# CRAIN'S NEW YORK: Uber driver's need tips as much as any service worker



## Retired Senior (Sep 12, 2016)

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NEWS › Technology
March 6, 2017 12:01 a.m. Updated 03/06/2017
*Uber's no-tips-expected policy comes at a cost*

*The ride-hailing giant has pioneered a streamlined, gratuity-free service that appeals to riders. Drivers may feel differently*







By Matthew Flamm 
  

Photo: Buck Ennis
Tipping is ingrained in American culture-and Uber drivers say they need it to make ends meet.

For the vanguard of the restaurant fair-wage movement, tipping is a thing of the past. And not the glorious past. "It goes back to slavery days," said Saru Jayaraman, a restaurant workers' advocate (and a _Crain's _40 under 40 honoree). Jayaraman has been a leader of the no-tipping movement. She cites Pullman train porters and restaurant workers who were former slaves required to live on tips, not wages.

But for many Americans, tipping is almost like breathing, only with a little more anxiety. People standing in line at a coffee shop feel compelled to tip even before they've gotten their hands on their triple-shot half-skim latte.

"Tipping in the U.S. has so many dimensions," said Priya Raghubir, chair of the marketing department at the NYU Stern School of Business, who added that the practice often isn't rational. "People will routinely tip a cabdriver but won't tip the person who makes up their room in the hotel, because they never see that person."

The one exception to the tipping phenomenon appears to be Uber-which also considers tips outdated, like the paper money its users never have to touch. The company has built its business on the ease and seamlessness of its experience, and that's one reason it's resisting the demands of the Independent Drivers Guild, which represents more than 40,000 Uber drivers, to put a tipping function on the company's app.

The guild's leadership says its campaign is about fair wages, and that if wages-meaning fares-went up, tips wouldn't be such an issue. But fares will not be going up, as Uber CEO Travis Kalanick explained to a driver in a recent videotaped encounter (that ended with him swearing at the driver for disagreeing with him). "We have competitors," the billionaire executive said. If the company hadn't cut fares, it would be out of business, he added.

But unlike with Danny Meyer, who has employees, Uber is not paying its drivers-who are contractors-an hourly wage.

That's why for some drivers, it's not much fun helping Uber lead the country into a tipless future.

"Uber just created this culture," said Sohail Rana, an Uber driver in New York who has been in the driving business for 23 years. "People will give the hotel doorman 20 bucks just to put their luggage in the trunk but won't tip the driver if he does the same thing."

A version of this article appears in the March 6, 2017, print issue of Crain's New York Business.


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