Uber, the ride-hailing company, has facilitated more than $600 million of payments in the form of tips to its drivers since it launched its in-app tipping service for drivers in 2017. According to a report, Uber had $50 million in tips in August, but that has grown since then. In May, it launched mid-trip ratings and tips, and that has driven a 30 percent increase in tipping, said Uber Product Manager Dhruv Tyagi.
Rival Lyft hit $500 million in tips facilitated in April, with the average tips increasing by close to 8 percent last year, compared to the year earlier. Lyft, noted the report, is operating in fewer markets than Uber — Lyft is in the U.S. and Canada while Uber has operations around the world. The report noted that Uber drivers are earning the most tips in Salt Lake City, Utah; San Antonio, Texas; Kansas City, MO; New Orleans, LA; and Nashville, TN. Lyft found that the most generous tippers were located in New York City, Atlanta, Detroit, Dallas, San Jose, Minneapolis, and Westchester County, NY.
In January, Uber reached a settlement with more than 2,000 New York drivers, agreeing to pay $3 million. Reuters— citing a federal court filing in Brooklyn, New York at the time — reported that Uber agreed to pay the $3 million to settle what was a proposed class-action lawsuit, brought on behalf of 2,421 drivers who contend the company took too many fees out of their fares.
The lawsuit alleged a breach of contract for adding sales tax and a fee to the total fare amount, which then boosted the number of service fees owed to the company. The drivers also claimed that Uber misled drivers with guaranteed compensation of $5,000 in the first month of employment. The settlement includes drivers who worked for the ride-hailing company starting from Dec. 29, 2009 and are not currently in arbitration with Uber. In May, Uber agreed to pay up to $80 million to 96,000 drivers in New York after admitting to not paying them enough.