Uber is finally adding tipping – Recode





Uber is rolling out a number of driver improvements, including the most sought-after feature: Tipping.

The new feature — which drivers have fought for during protests dating back to at least 2014 — goes live today in Seattle, Minneapolis and Houston. The company plans to roll it out to all drivers in the U.S. by the end of July 2017, according to an email the company sent today.

“Today, we’re making a commitment,” the email reads. “For the next 180 days (and beyond) we’ll be making meaningful changes & improvements to your driving experience. Some changes will be big, some will be small — all will be the changes you’ve asked for.”

If drivers have their accounts set up to automatically deduct rental or leasing payments from its earnings, the tips will also go toward those payments.

Other features the company is launching this month include shorter cancellation times. If riders cancel their ride after more than two minutes — instead of the customary five minutes — drivers will be given a fee.

Drivers will also be paid for every minute that they wait for a rider after a two-minute grace period.

Importantly, the company is also making optional injury protection insurance available for drivers. Those who opt in will pay $.0375 cents for every mile there is a passenger in the car. To help drivers pay for that Uber has increased the per-mile fare by six cents in the 28 states where this insurance is available.

The ride-hail company is in the midst of a period of upheaval in the wake of an investigation that shined a spotlight on its cultural issues and priorities. Much of the conversation has centered around adjusting its corporate structure and environment, while little attention has been paid to the drivers until now.

Johana Bhuiyan is the senior transportation editor at Recode and can be reached at johana@recode.net or on Signal, Confide, WeChat or Telegram at 516-233-8877.

The company has long struggled balancing the needs of its drivers with the convenience of its rider experience.

Up until today, Uber CEO Travis Kalanick has been resistant to adding tipping — in spite of internal pressure from staffers — for instance, because of the “friction” it causes when a rider has to check out. But just yesterday, Lyft announced that its drivers had cashed out over $250 million in tips.

Kalanick currently isn’t at the helm of the company — the notoriously combative CEO has taken a leave of absence as Uber begins a period its board hopes will erase its past. As Recode’s Kara Swisher writes, board member Arianna Huffington believes Kalanick — and by extension Uber — has paid for the sins of the past.

This also comes as the company begins to slow its growth in marketshare in the U.S., as the Financial Times reported.

Retaining drivers is a substantial issue for Uber particularly given its current scale in the U.S. In many markets, the ride-hail behemoth has tapped the pools of people who are licensed, qualified and would want or need to drive for a car service.

Until recently, the company spent much of its marketing dollars on getting drivers to take the first ride, several sources told Recode. But less than half of those drivers continued to operate on Uber’s platform.

While the company has opened up that pool by making short-term car leases available to people with all levels of credit through its Xchange leasing program, driver retention is still crucial for the company in order to maintain and grow its marketshare.