The entire value and convenience propositions of using Uber could soon be out the window as it's becoming increasingly obvious that drivers would like to be getting cash tips, and as Uber announces today that they're contemplating cutting the allowable wait time from five minutes to two minutes meaning drivers can charge a fee if you don't find the car and get in it within 120 seconds. As CNet reports, the company is testing out the two-minute limit in New York, New Jersey, Dallas, and Phoenix right now, and it's all in an effort to cut down on drivers' unpaid time.
Fair enough, however I'd argue that the company should simply be paying drivers more and they just coughed up $100 million in order to avoid, for now, a legal battle over whether drivers ought to be deemed employees and not contractors. Not to mention the fact that "tip is included" was a promise from the outset that now appears to have been a lie, or at least an early policy the company has quietly tried to disown in the last year or two. As part of that same settlement last week, as the Wall Street Journal reports, Uber agreed to soften its stance on tipping and allow drivers to post signs in their cars telling passengers that tips aren't included and implying that cash tips would be welcome, since the app still does not allow for electronic tipping the way Lyft does. Already, anecdotally, tipping Uber drivers in cash is pretty commonplace in Los Angeles, even though drivers still aren't allowed to ask for tips. And as we learned in SF recently via SFist's Eve Batey, regular tipping gets you much closer to a perfect 5.0 rating.
So, pretty soon we can say goodbye to the days of smoothly jumping in and out of Ubers without the hassle of fumbling with wallets, realizing you don't have correct change, and dealing with the awkwardness around that whole exchange arguably one of the cornerstones of Uber's success in stealing business away from the traditional taxi industry. Uber made us all feel like we could travel our cities, cash-free, in luxury and you may recall the company's original, now abandoned, tagline was "Everyone's Private Driver."
Cutting the wait-time limit to two minutes is less egregious, however it's another sign that major growing pains are arriving for this very fast-growing company, and they're finally giving in to demands from their underpaid legion of drivers. In general, I'm always out the door or on the curb and getting in the car in about a minute, however there are those times when I call a car from home on a weekend evening, they show up faster than I expect them to, and it takes me an extra couple minutes to get out the door and down to the street. If I now have to pay a fee for that extra minute or two, AND get lower ratings and passive aggressive remarks if I don't have any cash for a tip, I will finally have reached my limit when it comes to drawbacks in using the app not the least of which could be encountering a sketchy driver who nonetheless passed a lax background check.
I predict backlash over the tipping thing will finally encourage them to add a tipping function within the app, and one can assume prices won't stay so low for too long either, meaning that UberX rides won't be any cheaper than traditional cabs. And as apps like Flywheel come along to let you more easily hail those cabs, Uber's market share could finally take a hit.
And then what happens when labor lawyers decide to file a class-action suit in a labor-friendly city to declare drivers employees? The business model, as Uber knows it, could be on some very shaky ground in the coming years.