Uber adds option to tip drivers as it heads in new direction

Uber adds option to tip drivers as it heads in new direction

Uber adds option to tip drivers as it heads in new direction

Signaling that possibly only one man has been standing in the way of Uber drivers being able to receive tips from passengers as they can with ride-hailing rival Lyft, the company announced Tuesday that tips for Uber drivers will now be possible in the app starting immediately in three cities, and in all U.S. cities by the end of July.

The tipping option, long available in the app of arch rival Lyft, will become part of its app in the Miami area and all other USA cities by the end of July.

The tipping option will roll out Tuesday in Seattle, Minneapolis and Houston, and it is expected to expand to all USA cities by the end of July. Uber riders and UberEATS customers will then be able to tip a driver after rating their trip.

The ride-sharing service is also reducing its cancellation window from five minutes to two. Both features will be available nationwide in August 2017. Tuesday, the company announced a fundamental shift in policy that grants its independent contractors the thing they've requested most: an in-app tipping feature.

Coincidentally or not, the about-face comes just a week after Uber's CEO Travis Kalanick retreated on an indefinite leave of absence from the company. After an internal investigation uncovered sexual harassment, bullying and other boorish behaviour, Uber fired more than 20 employees and pledged to create a more harmonious culture. Drivers will also get a cut of Uber's "teen fare" which had previously gone exclusively to Uber.

In the past, competitor Lyft has capitalized on the fact that Uber did not allow riders to tip within its app; Lyft has allowed tipping in its app for years.

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In a recent report on Uber drivers called "The Faceless Boss", NPR reporter Aarti Shahani surveyed 1,000 drivers and found that the company's drivers had a few overarching complaints. Starting today, Uber is embarking on an initiative entitled "180 days of change" (get it?) and the company's first step to moving onward and upward is to introduce tipping in select cities. Last week, an administrative law judge for New York State Labor Department ruled that three local Uber drivers and "others similarly situated" should be considered employees for unemployment purposes. It's also allowing more drivers to designate the routes that they want to travel to keep them closer to a preferred destination.

It's a new era for Uber.

In early January, Uber accounted for 56.8 per cent of all rides in the city, while Lyft had 9.5 per cent.

A backlash could deepen Uber's losses, which totaled $2.8 billion previous year alone.

By adding in-app tips, Uber can't erase months of bad publicity, but it can win some favor with drivers, who have long criticized Uber for treating them poorly.

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