In a nod to drivers, Uber is officially putting out the tip jar, with Houston one of the first cities where riders can give drivers a little something extra via the app.
At a noontime event, officials with the company announced the change to drivers. Tipping will be available through the app starting in Houston, Seattle and Minneapolis. The change is expected to reflect a long-standing desire voiced by drivers.
“We have heard for quite some time, and, frankly, it is long overdue,” said Trevor Theunissen, public affairs manager for Uber in Texas.
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Offering the option to tip is a major change, company officials said, one that long has been a point of contention between drivers and the company, especially drivers who came from the taxi ranks where tips are an integral part of the economics of being a driver.
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Nothing forbids drivers, per se, from accepting tips, but Uber previously had said it wanted a “cashless experience” free from tips, and riders were not obligated to give drivers extra.
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The changes come during a season of upheaval for the company, dogged by criticism of its corporate culture, namely a sense of sexism and detachment from the realities of its drivers’ lives.
Tipping options will spread to all cities where Uber is operational in the U.S. by the end of July, company officials said. Also by July, two other changes will take place nationally: Riders will be charged starting two minutes after the driver arrives, so drivers can receive some payment for waiting on riders.
Also, the window of time to cancel a ride will narrow from five minutes to two minutes. As with waiting on riders, both changes were prompted by feedback from drivers, company officials said.
Lyft, which many consider Uber’s chief competitor for connecting interested riders with willing drivers, has allowed tips for years. The difference was cited by some drivers in Houston, prior to Lyft leaving in 2014, as why they preferred the company over Uber.
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Texas recently usurped local regulations, leading Lyft and Uber to return to many metro areas, including Lyft restarting Houston operations.
Theunissen said Houston’s competitive market changes were not a factor.
“Whenever we launch a new feature, we start in a few cities to make sure it works really well,” he said, noting Houston and the other cities are large markets with experienced riders and drivers.
Houston riders will have the option via the app when they rate their driver to add money as a tip.
“A lot of riders have also told us they want the option to tip drivers for quality service,” Theunissen said.
John Schlessinger, 44, said he often gives drivers cash after trips to and from the airport, but adding it to his bill would be easier.
“It just makes sense,” he said.
Some potential customers, however, said it was too late to change their feelings about the company, especially related to its track record in Texas.
Houston resident Adam Davison, 23, said hearing from friends in Austin about the election there when Uber fought local regulations requiring fingerprints made him less supportive of the company. When the CEO, Travis Kalanick, joined an economic council organized by President Donald Trump, Davison said he deleted his account.
“Am I happy they are treating drivers better? Sure,” Davison said, when asked if making changes to help drivers make money would lean him to return. “But it doesn’t erase everything else.”
The companies, meanwhile, continue doing booming business in Houston and Texas, especially since local regulations were lifted. Both Uber and Lyft have returned to Austin and Galveston, doing so days after HB 100 – passed by the Legislature earlier this year and signed by Gov. Greg Abbott on May 29 – superseded local rules.
Under state control, Uber and Lyft are required to conduct a national background check but not the fingerprint-based one Houston and Austin required. The companies – but not drivers – also must register with the Texas Department of Licensing and Regulation.
While rules at the city level went away with Abbott’s signature, it will be months before state regulation officials put their own guidelines in place, leaving the companies to operate without full regulation.
“We are going to evaluate and benchmark our program against other states administering similar transportation network company programs and learn from their failures and successes,” licensing and regulation department Executive Director Brian Francis said in a statement following Abbot’s bill signing.
The licensing department said it plans to have finalized rules for the transportation network companies effective by Nov. 1.