1. Friday, August 15, 2014

    Uber must include Tips in the App NOW 


    A while back when Uber started they incorporated something called “Tips Are Included”, which is cute and plausible back before the ridesharing company started slashing prices and raising their commissions.

    A year ago a ride from Hollywood to LAX in a taxi would typically cost about $70 and that same ride via Uber would cost about $50. The Uber ride would be in a cleaner car, a bottle of water would be available, charging devices would be there for your dying iPhone, and thanks to the Uber App after the ride was over the fare would be instantly deducted from the passengers’ credit card.

    Thus the ride to the airport was cheaper and “better” via Uber and the company could say the tip was included.

    A year later that same ride cost a mere $30 with Uber and in a few weeks it will cost even less. The company claims the price cuts will encourage more passengers to use the service which will give the drivers more rides and thus make everyone more money. But the truth is a driver can only make so many trips in an hour – and will more than likely make less money during those hours than they would have a year ago, even if there are more passengers.

    Why? Because It still takes time to get to the passenger and time waiting for them to get to the car and then time for the ride to be completed. Meanwhile Uber is smiling like a pig in [mud] because they are making the same (or more) commission than they did on each ride a year ago, they are now charging the drivers for use of the phone used to connect them to passengers, and other nickels and dimes end up in their pockets and not in the drivers.

    The tips are included. But they are all tips going to Uber, not the drivers.

    Now that the typical ride from Hollywood to LAX is considerably less, it’s time to stop pretending that the driver has this magical tip baked into the fare, because they don’t. Plus, by definition a tip is something the customer determines AFTER the service has been rendered. The cashless Uber model is ideal, and thus should be implemented into the Uber App so that if a passenger experiences a pleasant, clean, fast, enjoyable $27 ride from Hollywood to LAX during rush hour traffic and wants to flow their driver $5 they should be able to do it with a click of a button.

    But Uber has not allowed this.

    One can only imagine it is because there is no immediate business incentive for them to do it.

    But that is short sided. For if they can advertise that they have the lowest rates AND if they can attract and retain educated, intelligent, drivers BECAUSE at the end of the day the drivers are being rewarded financially, then the fleet of Uber drivers will maintain the level of quality it now sees.

    Once the profit motive leaves the driver ranks and the only people who can afford to drive relatively new cars around cities are those willing to work for close to minimum wage, the quality will drop and Uber will have shot themselves in the foot with greed.

    Now is the time to implement tipping while the quality of drivers is still here and the prices are substantially lower than taxis: who also get tipped.