Taxi Driver Online

This is about research in the USA, and don't normally bother with overseas stuff, but I suspect it's just as relevant to the UK.

And since I've just started using a credit card reader it rings a personal bell as well - see below.


Nearly two-thirds of Uber customers don’t tip their drivers, study says

https://www.theverge.com/2019/10/21/209 ... nber-study

A new report lifts back the curtain on Uber and tipping

Only 1 percent of Uber customers always tip, while nearly 60 percent never do, according to a new study from the National Bureau of Economic Research (NBER). The average tip is 50 cents a ride, but for those who do tip, the average is more like $3. Men are more likely to tip than women, but female drivers get tipped more than male ones.

Tipping has long been a source of fierce debate, especially as it relates to ride-hailing companies like Uber. For years, the company rejected efforts to add a tipping option to its app, arguing it would overly complicate the seamlessness of the experience. But Uber eventually caved and now drivers earn hundreds of millions of dollars in tips every year. The NBER study on tipping with Uber is sure to throw more fuel on the fire.

The paper was authored by Stanford University’s Bharat Chandar and University of California-San Diego’s Uri Gneezy, as well as John List, former chief economist at Uber who is now at Lyft, and Ian Muir, current head of economics at Lyft. The researchers were uniquely positioned: in addition to combining big data analyzation with field experimentation, the team actually helped Uber implement its in-app tipping option, which rolled out in June 2017. As such, they were able to develop data from more than 40 million trips.

What they found was not a whole lot of tipping. Roughly 16 percent of Uber rides are tipped. Yet, most riders (60 percent) never tipped over the research team’s four weeks of data collection. Of those who do tip, very few (1 percent) tip on every trip. The remainder of people only tip on about 25 percent of trips.

This is likely because of the unique aspects of app-based ride-hailing. All payments take place in the app and riders simply hop out of the vehicle when the ride is over. It’s only after the fact — sometimes long after the fact, depending on when you open the Uber app next — when riders are asked whether they want to tip. As such, the question of tipping is removed from the experience of the ride, Gneezy explained.

“I think Uber drivers are tipped less than taxi drivers because tipping happens after the ride is over and not face to face,” Gneezy said in an email. “In a sense, I think that this is the right way. Riders don’t tip automatically, but only if they are happy with the service. Hence, tips provide incentives to drivers.”

In an email, Chandar cautioned that the data was from 2017 and could be considered “stale.” “It is not obvious to me that getting people to tip more, on rideshare or otherwise, should be the goal,” Chandar said. “As we show in the paper, while tipping has some relationship with trip quality, it is also associated with other factors not evidently related to quality. Effects on earnings can also be ambiguous, as we show in our other paper released today.”

There were other interesting findings, such as riders who have a five-star rating tip more than twice as often as those with a 4.75 rating, and when they do tip they do it nearly 14 percent more. The team also noticed important correlations between gender and tipping:

Male riders tip 23% more than female riders, a result largely driven by the fact that men are more likely to tip than women (approximately 19% more often). Further, female drivers are tipped more than male drivers—a fact that is true regardless of rider gender: men (women) tip female drivers nearly 12% (11%) more than they tip male drivers.

Uber has a fraught history with tipping. It was reportedly Travis Kalanick, the former CEO and co-founder of Uber, that most fiercely rejected calls to add tipping. And it was only when Kalanick was about to be ousted from his job during Uber’s scandal-plagued 2017 that the company eventually caved and added the option.

Moreover, Uber sought to undermine the very notion of tipping. Uber published a post on Medium in April 2016 that went into greater detail about the company’s position on tipping. “Whether consciously or unconsciously, we tend to tip certain types of people better than others,” Uber said. “This means two people providing the same level of service get paid different amounts. With Uber, drivers know that they earn the same for doing the same trip, no matter who they are or where they’re from.”

The company cited a 2008 Cornell University study that found that “consumers of both races discriminate against black service providers by tipping them less than white service providers.” But it’s worth noting that the study predated the gig economy by several years. And now Uber has trained consumers to leave their cash at home, and that ratings, not dollars, translate into better service.

Uber has recently changed its tune on tipping. A year after making in-app tipping possible, the company touted the fact that drivers had earned more than $600 million in tips in the US and Canada. That number has risen considerably since then: according to a spokesperson, in the past two years Uber drivers and Uber Eats couriers have collected nearly $2 billion in tips. “We’re committed to developing and improving features that help detect and mitigate bias on our platform,” a spokesperson said.

Having just started using a card reader and watched the tips effectively disappear with card jobs, I would say it's not so much to do with the fact that any tip is added *after* the trip (as per Uber) but simply because the process is automated, but not entirely sure why that might be. Maybe because there's no change that the driver can be told to keep, although even when with a cash job there was an element of giving back change *and* keeping some as a tip, I would say the card thing has affected that too

Must have done about twenty to thirty transactions with the card reader before I saw a tip, and that was someone who said their dad was an HCD in Edinburgh, so I suspect that was a factor.

On the other hand, the vast majority of my card runs have been students, and they're notoriously bad tippers anyway, but I'm sure they're still even less inclined to tip by card than by cash.

On the plus side, I've stopped rounding down fares so much (eg £8.15 to £8), mainly because there's now no need to count out £1.85 in change in the near darkness, which was why I tended to round down, particularly on longer journeys - I'd never charge the 75p of a £30.75 run, say.

Have only done a couple of non-student card runs yet though, and they were longer negotiated runs, as I recall, so it's unlikely tipping would have been a factor with them anyway.

So whether the same trend will be evident once non-students start to use cards for bog standard runs I don't know, but I'm sure others on here might know a bit more about that.

(I'm using the iZettle Card Reader 2, and I know there's a tipping option, but I'm inclined to think that that's a tad brass-necked, and it's often difficult enough to get the thing to work in the first place, never mind further fannying around with the tip option.

Hasn't happened yet, despite a few close shaves, but I'm now more worried about not getting paid because of problems with the reader/declined cards etc than worried about runners, which are very few and far between here.)

I suspect that plays quite a part, i.e. those in the main using cards rarely tipped when they used cash.

Most airport jobs I do, when they pay by card, I get a tip, either added to the card or cash.

The Uber app, and I expect many other versions, allow for a tip to be added. The iZettle unit also allows a tip to be added if you want that option offered to punters.

But I suppose it's just something we are going to have to get use too.

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IDFIMH

I have used a card reader for a number of years now ,i doubt i have been tipped more than ten times in transactions.
What bothers me most is that drivers pretend they dont take card when its a short job . I would like our council to make it
manatory for card readers.

The way I see it the trade has two choices, much like with CCTV.

Either everyone gets on board and gets a card solution that works for them or at some point the council is going to make the decision for them and mandate a one size fits all system that isn't necessarily the best option for the driver.

I remember reading about how they implemented card payments in New York. They first mandated a single citywide card payment provider, with specific hardware mounted in every cab. They later got reports from the public, and their test purchases that the card readers would often be "broken" when it came time to pay for the ride. So they changed the rules such that if the card reader isn't working and the passenger wants to pay by card then they're under no obligation to pay. As if by magic all those broken card readers fixed themselves overnight.

Indeed, but as you know as well as me and everybody else reading, everyone in the trade *won't* get on board, so the councils will end up doing the job for us.



And suspect the card reader more likely to be broken on the £4 runs rather than the £40 ones

But the New York experience also underlines what a shambles it will be here, even if 10 years down the line all UK councils have mandatory policies. Of course, for a start it will be very messy getting there.

And each council will have different approaches, which will in turn cause difficulties, as with the current mishmash of policies on this, that and the next thing. For example, if some councils implemented a New York-style rule while others don't, then some passengers will use that as an excuse not to pay anything in council areas which don't have such a rule even if they didn't tell the driver they don't have cash.

As I said, I'm now more worried about not getting paid because of declined cards/technical problems than bog standard runners. But that's even when the customer is being honest. I'm envisioning more people trying to get out of paying one way or the other once cards and contactless become more like the norm

This is where the app based solutions shine. Pre-auth the card for the estimated amount and then finalise it at the end of the journey. Card readers need a way of doing this too.

Ultimately if you're going out of the local area I'm after money up front and card payments are no different. If you don't want to pay me now then what are the odds you'll want to pay be when we arrive?

I never use the tip facility but occasionally a passenger paying by card will state an amount to charge which includes the tip

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

I seem to get more card tips on airport runs than I do local ones.

Which really doesn't make sense.

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IDFIMH

I found that using the tip prompt on iZettle did result in a slight rise in tips, sometimes enough to cover the month's card charges. However, using the Beta update, which includes a payment link, the tip prompt has disappeared. Consequently, the level of tips has diminished drastically.

As a company, we have made card facilities compulsory in every car, although we haven't specified the system. Now, very, very few drivers attempt to avoid card payments. Those that do, and the fact reaches the ears of the office, are called in to explain themselves. Personally, I have often left the middle of a rank with a reasonable job because all those non-company cars in front of me refused to take card payments.

To me, it's another small running cost but is outweighed by the ability to accept a job where others don't.

Coincidentally, this afternoon, there is a discussion underway locally about how card charges can be recovered. My parting shot was that you can try in one of two ways:

1) Add a charge but expect to be hauled in by both the LA and Trading Standards.

2) Try a judicial review to determine the legality of the ban on charges. I think that would be a waste of time and money.

However, is anyone aware of a legal proceedings that have examined this issue?

And the courts cos it's now illegal to charge folks more for using a card.

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IDFIMH

You forgot option 3 - You can't. The entire ban on card charges is exactly to prevent this...

People don't take into account the costs of taking cash, you've got to go to the bank which takes time and thus is lost work, lots of business banks now charge your for depositing cash which is a direct cost. If I took more money on card I wouldn't have to be faffing around trying to get enough cash in the bank to pay for my cab finance, service plan and other direct debits.

I've always just used my personal account, these days just stick the notes into the machine, and it's in my account in seconds. No queues, no charges and free banking

Only problem is that there's only one branch in area I can do this in, and it's not always convenient getting there.

Better than the bad old days, though, when there were zero branches and I'd have to pay at another bank's branch to deposit cash.

Then again, I didn't have to do that very often, since the car was paid off for a few years and I paid most things in cash, even council tax and mortgage.


No doubt one day it'll almost all be done without cash, so complete change from when I started in the trade and did almost everything in cash

I used to do that, but I found life a lot better once I separated "company money" from personal money. Everything in my business bank is earmarked for something: tax, cab finanace, servicing, fuel and anything else it takes to keep the wheels turning. Once the finance is paid off I'll probably look to either selling the cab and getting a new one or renting it out and getting a new one (Chester requires all HCs to be new at first licencing). I'm rather hoping Ford get a hybrid Tourneo out by then.



Personally I find cash too easy to spend. I try to spend everything on card these days because I can look back through my bank statement and figure out where every penny went. With cash it's too easy to spend money that's earmarked for something else without realising it.