Uber Reaches a Tipping Point with Its Drivers

ALICIA STARKO
WALL STREET JOURNAL BLOG – MKTG

May 9 ,2016

                Uber Reaches a Tipping Point with Its Drivers

                              

The Wall Street Journal reports Uber Technologies Inc.’s settlement of a class action suit opens the door to tipping the ride-hailing company’s drivers, but some customers might not want to pony up the cash. Unlike its competitor Lyft, Uber has always provided a seamless, cashless experience for its customers. Gratuities have been a sticking point between the $62.5 billion startup and its drivers, whose fares are determined by a base rate that is grossed up to reflect duration and distance of rides. Uber takes a cut of the fares, usually 20%-25%. The new agreement would allow Uber drivers to post discreet signs in their cars stating that tips aren’t included in the fare, a small but significant step that could rankle some of the company’s established customers. Tipping may hurt the experience of using Uber as It will feel like a cab service. The whole beauty of riding in an Uber is you get in and you get out and you don’t have to deal with the hassle of physical currency.