Should you tip your Uber or Lyft driver?

Traditionally, we have tipped our drivers, but Uber has changed the way we do things.

Lucy Nicholson/Reuters/File
A driver displays Uber and Lyft ride sharing signs in his car windscreen in Santa Monica, California, U.S. (May 23, 2016).

Ride-sharing services like Uber and Lyft have been a boon to lots of people. Especially for those of us who have tried to hail a cab in the pouring rain during shift change. Traditionally, we have tipped our drivers, but Uber has changed the way we do things.

The tipping culture is still strong, however, so the question persists among ValuePenguin researchers: Should you tip your driver?

Tipping Policies at Uber and Lyft

Some people assume there is a tip included automatically when you order and Uber, but that isn’t the case. And for many, this is part of the appeal of Uber.

Who even carries cash anymore? Not many of us. You don’t get rewards when you spend cash and it’s harder to track on whatever budgeting app you use. 

It’s also awkward to be fumbling around for cash in the back of a car when you’re worried about making your flight on time. While tipping your driver is not required, it is not against Uber policy for the driver to accept cash tips.

Tips are not included in Lyft payments either, but you do have the option to include a tip with your Lyft payment both at the time of the ride and up to 72 hours after. The tips are cashless, paid via your credit card, but 100% of the tip goes to the driver.

Uber and Lyft are the most well-known of the car-sharing services but they aren't the only players in the game. Via, currently only available in Chicago, Washington, DC and New York City, states that tips are not required or expected. Instead, they ask that you provide positive feedback for a driver you were pleased with.

Gett, which operates only in New York City, does allow tipping and drivers keep 100% of it. Juno, also only available in New York City right now, allows tipping and has an in-app tipping option.

Why No Tip?

The reason behind the no-tipping policy is that drivers are better paid than traditional taxi drivers, according to a 2015 TechCrunch study. But ride-sharing drivers are also using their own vehicles, and the average cab drivers are not. This means the driver is solely responsible for things like gas, insurance and maintenance on that vehicle. Tips would come in handy to help pay for those expenses.

As a consumer, tipping used to be reserved for wait staff in restaurants that are paid below minimum wage as a way to make up the difference. While we may not agree that it is the diner's place to subsidize the restaurant owner's payroll, we understand it.

But now we tip many service professionals: hair dressers, movers, baristas, nail techs and the mail carrier. The list goes on. But none of those people are making minimum wage. In some cases, they are making well over minimum wage.

The Dollars and Cents of Tipping

Aside from $5 promotions, the minimum charge for an Uber ride in New York City is $8. If you use Uber twice a week, hitting just the minimum, that is $832 per year. A 10% tip will set you back $83 per year. Many of us feel badly if we tip less than what has become the “standard” tip of 20%, so now you're looking at an extra $166.40 per year. Probably not going to break the bank, but a dollar is a dollar.  

Does the Tip Affect Your User Rating?

Uber drivers rate riders just as riders can rate drivers. And they will know if you tip or not and how much before giving you a rating. Lyft drivers rate you before they see if you've tipped.

Tipping might also concentrate drivers in wealthier neighborhoods because they expect better tips. This could leave poorer neighborhoods with fewer drivers willing to service them.

Should You Tip Your Driver?

There is no easy answer. Part of the appeal of Uber is that you don't have to worry about it. 

We think there are some criteria where you might consider tipping: a driver who goes out of his or her way to help you; maybe helps you load a heavy package into the car or loans you an umbrella; or perhaps gets you to the airport on time because he or she knew a shortcut.

But if it was a typical ride, you are not obligated to tip your driver. Not yet anyway.

This story originally appeared on ValuePenguin.

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