — over 450,000 drivers use the app each month here in the U.S. — we haven’t always done a good job working with drivers,” wrote CEO Travis Kalanick in a company blog post about the settlement on Thursday. “At our size that’s not good enough. It’s time to change.”
The post explains that Uber will be working to create drivers associations, affordable quality improvement courses and to “provide drivers with more information about their individual rating and how it compares with their peers” as part of the settlement, among other things.
Uber also rolled out a new deactivation policy for all drivers in the U.S. and is creating an appeal process to “improve transparency and accountability and give drivers an additional voice,” according to Kalanick.
Tipping comes to Uber
With all of the big numbers and improvements for drivers wrapped into the settlement announcement, it was easy to look past what any of this might mean for Uber riders last week.
That changed on Sunday when, after combing through the agreement’s details, the Wall Street Journal highlighted an interesting change to Uber’s rules: Drivers are now permitted to solicit tips.
Specifically, drivers can now post signs in their cars telling passengers that tips are not included in the fees they pay for rides through the app.
Attorney Shannon Liss-Riordan, who represented the driver plaintiffs in the case against Uber, called this one of the most significant non-monetary terms of the agreement in an interview with the independent worker support platform SherpaShare published Wednesday.
“What really got me mad about Uber when I first started hearing about Uber back in 2012 or 2013 was what they were doing with tips,” she says in a video on SherpaShare’s blog. “Uber’s mantra was ‘leave your cash at home, the tip is included, no need to tip on Uber’ — but as we all know, that wasn’t true … Uber misled its passengers into believing it’s OK not to tip because ‘don’t worry, the tip is included.'”
To tip, or not to tip?