- Dennis Dinkel, 75, drove for Uber and Lyft for four years in California and Arkansas.
- He said that tipping was hit or miss and that most riders didn't tip at all.
- Drivers told Insider riders should tip and that Uber was partly to blame for low tips.
Dennis Dinkel hoped the gig economy would help him supplement his Social Security income. But the 75-year-old said the tips — or the lack thereof — were disappointing.
He told Insider it's among the reasons he quit and had no plans to return after driving roughly 20 hours a week for Uber and Lyft in the California Bay Area and Arkansas.
He said tipping was hit or miss and that the majority of riders didn't tip. Dinkel said he's no longer able to access his ride-hailing accounts because of inactivity but provided Insider a document to verify that he worked in the gig economy.
When he tried delivering food for Uber Eats, he said the pay wasn't worth the time and hassle of traffic.
"I finally got it delivered, and the customer said, 'I'll tip you on the app.' Uber paid me about $7 — and the customer left no tip. I never drove for food delivery for Uber Eats after that," he said.
Dinkel isn't the only gig worker who's found tipping to be sparse.
On a recent weekday, for example, a full-time Dallas Uber driver drove just over three hours for Uber Eats and made five deliveries, according to documents viewed by Insider. The driver spoke on condition of anonymity to avoid professional repercussions.
He earned roughly $20 in total — $12 from the base fare and about $8 in tips he received on three of the five deliveries. While the tips may look generous as a percentage of the base fare, that base fare is just roughly $4 an hour.
Delivery drivers say tips have been getting smaller since the beginning of the pandemic, The New York Times reported in a story that received over 3,800 comments in the first 48 hours after publication. Some commenters said drivers shouldn't expect the same tips as the waitstaff at restaurants, while others said they shouldn't be responsible for paying these workers a living wage.
Insider spoke with several ride-hailing and delivery drivers, each of whom pushed back on many of the arguments made by the commenters on the Times story. But many drivers added that they understood why customers tipped the way they did and argued the companies behind these gig apps had contributed to a culture of bad tipping.
Drivers pointed to three factors — a lack of knowledge about driver pay, rising fare prices, and entrenched customer habits — each of which they said were causing customers to tip less and could be traced to decisions made by these companies.
Alix Anfang, an Uber spokesperson, told Insider that tipping had increased since 2020.
"On the rides side, tipping frequency and the average tip on a trip roughly doubled over the last two years," Anfang said. "Food delivery has always had a high tipping rate, but the average tip on a delivery increased even further by about 20%."
In recent years, Anfang said Uber has taken steps to encourage higher tips, including allowing riders to tip during a trip — in addition to after — and moving the tip selection prompt up in the app, as well as reminding riders of inclement weather to encourage higher tips.
Lyft did not respond to a request for comment.
Drivers say riders don't understand how much of the workers' income comes from tips
The debate over how much riders should tip has one major flaw, Dinkel said: "People who use ride-share delivery are under the mistaken impression that the company pays drivers a livable wage."
While Uber, for instance, has said that some of its drivers earn as much as $40 an hour before expenses like gas, many drivers have said they earn much less than that.
"One reason I think passengers didn't tip was because they figured, 'I paid $25 for this ride, and the driver is probably getting $20 of that fee,'" Dinkel added. "Uber and Lyft should educate their passengers that the driver barely makes enough to pay for gas and that the drivers deserve to be tipped."
An Uber or Lyft rider can't see how much of their payment is going to the driver. If they knew the real number, Dinkel said, some customers might be more inclined to give a more generous tip — which most gig workers are able to keep 100% of.
In January, three Colorado Democrats introduced a bill that would require ride-hailing and delivery apps like Uber and Lyft to show customers how much of their payment goes to the driver and how much the company takes.
The average percentage Uber takes from ride or delivery fares rose from 20.1% to 27.8% for ride-hailing in the fourth quarter of last year compared with the prior year, according to the company's quarterly earnings report. The Uber Eats take rate rose from 18% to 20.5%. Uber has voiced opposition to the Colorado bill.
Marcelo, a 61-year-old Uber Eats and DoorDash driver in Corpus Christi, Texas, said: "If people think that tips are supplements, they can certainly conclude that they can eliminate them, but unfortunately, tips are not supplements."
Chris, a 28-year-old Uber Eats driver in upstate New York, said: "Uber has successfully convinced customers that drivers get paid way more than we do."
The two drivers' last names are known to Insider but were withheld to protect their privacy.
Ride-hailing apps have raised prices, making riders less inclined to add a tip
Ride-hailing companies have taken some steps to raise prices over the past few years to increase profitability and help drivers offset elevated gas prices.
While the number of Uber rides and delivery trips rose by 20% from fiscal year 2021 to 2022, the company reported, its gross bookings — the total value of fares and deliveries excluding tips — rose 28%.
The Uber spokesperson said government-imposed fees had been influencing prices. In April 2022, for instance, these fees accounted for over 18% of riders' payments, Anfang said.
Sergio Avedian, a 55-year-old Uber and DoorDash driver in the Los Angeles area, said fare increases were making some riders more resistant to tipping.
"I feel like the consumer goes, 'OK, gosh, I just took a 5-mile trip, cost me $25 on Uber or Lyft. I really don't have room to tip this poor guy,'" he told Insider. "In the old days, we used to get tipped more because the trips were so cheap and people would throw $5 or whatever."
Drivers also said some of customers' poor tipping habits could be linked to decisions Uber made several years ago. In-app tipping wasn't even an option for Uber riders until 2017, roughly five years after Lyft rolled out the feature. Uber's former CEO Travis Kalanick, Fortune reported in 2017, was resistant to adding a tipping feature because he thought it would add friction to the in-app user experience and didn't want riders to feel guilty for not tipping.
"Consumers have been trained, basically, not to tip when it comes to ride-share," Avedian said.
Ultimately, Dinkel said he believed "tips" stood for "to insure prompt service." Given a service is being provided, he said every passenger should tip their driver. He said he always tipped at least 20% whenever he took an Uber, Lyft, or cab.
"If a rider wants service, they should tip for it," he said, adding: "Do you tip a cab driver? And do you tip a waiter who takes a food order?"
Are you a gig worker willing to share your story about pay, schedule, and tipping? If so, reach out to this reporter at jzinkula@businessinsider.com.
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