Uber will also introduce other changes, including driver compensation for cancelled trips. Photo / 123RF
Uber will also introduce other changes, including driver compensation for cancelled trips. Photo / 123RF
As part of a campaign to turn around its image, Uber Technologies started allowing customers to tip their drivers inside the app.
The company rolled out the option Tuesday in Houston, Minneapolis and Seattle, with plans to expand to every US city by the end of next month.
Along withtips, Uber said it would introduce other changes for drivers, including compensation for trips canceled more than two minutes after booking and new insurance plans.
It also said drivers would get paid more to chauffeur teenage passengers.
The changes are designed to appease drivers as the San Francisco-based company is under pressure from a steady stream of scandals and slipping market share at home. Lyft, the primary US competitor, said it has collected US$250 million (NZ$345m) in tips since its founding.
Tipping is a major reversal for Uber, which had promoted the simplicity of paying without tipping. It had previously suggested that tips could be used to racially discriminate.
Uber Chief Executive Officer Travis Kalanick, who is now on an indefinite leave of absence, had been a longtime opponent of asking customers for tips. But Bloomberg reported in March that Uber executives were weighing whether to bend to public pressure and allow tips.
"Today's tipping announcement is an important win for drivers and proves that thousands of drivers coming together with one voice can make big changes," Jim Conigliaro Jr., founder of a quasi-union Independent Drivers Guild, said in an emailed statement.
"Cuts to driver pay across the ride-hail industry have made tipping income more important than ever."
One advocate for tipping at Uber was Jeff Jones, who was hired last year to be Kalanick's No. 2 and help turn around its image with drivers. But he faced resistance internally and left after six months on the job.
Uber has faced a string of scandals this year. Last Tuesday, the company shared the recommendations of a company investigation into workplace culture problems by the law firm of former US Attorney General Eric Holder. More than 20 people were fired as part of a separate investigation by another law firm.
With Kalanick on leave after an exodus of top executives including his chief confidant, Emil Michael, the company is now officially run by a committee of 14 executives. They are looking to make swift moves in an attempt to turn around the company's image. The addition of tipping came as part of what Uber billed as "180 Days of Change."
Cuts to driver pay across the ride-hail industry have made tipping income more important than ever.
"Why now? Because it's the right thing to do, it's long overdue, and there's no time like the present," Uber said in a statement. "This is just the beginning. We know there's a long road ahead, but we won't stop until we get there."
Garrett Camp, an Uber founder and board member, wrote an email Tuesday to employees trying to shore up morale. "Like many of you, recent events have left me upset and deeply reflective," he wrote. "But what matters now is that we know what needs to be changed. We must update our core values, listen better to employees and riders, and prioritise our drivers."
But as the company has been addressing the treatment of its more than 14,000 white-collar employees, many of the company's drivers, who are independent contractors, have felt ignored and mistreated. A video published by Bloomberg in February showed Kalanick arguing with an Uber driver.
In it, the CEO said in a huff to a black car driver in San Francisco, "Some people don't like to take responsibility for their own s---. They blame everything in their life on somebody else. Good luck!"
