Uber has long resisted adding in a feature to allow riders to give their driver a little extra pocket change on top of the cost of a ride, but a new law set to hit the books in New York City could force them to either reluctantly add the tipping feature, or pull out of one of their biggest markets. The law doesn’t specifically target Uber on paper, per se, but it’s fairly specific; under the proposed law, all forms of for-hire private transportation would have to somehow allow the rider to tip the driver using the same payment method that they used to pay for the ride. The rule is being pushed forth by the New York City Taxi and Limousine Commission.
Uber’s position on tipping has historically been that it would take some of the efficiency and fluidity out of the experience for passengers, but the move comes amid drivers facing serious issues in regards to earning a proper living wage on the platform. According to the Commission, this is exactly the issue that is causing them to push for the new tipping rule to pass. Should the proposal pass, Uber and others like it would be forced to allow their drivers to accept tips in-app, much like Lyft.
Compounding the issue, Uber is currently embroiled in a battle for relevance and revenue; the service faces insolvency if things do not change soon, and a big part of the reason for that is the low fares they charge and how much of those fares they allow drivers to keep. While offering the option to tip would help to remedy that part of the situation, the company would still have to face down bad press, the uprising of multiple worker unions fighting for better conditions for Uber drivers, and managing the new business model. On top of that, the way that Uber works behind the scenes would have to be changed in most states; in most of the United States, tips are considered taxable income, and must be filed as such by both the employer and the employee. Since Uber is still embroiled in a series of nationwide legal battles over the employment or contractor status of their drivers, with many state courts reaching different decisions thus far and sending many cases to arbitration, the added income method could present some complications with bookkeeping.