AP Photo/Damian Dovarganes
- Uber and Lyft drivers often struggle with low or infrequent tips, which many rely on to pay bills.
- Ride-hailing drivers earn below minimum wage in major cities, even with tips, UC Berkeley found.
- Delivery drivers often receive higher or more frequent tips, partly due to American tipping customs.
Chris Yandell, a 35-year-old full-time Uber driver in Oklahoma City, has mixed feelings about his passengers.
He loves interacting with people, he told Business Insider, but it's "a real struggle to pay rent" with his ride-hailing income, and he said few passengers tip. He considers ride-hailing drivers similar to restaurant servers, as both provide a service, but he said many passengers don't see it this way.
"Riders more often than not leave my car in a better mood than when they got in — they do say thank you with a smile on their face and give a 5-star rating," he said. "However, they very rarely leave a tip."
Data suggests drivers for ride-hailing companies like Uber and Lyft get tips much less frequently than delivery drivers. According to an analysis of over 500,000 US gig drivers provided to BI by Gridwise, a data-analytics company that helps drivers track their earnings, roughly 28% of Uber and Lyft ride-hailing trips get tips, compared to 87% of food-delivery trips and 74% of grocery trips. The analysis was based on US tipping data between January 1 and June 6.
As the pay model for gig driving shifts, poor tipping is one of the main driver frustrations with Uber and Lyft. Some drivers are questioning whether the gig is worth it. After all, many earn below the local minimum wage — and they could be earning more tips by switching to food delivery. Drivers' frustrations have led some to quit their gigs — and others to push for higher guaranteed pay.
Some drivers told BI they increasingly rely on tips, especially when some drivers are growingly reporting rides at or below $3.
Business Insider asked gig economy experts and drivers why food delivery drivers get more generous tips than ride-hailing drivers, what's preventing some people from tipping, and what Uber and Lyft could do to boost customer tips.
Historical tipping norms, inflation, and high ride prices can influence tips
Carla Bevins, an associate professor of business management at Carnegie Mellon University, thinks food delivery drivers are more likely to get tips than ride-hailing drivers because tipping for food-related services has "long been a part of American culture."
"In contrast, rideshare services, though equally valuable, do not have the same historical tipping expectation and are often viewed as more transactional," she told BI via email. For both ride-hailing and food delivery, she said the digital tipping process via phone reduces the social pressure to tip.
Some ride-hailing drivers said they noticed tipping declining throughout the pandemic. Some said inflation may have eaten away at many passengers' wallets, making them less likely to tip, while others said people's appreciation of essential workers through generous tipping has withered away.
Others blamed the companies, noting that passengers may be less likely to leave an additional tip as ride prices increase.
Deborah, who takes multiple Uber or Lyft rides a day, said as fares increase, it's more challenging to dig into her pockets and give generous tips — though she still tips on every ride.
"Some of us are everyday workers and employees living from paycheck to paycheck. We have families and children to feed as well," Deborah said.
Still, the major ride-hailing and food delivery companies argue that tipping is robust and on the rise.
In a statement, Uber told BI that over the last four years, ride-hailing tipping frequency and the average tip size have both roughly doubled — adding that the average ride-hailing tip amount rose nearly 10% over the past six months. For food delivery orders, the average tip amount increased roughly 35% over the past six months, the company said.
Uber said this is because of changes to the app that encourage tipping. This includes allowing passengers to tip during the trip and moving the tip selection prompt above the ratings prompt. For Uber Eats, suggested tip amounts vary based on order size, and customers are reminded of inclement weather to encourage tipping.
In the second half of 2023, Lyft said the median US Lyft driver earned about $31 per hour of engaged time — when they were en route to pick up a passenger or had one in their vehicle. The company said these earnings included a median tip of $2.41 per engaged hour.
A Lyft analysis of passenger tipping published last July found that airport pickups and dropoffs "resulted in twice as many tips as non-airport trips."
DoorDash said 80% of Dashers have other income sources, and 90% spend under 10 hours weekly on delivery. Still, DoorDash said it's encouraging tips through in-app notifications for customers, warning them that their food may take longer to arrive if they refuse to tip. The vast majority of customers tip, DoorDash said, adding that the notification pilot resulted in significantly fewer $0 tips.
"Dashers go above and beyond everyday for their communities, which is why we've made it easier than ever for customers to show their appreciation by leaving a tip at checkout, during delivery, or up to 30 days after delivery — all directly in the DoorDash app," a DoorDash spokesperson told BI.
Uber and Lyft drivers rarely get tips
Steve, who asked to use a pseudonym for fear of professional repercussions, has driven for over five years in Los Angeles and said he's been increasingly reliant on tips. Some days, he waits one or two hours before getting a ride going his direction, so he said tips are helpful to make up for dead periods.
However, tips are few and far between, even when he offers good service and helps passengers with luggage. He suspects one of the reasons for low tipping rates is that years ago, Uber did not encourage tips.
When Uber first started, there was no tipping option. In 2016, Uber's public policy team noted, "we felt it would be better for riders and drivers to know for sure what they would pay or earn on each trip — without the uncertainty of tipping." Uber further wrote tipping was "not included, nor is it expected or required."
Though Uber has added in-app tipping and provided a simpler tipping interface, Steve said many people may still be conditioned to not tip ride-hailing drivers. He added the lack of tips has been "demoralizing," leading him to reject more rides and consider pivoting to another industry.
Erskien Lenier, 66, is about to quit driving for Uber and Lyft and pivot to freelance diet and fitness coaching. The Riverside, California-based driver started almost nine years ago after working long hours in the car industry. While he could make $2,000 to $3,00 a week pre-pandemic, he now struggles to make above $900 a week working similar hours.
He said he's recently received more tips than ever before, sometimes $50 to $60 a day, from starting engaging conversations with passengers about his passions for health and fitness. He said he has more control over receiving tips with Uber X than Uber Eats, where he doesn't interface with the customer.
"I try to set myself with the mindset of I'm out here to have a good time, make some money, make some friends, and get home safe," Lenier said.
However, his tip amounts have fallen with his earnings, and it's not sustainable, especially as he gets older. So far this week, he's made $567.17, only $30.68 of which came from tips.
Tipping isn't so smooth for delivery drivers, either
Alex, a DoorDash driver in Texas, said he only takes orders that will give decent tips. Sometimes, this means refusing to complete a delivery if he predicts he'll get a bad review, which could hurt tips. In the last 30 days, he said his acceptance rate fluctuated between 20% and 30% while maintaining a 4.9 customer rating and 98% completion rate.
He estimates two-thirds of his income comes from tipping, noting that he would not be able to survive on base pay alone. While he gets tips on most rides, he said he's dealt with tip baiting — when people take their tips away after he accepts the orders. He's also seen more $1 tips after DoorDash implemented its notification pilot.
It's taken him a few months to figure out the best strategies for maximizing tips, such as driving later at night when there's less competition and traffic.
How Uber and Lyft can influence driver tips
Erin Hatton, a professor of sociology at the University of Buffalo, told BI via email that ride-hailing companies can "strongly influence tipping practices by setting standard tipping amounts in the app for customers to choose from."
Price hikes can also discourage tipping.
"During surge pricing on Uber, for example, a customer could think twice about adding a tip on top of an already increased fare," Carnegie Mellon's Bevins said.
Bevins said that the perception of gig driver pay, driven by various factors such as media coverage, could impact how much people tip. The more people think they're reliant on tips, the more generous they might be likely to be. She said Uber and Lyft can do more to raise awareness about the impact tips can have on drivers through educational campaigns.
Other recommendations included reminding passengers during checkout that "100% of your tip goes to your driver" and reminding customers to tip immediately after the ride.
For some gig drivers, there's a lot at stake over the future of tipping.
"As for any tipped employee — but particularly those who are not guaranteed a minimum wage, let alone a living wage — tips are a crucial source of income," Hatton said.
Are you a gig driver who is struggling to make ends meet? Reach out to these reporters at nsheidlower@businessinsider.com or jzinkula@businessinsider.com.