Friday, July 17

Should I tip my Uber Driver?

One of the common misconceptions about Uber is that somehow the tip is included in the fare.  This simply is not the case.  The truth of the matter is, most Uber drivers are earning below minimum wage.  Even more, tips sometimes make the difference between being paid for a trip or the driver coming out of pocket to cover his overhead for that ride.  Ask yourself this:  would it ever be appropriate to tip a taxi driver?  What about a hotel bellman, or a valet?  Do you tip your server at a restaurant?  What if that person was working just for tips, and received no other income?  In the case of Uber, sometimes that is the case.

The common thread with these roles is that tipping is customary, particularly when service meets or exceeds your expectations.  Uber DOES NOT include a tip in your fare, and there is no way to add one using the app.  The only way your Uber driver will receive a tip is if you offer him one.

It is important to understand how an Uber driver earns his pay.  In Tampa Bay, someone using Uber pays the following fare:

  • $1 Safe Rider Fee - this is for background checking your driver and commercial insurance (the Uber driver is also responsible for insuring his vehicle).  The driver gets none of this.
  • $.95 per mile (the driver receives $.76/mile after Uber's commission).
  • $.13 per minute (the driver receives $.10/minute after Uber's commission).
Uber drivers are only paid when a passenger is in the vehicle.  If I receive a request that is 4 miles away, I am not paid for my mileage or my time driving to your pick-up spot.  If I am dropping you off in a place where there is minimal demand for a ride, I also have to reposition my vehicle to somewhere with more demand.  The time I spend waiting for my next fare is completely unpaid.

If I always had another passenger waiting to be picked up after dropping one off, and that passenger was close by, the fees Uber pays would be reasonable.  That rarely occurs.

What often happens is that I will get an early morning request for the airport.  It's important to understand that I do not know where you are going until I pick you up - Uber hides that from me - so I can't cherry pick the rides I wish to provide.  I probably have driven 5 miles/10 minutes to pick you up.  After dropping you off at the airport, you might assume I am picking someone else up.  Unfortunately, flights aren't arriving at 5:00 in the morning.  Even if there is a pickup, it is a crapshoot whether that passenger is headed to my area (the beach - an unusual destination for morning arrivals) or maybe to downtown Tampa, which is in the opposite direction.

Now that I have a full week of driving to analyze, I can report that fewer than half the miles I drive are paid miles.  While I should be able to improve my productivity over time, it is unlikely I will ever do better than 60-65% of total miles being on the clock.  When I am only earning $.76 per paid mile, having 50% of my driving miles go unpaid means my income isn't covering what the IRS says my vehicle is costing me.

Bottom line:  Don't stiff your Uber driver unless they suck.  Give them a tip.  We make so little that your tip could be the only pay we receive for giving you a ride.  Also, rate your driver a "5" unless you want them to lose their job.  Even though driver ratings are on a 5 point scale, Uber considers any score below 4.6 grounds for termination.

2 comments:

  1. You've done better at getting tips then I have. I don't think I'll ever get many tips on Uber unless they add a tip option to the app.

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    1. They definitely need to make it possible to tip through the app. I heard Lyft allows for this. Maybe one day there will be a class action lawsuit and Uber will have to pay us 20% of our earnings in lost tips. Wouldn't that be nice!?!

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