Business

Uber adds option to tip drivers as it heads in a new direction

An Uber car drives through LaGuardia Airport in New York. Uber is enabling passengers to tip its U.S. drivers with a tap on its ride-hailing app for the first time. (AP Photo/Seth Wenig, File)
An Uber car drives through LaGuardia Airport in New York. Uber is enabling passengers to tip its U.S. drivers with a tap on its ride-hailing app for the first time. (AP Photo/Seth Wenig, File)

For the first time, Uber is allowing passengers to tip its U.S. drivers with a tap on its ride-hailing app, part of a push to recast itself as a company with a conscience and a heart.

In a series of changes announced Tuesday, Uber also said it will be charging riders by the minute if they keep an Uber car waiting for more than two minutes. Uber will also be reducing the time that riders have to cancel a ride in order to avoid a $5 fee from five minutes to two minutes after summoning a driver. All options will allow drivers to make more money, the ride-hailing giant said.

The tipping option, long available in the app of arch rival Lyft, will become part of its app in the Miami area and all other U.S. cities by the end of July. Other features will roll out in August, including a driver destination feature first tested in Miami that enables drivers on the way to work or home to easily pick up riders going the same way, said Kasra Moshkani, general manager of Uber Florida.

Moshkani also noted that for South Florida, one of Uber’s largest and fastest-growing markets with more than 10,000 drivers, the changes will take affect as the new Florida law that regulates ride-sharing on a statewide level, rather than on a municipal basis, goes into effect July 1, making it easier for drivers to do business, he said. July 1 will also be when Uber will begin servicing Key West, a popular destination for South Florida locals and tourists alike, Moshkani said,

The attempt to smooth over Uber’s sometimes testy relationship with drivers is part of a broader effort to reverse the damage done to Uber’s reputation by revelations of sexual harassment in its offices, allegations of trade secrets theft and an investigation into its efforts to mislead government regulators.

“These drivers are our most important partners, but we haven’t done a very good job honoring that partnership,” Rachel Holt, regional general manager for Uber in the U.S. and Canada, told the Associated Press. Holt is part of the leadership team running Uber with CEO Travis Kalanick on a leave of absence.

The expanded earnings opportunities are the first step in what Uber is billing as “180 days of change” for its U.S. drivers. Holt declined to describe what is planned during the rest of the campaign.

Holt said the company talked to thousands of drivers while listening to plenty of complaints before making the moves to boost drivers’ incomes. Uber also is trying to make it easier for drivers to transfer their earnings into personal accounts more quickly. It’s also allowing more drivers to designate the routes that they want to travel to keep them closer to a preferred destination.

Uber has business reasons to improve its image. The widespread publicity about the company’s bad behavior threatens to turn off drivers and riders alike, giving them incentive to switch over to Lyft instead.

A backlash like that could deepen Uber’s losses, which totaled $2.8 billion last year alone, threatening to make the company less valuable to investors. Uber was valued at nearly $70 billion the last time it raised money.

Nancy Dahlberg of the Miami Herald contributed to this report.

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