Tipping Your Uber Driver is Illegal in 13 States

I don’t like tipping generally, and detest the spread of American tipping culture around the world. Although when I travel abroad if I fail to tip in some instance where it’s recently become expected I figure the local will just think I’m British.

My usual practice is to ’round up’ with taxis, to tip 20% in restaurants in the U.S. and 10% abroad unless there’s a service charge added to the bill in which case I’ll round up, and not to tip in Japan. Though there are local nuances to all of this of course.

One of the things I love about Uber is that it’s seamless, push a button and a car arrives. When you make it to your destination you get out of the vehicle. When I take a taxi now I almost forget I have to pay at the end of a ride, rather than just having the billing happen automatically.

In Austin we’ve lost Uber (and Lyft) but fortunately I find that Fasten is a pretty good substitute, except during periods of peak demand, no one has managed to develop software that’s as stable as Uber’s platform (pretty much all of the Austin substitutes crashed during South By earlier this month).

Lyft embeds a tipping function in its app, while Uber does not. However Uber no longer advertises that tips are ‘included’ and allows drivers to solicit for tips. I’m not going to add the stress of cash, proper change, and the awkward friction at the end of a ride. Others take a different view.

I don’t like tipping but there’s no reason why it ought to be illegal — except to varying degrees it is in 13 states including Michigan, Pennsylvania and Virginia!

Over the last three years, 13 states have passed laws restricting cash payments in some form. While none of the laws explicitly mention gratuity, there’s widespread agreement that most — if not all– of these rules apply to cash tips. Supporters of these rules have said they’re inspired by driver safety concerns. Each state’s restrictions are a little different, with some only banning the solicitation of payments and others banning any cash changing hands.

The idea behind the ban supposedly is to protect drivers from themselves, that carrying lots of cash makes them a target. I don’t believe that’s the real purpose, I respect drivers to handle their own cash in any case.

Banning cash transactions prevents individuals from working ‘off network’ without electronic payments set up or working through a service like Arcade City, reducing competition for Uber, Lyft and similar services. Hence the cash tipping ban is apparently part of model legislation shopped nationally by lobbyists.

The idea is spreading, and similar rules are under consideration in New York and Texas. The New York rule (which doesn’t apply to New York City) would fine drivers $50 for soliciting tips, though allows passengers to offer tips unprompted.

Some of these rules require transportation network companies to tell drivers to refuse tips. Uber does not comply with this requirement.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. As someone who uses Uber a lot in Chicago, the benefit to me is that the price is the price. If the price isn’t enough for a driver to make money…then drive more or find another job. I know that sounds a bit cold, but if the Uber experience becomes the same as a cab, whats the point of Uber at all? I don’t hear the drivers complaining when the surge is 2x or 3x for no apparent reason.

  2. Uber’s business practices and it’s obnoxious CEO, are causing Uber to lose customers. I use Lyft because they have so many promotions that make the ride cost less. Lyft’s drivers are more pleasant than Uber’s. Until Uber changes its ways, it’s Lyft for me.

  3. How much do you want to bet that the vast majority of people reading this article (myself included) are secretly hoping that their own state is on the list, as a convenient excuse to feel a little less guilty whenever they opt not to tip their uber drivers?

  4. @Tom, no secretly hoping at all. I’m damn glad I live in a tip-less state (Virginia). An expected tip, is no tip at all as far as I am concerned. If it’s not a worthy wage, it’s darn clear to the driver up front — so they shouldn’t take the fare. While it is BS that Travis recategorized Lexus as an UberX, undermining the tip-less model is way more stupid. Charge more, or don’t, but don’t put me in an awkward position, or muddy the convention. A better solution would be to have an incentive pool that used rank, or some additional measure of customer happiness and distributed those funds accordingly to the driver’s. The only scenario I’d feel comfortable with is a bitcoin tip sign, without any announcements or expectations.

  5. The USA tipping culture does suck (employees should be paid for what their jobs are worth) and I hope the practice of not-tipping Uber drivers prevails.

    I personally think you should not tip 20% in restaurants. It massively over-compensates the servers vs. the other employees in the restaurant — and other employees holding similar level jobs. Almost every other country that tips thinks 10% for waiters is adequate. We won’t get back to 10%, but 15% is more than reasonable.

  6. From the UBER website FAQ on Ride:

    Do I need to tip?
    The Uber app cannot include a tip when billing you for a trip fare. Where available as a vehicle option, uberTAXI is an exception. uberTAXI connects riders with licensed yellow cabs, and includes the option to set a gratuity percentage added to your trip fare. In most cities, Uber is a cashless experience. Tipping is voluntary. Tips are not included in the fare, nor are they expected or required. As a rider, you are not obligated to offer your driver a gratuity in cash. If you decide you would like to tip, your driver is welcome to accept.

  7. Interestingly enough, even the Bloomberg article linked doesn’t include a list of the states…

  8. Tips do NOT reward the worker when it is EXPECTED. When they have to work for it then it works but now the work feels they DESERVE the tip just for showing up. Why do I have to tip the server at Dunkin Donuts? Do they do EXTRA work putting my donut into a bag? NOPE Does the taxi / uber/ lyft driver do extra work because of a tip? NOPE

  9. Good morning!

    I have a quick question from an expert within the travel hacking world!

    I have opened an AMEX SPG business card in the past using my SSN. I have recently started a new business and have gotten an EIN number. Can I open another SPG business card with the EIN and get the bonus again?

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  10. People understand, I’m not going to quit working for Uber because I’m upset for not getting tips, the customer will be rated low; once they get down to three stars, they still get their account deactivated anyway. Most Uber drivers rate their customers low for not tipping. So it’s going to be a battle between customers and riders, on top of that people shouldn’t make jobs where tips compensate for their money if the customer is a asshole and don’t want to leave something. I suggest people take a taxi or eat at home if you’re not going to Tip it’s common courtesy in his commonsense, The whole point of working in that environment is to receive tips!!!!!!!!

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