Combatting the dark side of Uber
Let’s face it: whenever it’s time to go out to dinner in Central West End or head out for a night in St. Louis, you’re probably going to call an Uber. It’s a cheap, fast alternative to traditional local taxi companies. Unfortunately, Uber is making it harder for its employees to make a livable wage.
Contrary to popular belief, Uber does not include tips in the fare when you ride. Since the company likes its users’ experience to be cash-free (you pay with a credit card through the Uber app), they adamantly state that tips are not required for rides. Uber cars are already “nicer and cleaner” than taxis, as the Huffington Post argues, and many drivers make it easy for their customers to tip by carrying Square credit card readers. In addition, Uber is so much cheaper than a taxi that tipping on your fare will still leave your wallet happier than if you’d used a St. Louis taxi company.
So why tip? Simply put, Uber is not lucrative employment for the majority of its contractors. A software company that supports “on-demand workers” gathered data on the average hourly wages of Uber drivers. The data indicated that state averages range between $8.80 and $11.00. Even if you take more optimistic estimates from Glassdoor (at roughly $15.00 per hour), that number is still much lower than Uber would like you to think. Uber may tout an average full-time salary upwards of $90,000, but clearly its employees are living much closer to the poverty line. What they don’t tell you is that this statistic comes from Uber’s most lucrative market: New York City. And even then, the numbers don’t hold up: Business Insider completed an investigation in New York and found that Uber drivers there are also struggling to make minimum wage.
On top of these inherent salary pressures, the company does not pay for their drivers’ car maintenance, gas or even for their phone bills. These additional costs are incurred frequently and must be considered an additional expense whenever an Uber driver is on duty. Worse, there are the publicized price cuts that Uber implemented in early 2016 to drive demand for their service. While these cuts are great for consumers, they are hitting Uber drivers hard. The Observer has reported that some drivers are now “making as little as $2.89 per hour” with these cuts. Uber argues that the increase in demand will help drivers, but in reality, to make up for these wage cuts, drivers would need “to increase their productivity by 45 percent.”
It would be easy for us to continue to ignore the struggles that Uber drivers face, but there’s a simple step we can take to do our part to support the drivers that make on-demand transportation possible: tipping them. Ultimately, it is not in our interests to protest a massive transportation company (since Uber is cheap and the best form of transportation for locations not near Metro stations). Nor is it in the interests of drivers—many of whom need Uber for the additional income. The stopgap solution is to improve drivers’ earnings above the measly levels shown in national data sets by giving them tips, which end up directly in their pocket.
An Uber ride to the airport costs roughly $20. After Uber takes its 20 percent cut and the drivers pay for their expenses, they may only end up with $15 of that fare (if not less). By tipping $4 to $5, we can directly help Uber employees make up for the increasing costs they face as well as for the price cuts forced upon them by their parent company. And it’s still cheaper than taking a taxi, which costs, at minimum, $25. In other words, any dollar you spend nets an Uber driver roughly $0.50 to $0.75 (depending on how you value expenses). A small tip can be nearly as valuable as the fare of a quick trip and could make a huge difference in improving the actual earnings of Uber drivers.