# A theory on tipping I want to bounce off you guys



## FL_Dex (Nov 13, 2016)

I have an idea why pax are so reluctant to tip.

The headlines from 2014 were that Uber drivers were making $90,000 a year. That figure still gets batted around today. In 2014 Uber was facing a lot of regulatory challenges and that story was ammo for dealing with regulators. We provide jobs, good jobs, so let us operate here. And it attracted drivers...it still does. I'm sure there were people who quit crappy jobs thinking that, even if they made half that, they'd be doing great. It's not in Uber's interest for the earnings truth to come out.

How likely would you be to tip a waitress or bartender if you thought they were being paid $90,000 a year? Even if they made half that, like $40,000 or $45,000, you'd probably be thinking the drivers already make more than you do and for nothing more than driving a car around. If you get the car a little dirty, no big deal, for what they're getting paid, they can afford to have them cleaned. People who know business can do the numbers in their head but that's a small, small percentage of the population (apparently an even smaller percentage of Uber drivers). Add that to the whole "tipping is not necessary" shtick and it adds up to a significant behavioral barrier.

It would not register with most people that paying $9.58 for a 24 minute ride can't add up to $40,000 a year but they already have that misguided top level figure in their head and that was before the rate cuts. This from a BusinessInsider article:

_Granted, Uber hasn't revealed the median income for drivers across all of the 60 U.S. cities that it operates in, but the promise of a more efficient system has lured 20,000 new drivers to join Uber's platform every month since January. _​There's a reason they don't want to publish that information. And that's why pax think nothing of putting out a Pool or Line on a Friday night. They probably don't connect them saving a few pennies to that coming out of the pocket of someone who is already struggling.


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## wk1102 (Dec 25, 2015)

Uber doesn't promote tipping because it is of no benefit to them and could potentially cause some to not use the service. 

No other reason.


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## crazy916 (Jul 6, 2016)

wk1102 said:


> Uber doesn't promote tipping because it is of no benefit to them and could potentially cause some to not use the service.
> 
> No other reason.


My theory is Uber doesn't have tips because most states (if not all) require all tips to be paid to the person. Uber would not only not be able to take their 25% but would have to pay the credit card fee. If they were allowed to take 25% of the tips as commission you can guarantee tips would be an option tomorrow.


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## tradedate (Nov 30, 2015)

crazy916 said:


> My theory is Uber doesn't have tips because most states (if not all) require all tips to be paid to the person. Uber would not only not be able to take their 25% but would have to pay the credit card fee. If they were allowed to take 25% of the tips as commission you can guarantee tips would be an option tomorrow.


If the ride is already being processed with a credit card, would there be an increased CC fee for the added tip? Sounds like they would still just be charged for the one lump transaction.


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## FL_Dex (Nov 13, 2016)

>could potentially cause some to not use the service.

It doesn't keep people from going out to eat. Most of my pax either don't have a car, their car is in the shop or they're going to be drinking. A tip isn't going to change whether they use Uber or not. It's still cheaper than a cab and most people tip the cab driver.

Companies in industries with tipping are allowed to recover the CC fees. It's called the Texas Payday Law, which has been affirmed by the federal courts. It's also possible Uber doesn't want to get into tipping because it doesn't want to recognize that drivers are, in some cases, making less than minimum wage.


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## crazy916 (Jul 6, 2016)

tradedate said:


> If the ride is already being processed with a credit card, would there be an increased CC fee for the added tip? Sounds like they would still just be charged for the one lump transaction.


Most Merchant Agreements have a flat fee per transaction and a percent of the total. Normally this is between 2 to 4% percent depending on the credit card type with Amex charging the most.


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## wk1102 (Dec 25, 2015)

FL_Dex said:


> >could potentially cause some to not use the service.
> 
> It doesn't keep people from going out to eat. Most of my pax either don't have a car, their car is in the shop or they're going to be drinking. A tip isn't going to change whether they use Uber or not. It's still cheaper than a cab and most people tip the cab driver.
> 
> Companies in industries with tipping are allowed to recover the CC fees. It's called the Texas Payday Law, which has been affirmed by the federal courts. It's also possible Uber doesn't want to get into tipping because it doesn't want to recognize that drivers are, in some cases, making less than minimum wage.


They don't care if it's recognized that we make less than minimum wage... they spin it however they want.

There's no upside for Uber.to promote tipping.. only potential down side.

Happy drivers, in uber's eyes, doesn't matter.

There is no tipping simply because it could cause some people to stop using the service or receive bad service /backlash from drivers for tipping poorly or not tipping. That's it. Tipping could hurt business. Uber cares about uber...

NOTHING ELSE.

You're being naive if you think it has to do with anything else.


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## steveK2016 (Jul 31, 2016)

crazy916 said:


> My theory is Uber doesn't have tips because most states (if not all) require all tips to be paid to the person. Uber would not only not be able to take their 25% but would have to pay the credit card fee. If they were allowed to take 25% of the tips as commission you can guarantee tips would be an option tomorrow.


This is the true motivation.

Also, by adding a tip, it makes the trips look more expensive. Even if Lyft and Uber were price matched on the same pickup and destination, if you tip on Lyft, the statement for Lyft will appear more expensive than Uber. This gives Uber an advantage that afford them 90% market share in a city like Atlanta.


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## Oscar Levant (Aug 15, 2014)

wk1102 said:


> Uber doesn't promote tipping because it is of no benefit to them and could potentially cause some to not use the service.
> 
> No other reason.


No, the actual reason Uber killed the tipping culture, well, two reasons: 1. Keeps price down ( uber loves being cheap ) and 2, it helps to keep drivers treating everyone the same. ( whether it does is debatable, but it's one of the reasons ).


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## wk1102 (Dec 25, 2015)

Oscar Levant said:


> No, the actual reason Uber killed the tipping culture, well, two reasons: 1. Keeps price down ( uber loves being cheap ) and 2, it helps to keep drivers treating everyone the same. ( whether it does is debatable, but it's one of the reasons ).


Yes... more expensive = less rides.

Poor or non-tippers being treated badly means they will stop using the service. or lost riders...


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## DrivingZiggy (Jun 4, 2016)

And here I was thinking that the real reason is that Uber is trying to be cheaper than the competitors in order to drive them out of business. Then people would have to use only Uber and then Uber can add extra "fees" in there to collect from the rider and NOT pass on to the driver.


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## yeahTHATuberGVL (Mar 18, 2016)

wk1102 said:


> There is no tipping simply because it could cause some people to stop using the service or receive bad service /backlash from drivers for tipping poorly or not tipping. That's it. Tipping could hurt business. Uber cares about uber...
> 
> NOTHING ELSE.
> 
> You're being naive if you think it has to do with anything else.


Uber culture dictates a cashless, "tip included" mindset that it doesn't want to tarnish their brand. Too bad all the other actions they make tarnish the brand just fine. The days of upscale driver service are gone, and since we're not really contractors, they have no real impetus to allow tipping as an official option.

Everything about Uber says they don't /won't support tipping, so the only real way to combat it is for some other company to glom onto the realities of Uber, and get some corporate or political traction, or for Travis to step aside and let a finance man run the business of making actual money for the company.


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## yeahTHATuberGVL (Mar 18, 2016)

Oscar Levant said:


> No, the actual reason Uber killed the tipping culture, well, two reasons: 1. Keeps price down ( uber loves being cheap ) and 2, it helps to keep drivers treating everyone the same. ( whether it does is debatable, but it's one of the reasons ).


How would a non-tipper be treated different, other than a lower rating, which is arbitrary at best?


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## Oscar Levant (Aug 15, 2014)

yeahTHATuberGVL said:


> How would a non-tipper be treated different, other than a lower rating, which is arbitrary at best?


The theory is if there is no tipping everyone will be treated the same way, , whereas if there is a tipping culture then non tippers will be treated worse than tippers. That's the theory, whether or not it actually happens that way is debatable


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## crazy916 (Jul 6, 2016)

Oscar Levant said:


> The theory is if there is no tipping everyone will be treated the same way, , whereas if there is a tipping culture then non tippers will be treated worse than tippers. That's the theory, whether or not it actually happens that way is debatable


Yes that is how it should be. Non-tippers wait longer on average at bars. If you a habitable non-tipper and order from the same pizza place and even if you live right down the street, if the driver has multiple deliveries he will be stopping at your place last.


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## stodbob (Dec 14, 2016)

tipping in this format should be anonymous - done after the fact when they rate the driver..... it would just be a bonus at the and of the week- with zero knowledge as to where it came from- WTF is wrong with that? no awkward pressure on rider


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## stodbob (Dec 14, 2016)

tradedate said:


> If the ride is already being processed with a credit card, would there be an increased CC fee for the added tip? Sounds like they would still just be charged for the one lump transaction.


the merchant pays a percentage of the total - let uber take 1.5% off the top to cover this fee


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## crazy916 (Jul 6, 2016)

stodbob said:


> tipping in this format should be anonymous - done after the fact when they rate the driver..... it would just be a bonus at the and of the week- with zero knowledge as to where it came from- WTF is wrong with that? no awkward pressure on rider


What could go wrong. Think about how upfront pricing is handled. No transparency mean that driver will almost certainly not see all the tips they get.


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## FL_Dex (Nov 13, 2016)

wk1102 said:


> Yes... more expensive = less rides.


How do you know that? Uber was growing in big steps when prices were higher. Price resistance is not linear. Uber compared to a DUI, Uber compared to a cab, those rides will go on at higher prices.

You might lose some of the bottom feeders but those are people Uber is skimming from public transportation. Do you really want that part of the market? Uber will raise prices but they're not going to raise driver pay when they do.

Hey, we're neighbors!


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## wk1102 (Dec 25, 2015)

FL_Dex said:


> How do you know that? Uber was growing in big steps when prices were higher. Price resistance is not linear. Uber compared to a DUI, Uber compared to a cab, those rides will go on at higher prices.
> 
> You might lose some of the bottom feeders but those are people Uber is skimming from public transportation. Do you really want that part of the market? Uber will raise prices but they're not going to raise driver pay when they do.
> 
> Hey, we're neighbors!


Hi dee ho neighbor!

No, I don't want the bottom feeders but uber does, obviously.

Where in S fl?


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## FL_Dex (Nov 13, 2016)

wk1102 said:


> Where in S fl?


WPB area. It's great to meet other drivers from da hood.


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## wk1102 (Dec 25, 2015)

FL_Dex said:


> WPB area. It's great to meet other drivers from da hood.


I was down there today...

Im in psl but I get down that way a few times a week, my wife works off pga.


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## Mars Troll Number 4 (Oct 30, 2015)

I totally understand your theory, it might have merit. The original uber drivers were getting "Payments" that ended up being way way way above average pay in this country all without tips.


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## Stupid Loser (Feb 7, 2017)

I've thought about this, and I know the real reason. Fact is, Uber knows that many drivers start out every shift with a goal in mind (to reach $100 then go home, or $150, etc.) 

If tipping was as commonplace here as it is in similar service jobs (taxi driver, pizza delivery, bartender, etc.) then drivers would be hitting their daily goals a lot quicker and would log out and go home a lot earlier. This means less drivers on the road, less rides being taken, and therefore, less profit for greedy Uber. 

By discouraging tips, drivers are forced to stay on the road much longer to make the same amount of money that they would make if tipping was encouraged. This means more presence for Uber (pushing out competitors) and more overall trips for Uber to take their percentage from.

Just like everything else they do, the suggestion of not tipping is strictly for their own benefit. They do not, and never will, care about the drivers. We are treated as prostitutes to go out and make money for our pimps. They merely toss us a few scraps just to keep us going. I know that if there was a way that they could have a slave force working for free, they would do it. Uber is an absolute disgrace.


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## steveK2016 (Jul 31, 2016)

Stupid Loser said:


> I've thought about this, and I know the real reason. Fact is, Uber knows that many drivers start out every shift with a goal in mind (to reach $100 then go home, or $150, etc.)
> 
> If tipping was as commonplace here as it is in similar service jobs (taxi driver, pizza delivery, bartender, etc.) then drivers would be hitting their daily goals a lot quicker and would log out and go home a lot earlier. This means less drivers on the road, less rides being taken, and therefore, less profit for greedy Uber.
> 
> ...


When I make my earning goals, I have separate rate earnings and tip earnings. I won't call it early unless I far exceed both. Why call it early when you can make even more money, especially if it's turning into a good night?


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## RussellP (Dec 9, 2016)

The reason people don't tip is simple. Uber makes them think that a tip is included in the fare, and that the driver does get paid a tip. I've met so many pax who thought I was getting tipped automatically thru the app, and they were appalled. Uber always said tip was included in the fare, and they see a gratuity option in the settings that even though it only applies to UberTAXI, they dont understand when it says "Automatically apply a tip on your Taxi rides"... 

When I tell customers that we don't actually get paid tips, they're usually pretty upset because they thought all along they were tipping their driver. Passengers want to tip! They thing they are...

Don't just ask your pax for tips... make sure they understand that tips are not included! You'll help your fellow drivers next time.


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## Trafficat (Dec 19, 2016)

steveK2016 said:


> Why call it early when you can make even more money, especially if it's turning into a good night?


I agree. If the going is good that's all the more reason for me to stay out rather than go home. Some drivers may set a goal for making a certain amount of money and then go home when they reach it... well, personally, for me it is the opposite. As long as I'm making money I'm staying out, and the more money I'm making the longer I'm staying out. The main reason I would call it quits early is because of no pings or I am getting tired and worried about driving safely.

When drivers make less tips, I think it overall causes less drivers to be on the road, not more. I usually stay home between 10 AM and 4 PM because there is so little money to be made during those hours. If I'm out during that time, it is probably because I am bored, or I got a ping from my house.


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## Stupid Loser (Feb 7, 2017)

steveK2016 said:


> When I make my earning goals, I have separate rate earnings and tip earnings. I won't call it early unless I far exceed both. Why call it early when you can make even more money, especially if it's turning into a good night?


Sure, on a good night. But not every night is a good night. And both of those benefit Uber... drivers stay out longer either way! But at least when it's busy the driver is earning some decent coin.



Trafficat said:


> I agree. If the going is good that's all the more reason for me to stay out rather than go home. Some drivers may set a goal for making a certain amount of money and then go home when they reach it... well, personally, for me it is the opposite. As long as I'm making money I'm staying out, and the more money I'm making the longer I'm staying out.


That's you. Not all drivers have that luxury. Some of us do this full time and the slow nights are seriously depressing.

Some drivers have young children that they'd like to get home to sooner, or, some are simply exhausted and need to rest, but the fact that they haven't hit their goal yet (after 6 hours or so) forces them to stay out longer. And that sucks.

Personally, I believe that Uber should lower their cut to 15%, which would obviously be the proper thing to do (especially since now they have this new "upfront fare" scam which nets them even more profit), but commonplace tipping would help too. But, of course, neither one of those things would benefit Uber.



RussellP said:


> The reason people don't tip is simple. Uber makes them think that a tip is included in the fare, and that the driver does get paid a tip. I've met so many pax who thought I was getting tipped automatically thru the app, and they were appalled. Uber always said tip was included in the fare, and they see a gratuity option in the settings that even though it only applies to UberTAXI, they dont understand when it says "Automatically apply a tip on your Taxi rides"...


Of course that's why riders don't tip. But I'm explaining the reason why Uber encourages the riders to refrain from tipping. It's for their own benefit and it's obvious.

Another reason I believe they do this is because Uber has become so haughty and full of themselves that they see themselves as some powerful entity that can get away with throwing their weight around. They discourage tipping not only for the sake of keeping drivers on the road longer, but also because they don't like the idea of money changing hands between rider and driver without them getting a cut. Uncle Sam syndrome.


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## Stupid Loser (Feb 7, 2017)

Just think about it. There's absolutely no other reason for them to discourage tipping. None. It has to be about the money. Their money. Their bottom line.


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## Shangsta (Aug 15, 2016)

steveK2016 said:


> When I make my earning goals, I have separate rate earnings and tip earnings. I won't call it early unless I far exceed both. Why call it early when you can make even more money, especially if it's turning into a good night?


It goes both ways. When it's surging I don't log off but when it's not I definitely stop at my goal. I don't want to punish my car unnecessarily. I use Uber to supplement my income, once I have done that I don't need to beat my car any further for base rates. Plus I don't mind other drivers getting a piece of the pie.

Now if it's surging and it's easy money. Yes I am with you and keep going.


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## Doowop (Jul 10, 2016)

The same cheapskates who stiff uber drivers would not think of leaving a restaurant without tipping the waitress, or throwing a buck on the bar after the bartender pops open a bottle of beer, or, well you get the picture. These low lifes prefer to rely on ubers BS about tips to alleviate guilt. As adults we make 
up our own minds whether or not to reward good service. We no longer need our parent's or Ubers permission.


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## Jagent (Jan 29, 2017)

Doowop said:


> The same cheapskates who stiff uber drivers would not think of leaving a restaurant without tipping the waitress, or throwing a buck on the bar after the bartender pops open a bottle of beer, or, well you get the picture. These low lifes prefer to rely on ubers BS about tips to alleviate guilt. As adults we make
> up our own minds whether or not to reward good service. We no longer need our parent's or Ubers permission.


Exactly. I picked up a guy from Europe and drove him to his hotel. It was his first time in the USA. He spent 5 minutes asking me how much percentage to tip here at bars and restaurants. Then he didn't tip me. Lol..

. I got thanked and asked if there was a way to request me, plus 5 stars. No tip. People think Uber includes the tip.


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## steveK2016 (Jul 31, 2016)

To be fair, do you feel guilty not tipping the McDonald's staff? Uber is the McDonald's (cheaper) alternative to the Steakhouse (Taxis) where tipping is customary. I don't like it, but that's the perception Uber created.

At the steakhouse or bar, they know they're more than likely going to see that wait staff again if they intend to go back there in the future. In a major city, the likelihood of getting the same Uber driver is slim to non. Many tip so they don't get treated poorly on their return trips, so if there's no reasonable expectation that they'll see that person again, they aren't as inclined to tip.

That's my theory on why many don't tip.

Only thing you can do is find ways to integrate tips into conversations. Tipping signs help, I definitely recommend Tablet Tipping signs. They pay back dividends!


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## BurgerTiime (Jun 22, 2015)

I worked at a new high-end hotel years back (front desk manager) and they denied tips to all employees. They had a "no tip policy" and were told not to accept tips when offered. Even the valet and bartenders were not not allowed to accept tips.
The owners thought it was "caddy". The hotel had the highest turnover rate for any establishment in the city. More than fast food restaurants. This went on for about 2 years.
Then the hotel was sold and the new owners looked at why the staff didn't last. The average length of stay was 3 months!
They instated a tipping policy and just like that, employees length of stay quadrupled. They saved time, money and reputation.
Income sored and staff were happier.
Tipping is in our culture. Especially in hospitality.
Uber has 1-a reputation problem, 2-very high turnover rate and 3-an unwillingness to address these problems.
The end result is a junk product.
Uber on, suckers! (I quit Uber and now only LYFT) full disclosure, lol


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## brendon292 (Aug 2, 2016)

FL_Dex said:


> I have an idea why pax are so reluctant to tip.
> 
> The headlines from 2014 were that Uber drivers were making $90,000 a year. That figure still gets batted around today. In 2014 Uber was facing a lot of regulatory challenges and that story was ammo for dealing with regulators. We provide jobs, good jobs, so let us operate here. And it attracted drivers...it still does. I'm sure there were people who quit crappy jobs thinking that, even if they made half that, they'd be doing great. It's not in Uber's interest for the earnings truth to come out.
> 
> How likely would you be to tip a waitress or bartender if you thought they were being paid $90,000 a year?


I actually agree with you. The number of passengers I encounter who genuinely believe I'm making good money is astonishing. I'm sure in their mind they believe tipping is necessary since they think I'm earning a nice, comfy, middle class salary.


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## Stupid Loser (Feb 7, 2017)

Doowop said:


> The same cheapskates who stiff uber drivers would not think of leaving a restaurant without tipping the waitress, or throwing a buck on the bar after the bartender pops open a bottle of beer, or, well you get the picture. These low lifes prefer to rely on ubers BS about tips to alleviate guilt. As adults we make
> up our own minds whether or not to reward good service. We no longer need our parent's or Ubers permission.


I agree with that, too. I'm constantly blown away by the amount of passengers who get in my car and openly talk about how much they tipped the bartender, tipped the doorman, tipped the DJ, etc., and then get out of my car without tipping me.

Or, sometimes I'll pick up some rich snob who brags about his 6 or 7-figure salary and proceeds to blather on about all of his upcoming projects and how great his investments are paying off, then proceeds to exit the car without tipping. Seriously? You have all that money and you couldn't slide this poor bastard a couple of bucks? For some strange reason, society just loves to dump on Uber drivers. I guess because they've been conditioned to do so.



steveK2016 said:


> To be fair, do you feel guilty not tipping the McDonald's staff?


I don't eat trash like McDonald's, but when I go to better fast food restaurants like Chipotle or Subway, I ALMOST ALWAYS do toss at least one dollar into their tip cup, sometimes two. The only time I don't tip is when the employee has a bad attitude or they stiff me on portions, both of which are rare.


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## fiver360 (Mar 5, 2017)

I just started driving. I took my first uber trip not that long ago too, maybe two months ago? I didn't tip. I thought it was included in the fare which looking back now is stupid but for some reason it's what I thought. 

So far from the limited pax I've talked to including one who was considering driving but currently has a 2 door, they were under the impression that were making bank lol. Common theme I hear is "gotta get that hustle on somehow eh!"

Yeah I guess, but when 10-12 minute rides equate to $7 in cities overwhelmed by drivers, it doesn't really seem like there's much you can do to improve your bottom line except stay out later, drive more dead miles, etc all things that just end up cutting into said bottom line.

Not trying to complain, my point is that most pax are still conditioned by those "Make 35/hour" ads that were everywhere, still think tips are included, and all around think this is an easy side job which I don't think it is anymore.


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## Fuzzyelvis (Dec 7, 2014)

steveK2016 said:


> To be fair, do you feel guilty not tipping the McDonald's staff? Uber is the McDonald's (cheaper) alternative to the Steakhouse (Taxis) where tipping is customary. I don't like it, but that's the perception Uber created.
> 
> At the steakhouse or bar, they know they're more than likely going to see that wait staff again if they intend to go back there in the future. In a major city, the likelihood of getting the same Uber driver is slim to non. Many tip so they don't get treated poorly on their return trips, so if there's no reasonable expectation that they'll see that person again, they aren't as inclined to tip.
> 
> ...


How many people at McDonald's have to buy the cooking equipment, the registers, pay rent and insurance on the building?

Many drivers are making minimum wage, or far less, after expenses. McDonald's employees are guaranteed minimum wage, and with no investment and far less risk.


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## steveK2016 (Jul 31, 2016)

Fuzzyelvis said:


> How many people at McDonald's have to buy the cooking equipment, the registers, pay rent and insurance on the building?
> 
> Many drivers are making minimum wage, or far less, after expenses. McDonald's employees are guaranteed minimum wage, and with no investment and far less risk.


I'm not saying I like it or think its right, but that is the perception they are intentionally making. Will it succeed like the fast food revolution did to food service industry? I hope not. I like my tips.

I know and understand it is very market dependent, but this last Saturday it was finally surging again in Atlanta.

I also get that full timers will have a much harder time, it's unfortunate. Uber in Atlanta is far from great rates at $0.75/0.12 but it's possible when you work hard at surges and tip generation.

Not everyone is created equally, those that can learn how to maximize their earnings will always do better than those that just go online and drive.


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