The promise of a tip — that familiar 10 to 20 percent optional add-on for a meal or a ride — might be enough to lure Ryan Rich Moe into the driver’s seat for Uber again. He stopped driving for the popular ride-hailing service earlier this year because he was not making enough money. But Uber, which had resisted tipping for years, announced this week that it will start allowing the practice in some cities and then nationwide.
“That would get me back,” said Moe, who drives in Minneapolis.
Uber’s surprise decision to allow tipping is the latest twist in the nation’s conflicted and often ambivalent attitude toward paying just a little more for good service. The restaurant industry has seen a push by some toward no-tip policies, with mixed results. New technology, the growing prominence of the “gig economy” and changing views about which jobs qualify for tips have further clouded the propriety of a gratuity.
“Right now, it’s gotten very strange in the world of tipping,” said Michael McCall, a hospitality-business professor at Michigan State University. “Everyone is trying different things.”
Lyft, Uber’s chief ride-hailing competition, has for years boasted of its willingness to encourage customers to tip drivers, attempting to draw a cuddly contrast with Uber’s colder, more data-driven ways. But Uber had defended its previous decision as being in the interest of both riders and drivers, who, the company said, should “know for sure what they would pay or earn on each trip — without the uncertainty of tipping.”
It isn’t clear whether Uber’s decision to allow tipping will be used as a way for the company to pay drivers less per ride, with tips making up the difference. This concern was echoed by Paul Linnee, another Uber driver in Minneapolis, who said he picked up four riders one day this week after the tipping policy was in effect and could see how much each ride earned him but not whether a tip was included.
“One would have liked to see more transparency on how drivers are going to get these tips,” Linnee said. “If I got zero tip, tell me I got zero tip.”
Uber did not respond to a request for comment.
Deciding when to tip has become harder with the rise of mobile technologies that act as a pass-through between customer and server. Grubhub, which coordinates deliveries of takeout food, put out a cheat sheet for customers explaining when to tip and reminding customers that although computers handle the transaction, a person still has to make and deliver the food. Some food-delivery apps even allow users to tip before the order arrives. Grocery delivery service Instacart slaps on an automatic 10 percent “service” charge — plus the option of tipping — which then can be changed or removed by customers.
Technology also has helped servers earn more tips, thanks to payment systems such as Square and ShopKeep that present customers with the option to select suggested tip amounts ranging from 15 to 25 percent with just the tap of a finger. The option of “no tip” is often set off to the side, as if with disdain.
The role of tipping has been most fiercely debated in the U.S. restaurant industry, where an estimated $40 billion in tips trade hands each year.
The most vocal proponent of no tipping is Danny Meyer, who in late 2015 instituted the policy at his collection of high-end restaurants, including Gramercy Tavern, Union Square Cafe and the Modern. Menu prices were raised 20 to 30 percent as a result. Meyer argued that tipping reflected an antiquated system. He said that it was a move necessitated by fairness because kitchen staff, such as dishwashers and line cooks, did not always share in a customer’s generosity.
Although Meyer has stood by his no-tip policy, others have backed off their attempts to go gratuity-free. Joe’s Crab Shack became the first national chain to try it, in 2015, raising menu prices and eliminating tips. The experiment lasted six months. Executives said customers didn’t like it, and restaurant traffic plummeted. Earlier this month, the company behind Joe’s Crab Shack filed for bankruptcy protection.
Sometimes it’s the servers who don’t like the no-tip policy. Two San Francisco restaurants, Trou Normand and Bar Agricole, tried doing away with gratuities in 2015. Menu prices jumped 20 percent, with a line added at the bottom: “Service included.” The restaurants’ managing owner, Thad Vogler, heard only muted complaints from customers, especially men in their 40s to 70s, who seemed “upset at the loss of leverage over servers.” He ignored them.
But his service staff rebelled. Vogler estimated that his average waiter went from making $45 an hour on average with tips to $35 an hour. The higher menu prices went to raises for the kitchen and service staff. But Vogler said he felt that he was building a fairer compensation system and stronger restaurant team. He started losing staff to other restaurants. The no-tip policy lasted a year.
Melissa Leonard, an etiquette and protocol expert in New York City, said the new business models have made tipping more complicated. Most people learned tipping practices from watching their parents as they were growing up. But Uber didn’t exist a decade ago. Uber seemed like a taxi service, but until this week, tipping in the app was nearly impossible.
Leonard sees tipping as a way to say “thank you.” Today, the normal tip for good service is 20 percent, she said, with 15 percent for service that was okay and 10 percent if it was lacking.
“We are in a world that’s very service-oriented,” she said, “and you hope to get a good outcome when you tip.”