More Than You Ever Wanted To Know About Uber Tips

In response to my last post about driving for Uber, my coincidentally-named friend Bob asked in the Comments section about tips. Tips? Heh. Let me explain...

Uber is both ingenious and diabolical. They started a taxi service (let's be honest) and convinced the general public that it could be provided more cheaply than conventional taxis. And the public readily accepted this premise, because who doesn't like "cheaper?" Uber also implied (if not coming right out and saying) that tips were "included" in the fare and that passengers didn't have to even bother with them. Uber wanted the experience to be smooth: Call a cab on your phone; get in, get out; and have it paid by your credit card on file, have a nice day. Easy-peasy for the Me-Generation.

The public, while decrying taxis as "smelly, expensive, undependable rattletraps" at the same time must have believed that all taxi drivers were getting rich on those exorbitant, usurious fares. Or maybe the taxi owners were getting rich. *Somebody* had to be getting rich for people to believe that a taxi service like Uber could be run such a discount and still make money. (Hint: It can't.)

No taxi driver is getting rich.

And of course not even Uber is getting rich. Nearly every day we hear stories on the news of how Uber is losing billions of dollars each quarter. But somehow the public believes that it's a viable money-making venture. Odd, that. The logic escapes me.

So let's get back to what a driver makes. Out of those refreshingly lower fares that passengers love, Uber takes 30% in various fees. What does that leave for the driver? Not bloody much, thank you. In fact, when you compare apples to apples (and I do), driving for Uber is just about the same, expense-wise as driving a taxi. ...Except you're driving (and wearing out) your own personal vehicle.

No Uber driver is getting rich.

Here in Pensacola the city-regulated meter rate for conventional, licensed taxis is $2.25 per mile. Uber's base rate is $1.13 per mile (plus they tack-on some extra fees). On short trips, Uber might even be more expensive than a taxi. On longer trips, Uber has the advantage.

And remember, Uber's initial, introductory rates were as low as $0.75 per mile in many cities, including here in my town. That has steadily (and quietly!) increased over time. It's the old drug-pusher's philosophy: Get them hooked first and then you can do whatever you want. Uber, being unregulated, can raise rates as it pleases. So now Uber's fare advantage is not as great as it was in the beginning. But people like the service and so on the Scale Of Importance! the overall rate drops down a notch. Or...customers just haven't noticed that using Uber is more expensive than it was in the beginning.

Uber drivers were making so little money that they pressured the company into providing a tip option. Uber resisted for a long time but finally relented. But it certainly was not due to public demand. Currently, some people do tip; some don't. And it's weird. Unlike my taxi passengers, some Uber tips are totally out of proportion to the ride.

Just today I picked up a man at a local seafood restaurant. His home was well north of town, and we had a lot of time to talk on the way. He had a lot of questions. People are always interested in what other things Uber drivers do...or did before “doing Uber.” Though I'm reluctant to say it, I gave him my spiel about how I've been a helicopter pilot for a long, long time and that I'm semi-retired now, and Uber is a way of keeping me out of the house and meeting cool, interesting people.  (Which is true.)  This sparked many wide-ranging questions from my rider as well as some oddly astute observations about aviation. He obviously knew more than he was telling.

The fare to his house was only $15.00. When we got there, as usual I said that I enjoyed talking with him, and wished him good luck in his career, of which he'd told me plenty as well. Later on, I saw that he'd added a $15.00 tip to his bill. Nice! (I've noticed this before – some people have tipped me more than the actual fare for the trip. That never happened in my taxi.)

I've noticed that if you treat people with respect, engage them in real conversation – not the fake, “How do you like this weather?” kind, and don't “talk down” to them, their tips are usually bigger.

I've also noticed that while I didn't get that many tips in the beginning back in May, more and more customers are tipping now. I'm not sure whether this is a cultural thing, as people are becoming more and more aware that they should tip, or whether it's my sparkling personality generating them. I suspect it's the former. I think we're still in the “honeymoon” phase of Uber.

On the other hand, I am learning how driving for Uber is different from driving a cab, and maybe I'm getting better at this “job.” (I'll deal with those differences in a future blogpost.)

At the end of the day, between thirty and forty percent of my riders tip. I've done 217 trips so far and have received 74 tips. (To be honest I've gotten a few cash tips but they are very, very rare.) My tips are running slightly over 30%, which is higher than when I drove a taxi, where the tips consistently hovered around 20%.

I'm always grateful to get tips. But I'm ecstatic when riders give me a five-star rating, which is important.  I'll explain why in a future blogpost as well.