- Reuters Staff
Uber is in crisis.
After the stunning debut of its fleet of driverless cars in Pittsburgh last year, CEO Travis Kalanick and his company have shifted into serial screw-up mode, culminating in Kalanick admitting, after chewing out a disgruntled driver in a video that went viral, that he needed personal and professional help.
As a onetime avid Uber user who now almost never uses the service, I can easily explain why Uber’s crisis was preordained. It comes down to a simple two-syllable word.
Until I was told otherwise, I assumed Uber was baking a 20% tip into every ride. Then I learned that there were no Uber tips.
In short order, this made me question the entire company. (For the record, I also decided that because I mainly used Uber in New York City, it was much easier to simply raise my hand and hail a cab than fiddle with my phone for five minutes.)
In New York, Uber’s antipathy to tipping may soon change. The city’s Taxi and Limousine Commission is pressing for app-based ride-hailing services like Uber to add a tipping feature. A vote by the TLC board could come later this year.
Uber has opposed tipping based on the argument that eliminating it reduces “uncertainty” about the cost of a ride. But that’s nonsensical. A tip in a cab is typically just math – usually your fare plus 20%. In the good old days, you could be precise by taking 10% of your fare and doubling it, or you could just give the driver a few bucks. It was the opposite of uncertain.
A lifetime of tipping
- Thomson Reuters
I lived in New York for 14 years before moving to Los Angeles for a decade and moving back in 2014. In all my New York years, I’ve taken countless cabs, and of late, they’ve become my main indulgence. I suppose I have failed to tip a few times, back when the taxi economy was all-cash and I couldn’t tell the cabbie to wait for me to go into my apartment to shake loose some change from the couch cushions.
New York is a tipping town. If you don’t want to tip, you live in Paris. Tipping in New York is assumed for pretty much all service industries, from cabs to bars to restaurants to moving companies. The idea that Uber would “disrupt” the taxi business in New York and other tipping-friendly US cities but not include a tipping feature is disturbing and tells you everything you need to know about the company’s values.
I could go retro and tip my Uber driver in cash. But in New York and in other US cities, tipping has become a frictionless experience – you swipe your credit card in the cab and add a tip at the end of your journey. You can tip the driver in cash if that’s your thing, but the point is that tipping in a taxi in major US cities is easy.
With Uber, tipping is a convoluted, political, and I would suggest even a moral undertaking. For decades, those who drive for a living have enjoyed a positive financial relationship with their customers. Tipping was part of the bargain. The tip could be above average, which in New York is 20% for exceptional service.
The trail of a crisis
- REUTERS/Lucy Nicholson
I’m not saying taking a taxi in New York is always pleasant. Uber’s pitch to its many, many users has always been that its product is superior – a high-end “black car” service replacing the beat-up yellow cab. That was what initially reeled me in.
This is what was good about Uber: Kalanick wanted to improve ride-hailing with technology and a better experience. But you can tell much about a company from its earliest expression of values, and in Uber’s case, ditching the tipping was one of those 21st-century anxiety-erasing moves that work well for the people being served but undermine the psychology of the workers – in this case, Uber’s drivers.
The user is paramount; the customer comes first. The customs of the drivers, be they professionals or part-timers, become antiquated folkways, a vestige of an earlier, grubbier time, even if in the days of assumed tipping a sort of beneficial circle of trust had been established between drivers and passengers.
Adding a tipping feature wouldn’t make Uber’s manifold problems vanish. It would, however, be a step in the right direction, even if it’s long overdue.
Every company crisis leaves a trail, one that usually leads back to the beginning. The business world is rife with examples: BlackBerry clinging to its keyboards in a world of proliferating touchscreens. Railroads being outmaneuvered by automobiles and airplanes because they were in the railroad game, not the moving-people-around game. Fast-food firms pushing cheap calories at a time when health-consciousness is surging among consumers.
Uber’s sin was to break the sacred bond between drivers and passenger, made real by the tip. If you think about it, we’re not talking about much money here – two bucks on a $10 ride. But Uber thought tipping was onerous. And in truth, if you aren’t used to it, tipping is sort of intimidating.
But so is New York. You get over it. Uber should have gotten over it from the very beginning.