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 TLC Backs Requiring Uber to Offer Cashless Tipping

April 20, 2017 
By Steven Wishnia

New York, NY - After a nine-month campaign by a union representing Uber drivers, the New York City Taxi and Limousine Commission has agreed to develop a rule that would require ride-hail apps to offer an in-app tipping option.

“The TLC intends to propose rules that are platform-agnostic to ensure that all passengers are able to tip drivers seamlessly, regardless of whether the ride was booked using an app or calling a base,” commission general counsel Christopher Wilson wrote in a letter to Machinists District 15 President James Conigliaro Jr. Apr. 17.

Such a rule, the Machinists-affiliated Independent Drivers Guild said in a statement, “would force Uber, the app with the largest market share in the city, to conform to industry standards.” It estimates that enabling passengers to tip drivers through the app would gain drivers who work for ride-hail services $300 million a year.

“Drivers have long been denied access to the kinds of benefits and labor protections many workers take for granted, such as paid sick leave or the minimum wage. As a result, New York City’s professional drivers have traditionally depended on gratuities for a substantial portion of their income. Cuts to driver pay across the ride-hail industry has made tipping income more important than ever,” Conigliaro said in the statement. “The exploitation of ride-hail drivers must end, and this is an important first step.”

Uber driver Luiny Tavares said he left his job as a dispatch manager to drive for Uber when it first came to New York in 2011, believing he could make more money. “They led riders and drivers alike to believe that the fares would cover the gratuities that always made up a big part of driver pay, but that’s not what happened,” he said in the IDG statement. “In the years that followed, pay cuts stacked up and I found myself having to work longer hours away from my family to make the same money I did when I started.”

The IDG began its campaign for an in-app tipping option last summer and filed a petition for the TLC to establish a rule to require it in February. At a TLC hearing on the proposal Apr. 6, 55 drivers testified in favor.

Among app-based services, only Lyft and Gett currently have a tip option. Juno passengers can tip only if they give the driver a five-star perfect rating. Uber and Via don’t offer any tipping option, except for when people use the Uber app to hail yellow cabs—or if the passenger wants to give the driver cash. Uber says tips are not “expected or required,” and the company is reluctant to put a tip option in the app because “riders tell us that one of the things they like most about Uber is that it’s hassle-free.”

Once the TLC drafts a rule, it must be certified by the city Law Department. A 30-day period for public comments follows, and then the TLC Board of Commissioners holds a hearing on the proposed rule. If the board votes to approve the rule, it must be recertified by the Law Department and published in the City Record. It becomes effective 30 days after that. The process usually takes about 90 days.

“This rule proposal will be an important first step to improve earning potential in the for-hire vehicle industry, but it is just one piece of a more comprehensive effort to improve the economic well-being of drivers,” TLC Commissioner Meera Joshi said in a statement. The TLC adds that it’s part of “a larger process to bring some of the income protections provided to yellow taxi drivers to the for-hire world. In the medallion taxi industry, the TLC is able to protect what part of the fare the driver is entitled to and specific rules about what additional costs can and cannot be deducted from the fare.”

City Council Transportation Committee chair Ydanis Rodriguez (D-Manhattan) said in a statement Apr. 17 that he is planning to introduce a bill “to ensure all riders are able to tip their drivers, regardless of which company brings them to their destination,” because app-based drivers “should not be kept from receiving a tip by credit card, like their fellow drivers in the taxi market.”

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