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Uber Technologies Inc.’s mega settlement of as much as $100 million helps it solve a major legal liability around workforce classification, but another piece of the agreement could make for some uncomfortable situations in the near future.
As part of the settlement with drivers in California and Massachusetts, Uber has agreed to notify customers more clearly that tips are not included in fares and give tacit approval for optional gratuity. Drivers can now solicit cash tips by asking passengers or posting signs in their vehicles. Shannon Liss-Riordan, a lawyer representing the drivers, said riders should start seeing gratuities as a major part of an Uber driver’s income. In other words, more like a cabbie. “I believe that, with this information, many riders will begin tipping their drivers, which will increase drivers’ pay substantially,” she said in a statement to the court.
In the past, Uber tried to discourage tipping. During the company’s early days, its website said in 2011 that tips were included. Drivers complained that Uber was making its fares seem lower than they really were by rolling in a tip. In any case, they argued that Uber shouldn’t take a cut of the portion of the fare that was classified as a tip. The company eventually changed the way it described the cost of the ride. It currently says there’s no need to tip.
The settlement doesn’t install any formal change in Uber’s tipping policy. The company said it has no plans to add an option to tip through its app or to lower the cost of fares under the assumption people will always leave tips voluntarily. Lyft Inc., always looking for a way to present itself as the friendlier alternative to its larger rival, allows riders to leave tips through its app. Americans have never been able to agree on what services warrant tips and how much. (Just ask Mr. Pink.) Until Uber came along, for-hire drivers were one of the occupations that the average person expected to tip. Liss-Riordan expects riders to revert back to the cultural norms of pre-Uber black cars and taxis, after several years of being trained to do the opposite.
This is a recipe for confusion. Uber, Lyft, and traditional taxis offer more or less the same service—in some cases, a single driver is working for multiple companies on the same day. This makes it almost impossible to form some sort of uniform social norms, said Lizzie Post, co-president of the Emily Post Institute, a publisher of etiquette advice. “Potentially, they’re changing behaviors and expectations; you have to be clear to the customer when they do that,” she said. “I don’t want to take an Uber and stress about whether I’m supposed to tip or not.”
Post, a great-great-granddaughter of Emily Post and co-author of Emily Post’s Etiquette, said Uber should be responsible for clarifying the ambiguity around tipping. Many people, however, find Uber’s hands-off, cashless payment system to be one of its best features. A driver will have to weigh whether asking a rider to take out her wallet is worth the risk of annoying the customer and receiving a poor rating. Even though Uber said it won’t punish drivers for soliciting tips, it does regularly kick drivers off the system for letting their average rating fall too low.
While the settlement is likely to spur more drivers to ask for tips, tipping isn’t a completely new concept around Uber. Chris McGinnis, editor of the blog TravelSkills, recently conducted a Twitter poll asking people whether they tipped Uber or Lyft drivers. About of respondents said yes. Drivers also have divergent opinions about whether people should be tipping them, but in a discussion on Reddit, many made clear that they do expect tips. One said he gives friendly passengers a four-star rating. To get five stars, they need to open their wallets.
©2016 Bloomberg L.P.
This article was written by Joshua Brustein from Bloomberg and was legally licensed through the NewsCred publisher network.