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Uber CEO Dara Khosrowshahi has weighed in on one of the gig economy’s most contentious issues: When customers should tip.
For gig workers driving people to the airport or delivering restaurant food, tips are sometimes the difference between trips with thin earnings margins and more profitable ones.
“Tipping is entirely optional,” Khosrowshahi said in an interview on CBS Sunday Morning. “But if you feel like you got a good ride, if the service quality was terrific, then you can tip through the app.”
“You should only tip if you feel you got your money’s worth and then some,” he added.
About 20% of Uber riders tip their drivers these days, though “that’s increasing,” Khosrowshahi said.
Customers often tip more frequently on food delivery orders than on rides through apps like Uber and Lyft, studies have indicated. One study released last year by data analytics company Gridwise said an estimated 90% of food delivery trips included a tip. For ride-hailing trips through Uber and Lyft, the figure was 28%.
Khosrowshahi himself has seen the ugly side of tipping culture on Uber. While making food deliveries undercover for the app, he has said that he ran into “tip baiting” — when a customer includes a tip when they place an order to make it more attractive for a gig worker to take and then revokes the tip after the worker agrees to the gig.
The option to tip has appeared in more places over the last few years. Some point-of-sale systems give customers the option to tip on takeout orders, for example.
Khosrowshahi said that ride-hailing riders, especially in the US, face a “pressure” and “expectation” to tip.
“But again, it’s really a personal choice that you’re making,” he told CBS. “That’s really up to you.”
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