Virtual Tipping – Why It Doesn’t Work With Uber or Lyft

For our latest post we welcome guest contributor Jb to share his insights on virtual tipping – and why it just simply doesn’t work. Jb has been a rideshare driver since early 2014, and blogs about his experiences on the blog he runs, uberdriverdiaries.com.

Every Uber driver I know is bitter about the fact that Uber doesn’t allow us to accept tips.  I was too and it’s the main thing that pushed me into driving for Lyft – once Lyft became big enough in New York to keep drivers busy. (Lyft allows passengers to tip directly within the app)  I thought if both companies pay exactly the same but one allows tips and the other doesn’t, then why wouldn’t you work for the one that does?

What I’ve quickly found out though is that virtual tipping,  tipping when the driver is no longer in sight and in a business where it’s no longer clear whether tipping is expected or not, is not the same as handing a cash tip directly to the driver – which I will call traditional tipping.

In traditional tipping, there are many emotional factors at play that motivate people to leave a bigger tip than they probably otherwise would like.  Think about when you’re sitting at a restaurant and you’ve had some nice personal interaction with your server.  When the bill comes, you know that before you walk out the door,

Your server is more than likely going to see how much tip you left for them.  I believe that puts a tremendous amount of pressure on people to actually leave a decent tip.

Expectations

This is by far and away the most important factor in tipping.  Do customers think you’re expecting a tip?  Is a tip normally expected in the industry?  Why do almost all restaurant patrons tip?  Because they know it’s expected – and it’s expected by everyone.  It’s not only expected by the server but it’s also expected by the people you’re sitting at the table with.  Customers will almost always tip when they know it’s expected.  But if any doubt is cast upon that expectation, they become increasingly less likely to tip.

Uber has done everything in its power to remove this expectation from customers’ minds when it comes to ridesharing. They’ve been so successful that even when people use similar services like Lyft, they’ve come to feel that tipping isn’t expected – and therefore not necessary.  In the old days (3 years ago), people knew that drivers expected a tip, they knew their livelihoods depended on it so they most usually gave one.

There are some generous individuals that still reach out and contact Uber to manually leave a tip, but these are incredibly rare cases. For the most part, the tipping aspect, for Uber passengers, has gotten swept under the rug.

The Ego/Emotional Factor

There are egos and emotions involved with in-person tipping – that are completely missing with app-based tipping.  The customer wants their server to think they’re a decent person.  They don’t want the server to think they’re a jerk.  And since the server will probably be waving good-bye to you one last time before you walk out the door, you will probably give a pretty generous tip.  Many people want recognition and respect from the server and will leave a generous tip to get it.  The personal recognition from a server that the tip was noticed and appreciated goes a long way in motivating people to leave good tips.  But with anonymous virtual tipping, none of these ego-driven/emotional factors come into play.  Many customers therefore lose their primary motivation for tipping.

The same emotional forces go into play with traditional car services.  In a traditional car service, you take a passenger from Point A to Point B and probably have some pleasant personal interaction with them along the way.  Your passenger knows without a doubt that you will see their tip or lack thereof, before they get out of the car.  So as a way to say, “I’m not a jerk, I’m the same decent person who just spent the last 20 minutes talking to you,” they will routinely leave a minimum of $5 all the way up to a $20 tip for a typical airport trip. This is especially true if they’ve used an Uber promo code during their ride, since they’ve saved money on the trip.

There’s just something about looking someone in the eye when you leave a tip that makes most people want to leave a decent tip.  And it makes just about everyone leave at least some tip.   With app-based tipping, I’ve found that only about 15% of the people leave any tip.

There’s also the ego factor.  In New York, many first-time or infrequent tourists to the city will leave a traditional car service driver an insanely huge tip – because they’re not sure how much they should give you, and they know New York is insanely expensive.  They fear that the little $5 tip they may give their drivers back home would make them look naïve to a New York city driver.  And they sure don’t want that embarrassment!  They assume they’re going to look stupid and touristy if they don’t give you at least $20 (even for a $35 airport trip)!  When in reality they actually look touristy by leaving such a large tip – but thank God for tourists – I always say!

In fact, it’s funny because just as I was writing this, a friend from Atlanta who is coming to New York next week, texted me and said, I have a cab riding question for you, of all things. How much tip do you give on a cab ride?”  My friend doesn’t want to look cheap by leaving an Atlanta-sized tip.  Tourists don’t want to embarrass  themselves when it comes to tipping in New York.  They’ll actually over-tip to save themselves the embarrassment.

There is a large amount of personal interaction and ego-driven emotion that goes into in-person tipping that gets totally lost with app-based tipping.  App-based tipping is anonymous and cold.  You get home after your trip, open the app and it asks you if you’d like to tip your driver.  Then it suggests set amounts, like $2, $3, $5.  These amounts set kind of a framework of decency from which the passenger will decide how much to leave.  $2 is the first choice so most people go with that.  Every now and then someone will leave $3.  But they’re certainly not going to throw $10 or $20 your way… that’s just not on their radar.  Or maybe they just won’t tip at all.  After all, who will ever know if they don’t leave a tip?  The driver surely won’t know!  He’s long gone and way out of sight!  And at that moment, you lose most people.  When you take away the embarrassment factor, when you take away the in-person interaction and you take away the ego factor, there’s just not much incentive to tip anymore.

Because of that, I’ve found that app-based tipping isn’t all it’s cracked up to be (not to mention that it all gets automatically reported to the IRS as income – not that you wouldn’t report it anyway, I’m sure)!  It looks like Travis Kalanick may have ruined car service tipping forever by making it such a big, public factor in Uber’s startup.  People have gotten so used to not tipping with Uber that they now think they shouldn’t tip for any on-demand app-based car service.

Tips for Getting Better Tips

My tips with Lyft have run a measly 3-5% of total fares.  I’ll take it though, especially with all the recent price cuts that most drivers don’t consider.  That’s $20-$30 a week more than I would have made and that’ll pay for a tank of gas (at today’s low prices), or a few car washes or a couple of tolls.  So, I’ll take it!  But I know with a traditional car service not only would the tips be more, but more people would tip.

As far as getting better tips, you kind of have to go with what works for your personality.  One guy on the UberDriverDiaries forum says that in order to elicit tips from Uber passengers that he purposely tries to look poor so they won’t think he’s making that much.  He dresses down – way down!  Doesn’t comb his hair and otherwise tries to look disheveled.  He says, ” If people think you really need the cash, they will throw a little at you.”  I can’t bring myself to do that, although maybe it’s not a bad idea.  In my case, I’ve found the surest way to get a tip is to make them laugh before they get out of the car.  This means using your sense of humor in a natural, not-over-the-top way to get a little laugh out of them before they leave.  If they happen to open the Lyft app right after their ride ends, and they still have that laugh in their heart, the chances they’ll leave you a tip improve.

If you haven’t given Lyft a try yet, check out my article, comparing Lyft to Uber. You’ve got nothing to lose.. they’re currently giving out tons of free ride credit to new users, so might as well give it a shot.