Tue, Oct 22, 2019

Only One Percent of Uber Passengers Tip Every Ride

A new study from the National Bureau of Economic Research has found that Uber passengers have an extremely low rate of tipping their drivers, with only one percent tipping every trip.

The study was conducted by Uber’s former chief economist John List, Lyft’s head of economics Ian Muir, Stanford University’s Bharat Chandar, and University of California-San Diego’s Uri Gneezy. The team found that only 16 percent of all Uber rides are tipped, with more than 60 percent of the passengers never tipping at all. Only one percent of riders tip every time — the remaining group will tip roughly one in every four trips.

Explaining the low tipping rate, Gneezy said: “I think Uber drivers are tipped less than taxi drivers because tipping happens after the ride is over and not face to face. In a sense, I think that this is the right way. Riders don’t tip automatically, but only if they are happy with the service. Hence, tips provide incentives to drivers.” Some other findings in the study also show interesting correlations. Five-star riders tend to tip more than twice as often as those with a slightly lower 4.75 stars, and will also tip a larger amount. Gender also seems to influence the process: the team found that male passengers tipped 23 percent more than female passengers, and female drivers tend to be tipped more than male drivers, regardless of the gender of the rider.

Chandar adds that he doesn’t believe Uber should be encouraging riders to tip more: “It is not obvious to me that getting people to tip more, on rideshare or otherwise, should be the goal,” he said. “As we show in the paper, while tipping has some relationship with trip quality, it is also associated with other factors not evidently related to quality.”

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