Rideshare Apps

5 Reasons You Should Tip Your Uber Driver

In promoting themselves as a convenient and cheap alternative to taxi cabs, Uber has often discouraged tipping by emphasizing that tips are already included in the fare. When I began using Uber, I assumed the drivers were well compensated. However, when the company began advertising its services as being cheaper than taxi cabs, I looked into this further. I discovered that most UberX drivers earn $16 – $30 per hour. That’s before expenses are factored in. I’ve read other accounts of drivers working hard and coming away with nothing more than minimum wage.

Uber tips
It’s baffling that Uber would discourage leaving tips when some drivers are pulling in minimum wage. What’s more, Uber offers passengers the option to add tips for Taxi services but not for UberX drivers. I find that really unfair. Especially since Uber competitor Lyft does offer passengers the option to add a tip. After reading more about some of the issues drivers deal with, I’ve decided UberX drivers should be tipped. Here are five reasons why:

UberX drivers don’t earn very much

$16 – $30 per hour UberX drivers apparently earn less than taxi cab drivers. However, that rate can go as low as $3.99 per hour when you take into account insurance costs, gas and vehicle maintenance. Factor in income taxes and drivers are left with even less of a profit. I would include Uber drivers on the lower end of the above mentioned hourly range in the tipping category. Restaurant waiters and housekeeping staff earn the same amount and generally expect to be tipped.

Uber takes a hefty cut of divers’ earnings

Uber takes a 20 – 28% cut of each fare, a percentage that varies depending on which type of Uber service you’re requesting. With fares already being lower than cabs and some drivers earning the equivalent of minimum wage, that 20-28% cut can really eat into their earnings. Adding a few extra commission-free dollars cash can make a difference in the drivers’ bottom line. Let’s not forget, it’s their willingness to provide their services at a discounted rate that makes it possible for us to have access to such a vast network of cheap and convenient transportation options worldwide.

Uber drivers are not reimbursed for gas or vehicle maintenance

Gas prices are low at the moment, but I imagine driving people around all day can translate to high gas bills and car maintenance expenses. Uber does not provide drivers with any kind of car maintenance stipend and those of us who have ever commuted to work know how quickly those expenses can add up. Plus, some drivers buy newer model cars for the sole purpose of driving for Uber and that investment doesn’t always pan out well when you’re earning $16 per hour.

For some drivers, Uber is a full time job..with no benefits

Despite the low income most UberX drivers generate, for some it’s their only viable employment option and they pursue it full time. Yes, there are people who do this as a side job and don’t mind the small profit margins. However, for those who work full time, I imagine it’s tough doing it without any benefits. Even minimum wage workers get healthcare benefits when they work full time. Not the case for UberX drivers.

It’s not an easy job

While I’m sure Uber drivers spend a lot of time picking up business travelers and well-behaved tourists, they also get their fair share of late night bar hoppers and rowdy college students. I imagine the mix of passengers is the same as on an airplane but in a much more confined space. I’ve had drivers tell me of atrocious behavior they had to tolerate from passengers to maintain a high rating with Uber.

One Los Angeles UberX driver told me about a woman he picked up at the Beverly Center who kept him waiting outside for 15 minutes (she instructed him not to park his car because she was “almost there”), then had him take her to a CVS and wait in the parking lot for 20 minutes with the meter off. Any time you have to deal with a lot of people, you are sure to come across a fair number of a**holes. Nothing eases the hassle like a cash tip.

The appeal of Uber has always been convenience: The ability to request a ride easily through your phone, cheap fares, and the fact that it’s cash-free. I don’t know about you, but I’m willing to pay a little extra for these conveniences if it means drivers are well-compensated. I have yet to have a negative experience with UberX and will continue to use the service. But if they’re not willing to allow passengers to leave a tip through the app, I’ll gladly use cash instead.

What are your thoughts on this? Do you tip UberX drivers?

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  1. I think you’re making an argument for higher prices (though without considering what higher prices would do to use of service). I don’t think you’re making an argument for tipping per se.

    One of the great draws of Uber is the seamlessness. No cash transactions. You arrive and get out of the car with no fumbling over payment.

    Without tipping built into the app, I’m certainly not going to tip. And UberX drivers are accepting my rides without the expectation of tipping (even if they would desire a tip, and who wouldn’t want free money, they don’t reasonably expect a tip will actually be provided in the majority of cases).

    Uber adjusts price in a market based on total number of drivers and riders. They expect higher prices mean fewer rides, and tipping is a price increase, which isn’t always great for drivers.

    Ultimately you’d rather have Uber reduce it’s cut of the overall transaction rather than charge customers more. But that’s not likely to happen…

    In any case, charge me the full cost of the service inside the app whatever that is. Please no tipping.

    • I’m not advocating for higher prices but rather fair compensation for UberX drivers. It would be ideal for Uber to take a smaller cut, but since that is high unlikely to happen I think tipping is appropriate. Cash-less transactions are definitely convenient, which is why they should give us the option to leave tips through the app – especially since they’re already allowing it for taxi service. In my experience, Uber drivers provide much better service than cab drivers do and if any of the two groups deserve a tip, it’s most often the UberX drivers.

      • When a driver chooses to drive for Uber, they are agreeing that the compensation is fair for their work. You can increase the cost to pay someone more, but if the market won’t bear it, people will go elsewhere. It’s why NYC may raise the minimum wage for fast food to $15+ per hour, and the result is we place our fast food order on an iPad terminal. The market won’t bear $15/hour for that. The markets will determine what fair compensation is – Uber won’t have luck finding drivers if it doesn’t have fair compensation.

        • I respectfully disagree. In some places, people accept $4/hour under the table for hard manual labor. In other places, people sell their children into slavery for a few hundred bucks. Does that mean that is how much they value their time and themselves? People in desperate financial predicaments get exploited all the time – let’s not justify this exploitation as “market demand.”

          The same goes for Uber drivers – all the rideshare companies pay these low fares to people they know don’t have many other options (i.e. they’re new immigrants, they can’t speak english well, their college degrees are worthless here so they can’t pursue their careers). Uber fares are sometimes half of cab fares – they can afford to raise them a little bit and both the riders and the companies would survive. But Uber has very little regard for their drivers. They know raising rates will equal demand for better pay, so they keep it low and instead increase their cut of the fares for higher profits. It’s sick. If I can combat that slightly by giving Uber drivers a couple of extra bucks (which still works out cheaper than a cab), I’m happy to do that.

  2. The only good move on Uber is NOT to use them at all.
    Uber = exploitation, risk for the passenger due to no oversight at all

  3. I drove a taxi while in college and I appreciated every tip I got. I always tip.

  4. Based on your logic, why doesn’t every minimum wage drone deserve a tip?

    • Yes, I think people (not drones) who work in the service industry and perform their jobs well should be tipped. I’ve worked a minimum wage job before and it requires very hard work and dealing with a lot of a**holes for next to nothing. That was just to earn some pocket change in high school – some people have to feed a family on minimum wage.

  5. I asked my last driver in Northern VA why it is so hard to find an Uber. He said they don’t make much money in NoVA b/c of the horrendous traffic and the requirement that they take any fare in the area. He said 10 minutes was the break even point, but in NoVA it can easily take 30 minutes just to go 5 to 10 miles for a fare pickup. If you refuse a pickup, you’re terminated. He said there are days where he makes no money at all.

  6. I never got a chance to take Uber while I was in US, thanks to cheap rental cars. But in India, Uber has been part of our life and I left the idea of buying a car the week I landed in Bangalore, after looking at the traffic. I am not sure of US drivers but here in India, Uber drivers have something called as Incentive per day. So each day when they take 8 rides and 14 rides, they get quite a good amount of incentive.
    So drivers these days are earning and living a happy life.
    Tipping a driver is unusual and even drivers don’t expect as well. If they do well, they get 5 stars as a tip.

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