TLC Could Soon Force Uber to Provide Tipping Option

The New York Taxi and Limousine Commission announced a proposal Monday that would require credit card-based vehicle companies such as Uber Technologies Inc.to offer a tipping option within the app.

Uber has said that the reason it doesn't allow tipping is because tips could create a bias among riders and drivers and could also lead to drivers spending most of their time in wealthier neighborhoods where the fare is likely to be higher.

The city's taxi agency has a tip for Uber - make it easier for passengers to give gratuity. The lack of one on Uber's app diverts an estimated $300 million a year in tips from New York City Uber drivers, Jim Conigliaro Jr., IDG's founder, told a conference call Monday afternoon.

But drivers who were lured to Uber with promises of big pay and more business faced increased competition from fellow hacks who flooded city streets. This time, it's over the ride-hailing company's app, which doesn't include a tipping option.

The IDG estimates tipping will be worth an extra $300m (£238m) to drivers in the city every year. Nobody's explicitly saying this is a shot at Uber, but Lyft has included tipping since 2012 and Fasten allowed tipping in 2016, so Uber's pretty clearly the only holdout. If Uber is forced to adopt tipping in its two most important USA markets, it wouldn't make much sense to refuse to do so elsewhere. As Uber faces myriad controversies this year, it's locked in intense competition with Lyft Inc. for drivers, and any worker who feels tipping is important can easily switch to Uber's rival.

"People do want to tip and they actually feel uncomfortable when they get out of the vehicle and they don't leave a tip for the driver", Conigliaro said.

"That's why, in New York City, we partnered with the Machinists Union to make sure current and future Uber NYC drivers have a stronger voice and launched a series of new tools and support policies for drivers", the company said.

An Uber spokesperson said the company had not yet seen the TLC's proposal but looked forward to reviewing it. "Uber is always striving to offer the best earning opportunity for drivers, and we are constantly working to improve the driver experience", the spokesperson said in an email.

  • Arturo Norris