As part of a campaign to turn around its image, Uber Technologies Inc. started allowing customers to tip their drivers using the Uber app. The company rolled out the option Tuesday in Houston, Minneapolis and Seattle, with plans to expand to every U.S. city by the end of next month.
Along with tips, Uber said it would introduce other changes for drivers, including new insurance plans and compensation for trips canceled more than two minutes after booking. It also said drivers would get paid more to chauffeur teenage passengers.
The changes are designed to appease drivers as the San Francisco-based company is under pressure from a steady stream of scandals and slipping market share at home. Lyft Inc., the primary U.S. competitor, said it has collected $250 million in tips since its founding.
Tipping is a major reversal for Uber, which had promoted the simplicity of paying without tipping. It had previously suggested that tips could be used to racially discriminate. Uber Chief Executive Officer Travis Kalanick, who is now on an indefinite leave of absence, had been a longtime opponent of asking customers for tips. Bloomberg reported in March that Uber executives were weighing whether to bend to public pressure and allow tips.
"Today's tipping announcement is an important win for drivers and proves that thousands of drivers coming together with one voice can make big changes," Jim Conigliaro Jr., founder of the Independent Drivers Guild, said in an emailed statement. "Cuts to driver pay across the ride-hail industry have made tipping income more important than ever."
One advocate for tipping at Uber was Jeff Jones, who was hired last year to be Kalanick's No. 2 and help turn around its image with drivers. But he faced internal resistance and left after six months on the job.
Uber has faced a string of scandals this year. Last Tuesday, the company shared the recommendations of a company investigation into workplace culture problems by the law firm of former U.S. Attorney General Eric Holder. More than 20 people were fired as part of a separate investigation by another law firm.
With Kalanick on leave after an exodus of top executives including his chief confidant, Emil Michael, the company is now run by a committee of 14 executives. They are looking to make swift moves in an attempt to turn around the company's image. The addition of tipping came as part of what Uber billed as "180 Days of Change."
"Why now? Because it's the right thing to do, it's long overdue, and there's no time like the present," Uber said in a statement. "This is just the beginning. We know there's a long road ahead, but we won't stop until we get there."
Garrett Camp, an Uber founder and board member, wrote an email Tuesday to employees trying to shore up morale. "Like many of you, recent events have left me upset and deeply reflective," he wrote. "But what matters now is that we know what needs to be changed. We must update our core values, listen better to employees and riders, and prioritize our drivers."
As the company has been addressing the treatment of its more than 14,000 white-collar employees, many of the company's drivers, who are independent contractors, have said they feel ignored and mistreated. A video published by Bloomberg in February showed Kalanick arguing with an Uber driver.
Business on 06/21/2017