Uber drivers file class-action suit over tips

http://www.sfgate.com/business/article/Uber-drivers-file-class-action-suit-over-tips-4778315.php

by ubasu • 13 years ago

43 61 13 years ago

revelation• 13 years ago

Why can you sign away your right to legal recourse in some contract, one that you sign on your phone with a swipe of a finger? That's ridiculous.

enneff3• 13 years ago

I hope Uber can succeed in taking a stand on this. Tips are terrible for both consumers and workers; the only beneficiaries are the employers, who get away with underpaying their employees. And most of the world agrees. Why is North America so slow to realise this?

bilalq• 13 years ago

Agreed. I travelled overseas this summer, and what I miss most was the tip-free culture. It was so refreshing to know exactly what something would cost you. When I go into a cab or a restaurant in America, the bill at the end always seems to be a mystery. It's a very anti-consumer condition.

reuven2• 13 years ago

I just spent two months living near Chicago, and I have to agree. The fact that taxes (city + state + county) and tips aren't included in prices means that the amount you really spend isn't at all obvious until it comes time to pay. It was quite maddening.

Tipping is virtually unheard of in Israel (except a standard 10% in restaurants), and all prices are required to include tax. So if the taxi meter says that you need to pay 15 shekels, you can be sure that this is the price.

IvyMike2• 13 years ago

Tips give the server a motivation to get customers served and out the door faster: The chance to work more customers and thus acquire more tips.

This is obviously good for the employer but may also be good for the consumer, if they are in a hurry.

rictic• 13 years ago

This is an empirical claim: namely that tipping results in better service.

The evidence I have seen does not favor this hypothesis: http://freakonomics.com/2013/06/03/should-tipping-be-banned-...

aphelion• 13 years ago

This seems like a good time to point out that every study of tipping I've come across fails to find this sort of incentive effect.

enneff3• 13 years ago

The only difference I've noticed between service in North America and that in Australia is that I get iced water and the bill at the end really fast in North America. Everything else is more or less the same.

frank_boyd• 13 years ago

Why is North America so slow to realise this?

It's part of the culture. And culture has always been an extremely inert thing. Decades are often needed to correct major problems that are anchored in it.

Probably the most effective way to get rid of the tipping culture would be for a majority of business owners to visibly declare:

"No tipping allowed. We pay fair salaries."

Does a business owner have a clear economic incentive to do this? No. At most an ethic one. And maybe there's a tiny bit of PR value in it.

omegant2• 13 years ago

Being spanish I don't find necessary to forbid the tips. Here if you are halpy with the service you let a couple euros, if it's a large bill something more, but it's not mandatory and the waiters are not going to look bad at you for not doing it. Every time I go to the states I find anoying that the waiter or the taci driver are counting every cent I let them, and that there is the possibelity to have a dispute over that. I'll rather have the quantity declared on the total of the bill and avoid that tense situation. I don't get how you can separate the food from the service, it seems like if the restaurant service were provided by random guys that just happen to be there that day, and not by proper employees. I know it's not like that but I can't avoid getting that sensation when I have to pay.

saraid2162• 13 years ago

It's part of the culture.

It's the same culture that feels individual charity is the best way to deal with poverty.

(And also there's this wonderful subset of this culture that feels that it's clever and thoughtful and generous to leave a Bible verse instead of a tip.)

fragsworth• 13 years ago

the only beneficiaries are the employers

Customers who don't tip also benefit.

jarofgreen• 13 years ago

Um ... but Uber isn't "taking a stand on this". If the lawsuit is correct, Uber is just conning the customers into thinking the drivers get tips then stealing them. Just because you think tips are a bad payment mechanism, it doesn't follow that what Uber is doing is right.

(never used Uber so no judgment on if the lawsuit is correct or not)

cheald• 13 years ago

The two times I used Uber, there was a single flat fee paid with no mention of a tip. The driver and I never discussed payment; it was all handled via the interwebs. Given that one of the perks of Uber is the "no fumbling with the credit card at the end of the ride", it would be rather divergent from the whole experience to be tipping separately.

I wouldn't have much of an issue tipping if it were via the same payment mechanism, though. Feels weird not to after years of taking cabs.

enneff3• 13 years ago

You misread the article.

It's Uber's black car drivers that are annoyed because they don't get tips, while Uber's Taxi drivers get a built-in 20% tip. The black cars are Uber's flagship product, run the way they want it run (fair pay without tips). The Taxi system includes a tip because no taxi driver would accept a fare that didn't include a tip. But—the taxi drivers still earn less than the black car drivers.

signed02• 13 years ago

That article is somewhat confusing. The issue isn't that Uber doesn't allow tips, it's that when a person does decide to tip , Uber takes 50% of it.

Here is a much better writeup: http://www.theverge.com/2013/8/28/4668504/uber-lawsuit-san-f...

I've used the app several times and I've never been prompted to enter a tip. Maybe it's a new feature?

Edit: After reading a few more sources I think the issue is that every fare has a built in 20% tip, but Uber takes half of it. Another source: http://www.businessinsider.com/uber-drivers-open-lawsuit-ove...

kevingadd• 13 years ago

I took an Uber black car to the airport a couple days ago and there was not any UI for tipping. I looked to see if I could add in a tip; it's a flat fee for the ride. How can they take 50% of something that doesn't exist?

nine_k• 13 years ago

"20% built-in tip but Uber takes half of it" sounds very much like "10% built-in tip", and even more like "Uber pays ~9% of the sum for each ride directly to the driver".

This whole thing sounds crazy and confusing.

BTW, I do tip cab drivers, in direct proportion to their performance: taking fast routes, driving smoothly, etc. Usually I just pay the tip in cash.

chc• 13 years ago

Is that really the case? Would Denny's really be paying servers $20 an hour if not for tips?

dsymonds• 13 years ago

Yes, because otherwise no-one would work there.

brianmcconnell2• 13 years ago

I have a lot of friends who work in the service industry. All of them complain about their tips being skimmed off credit card transactions by the owner. Every single one.

Tips = Commission. Stop conflating it with a bonus for kissing your ass. It's an incentive to hustle and get orders filled.

venus3• 13 years ago

Don't understand this attitude at all.

Tips are nothing but a demeaning way to tell low-status workers that the value of their time is arbitrary and their livelihood is always subject to whim. Do you tip your doctor? Do you tip anyone with a high-status job? Of course not.

Tipping should just be abolished. Set a price and charge it. Pay people fairly and consistently so they can feel secure and plan for the future. Anything else is just sneaky.

brianmcconnell2• 13 years ago

I guess you don't get out much, or haven't run a service business. The concept is variable cost of labor. If you're a bartender working a busy shift, you can pocket several hundred dollars off dollar a tip drinks.

What do you think would happen if tips were abolished? The owner would increase their wage a tiny bit. Who do you think will be working that job then?

jrockway• 13 years ago

I don't understand why this is an issue for the courts rather than one for the market. If you can make more money not driving for Uber, don't drive for Uber?

Noxchi• 13 years ago

These workers could have ties with taxi companies (and they're being paid to bring on the lawsuit), or they want to take advantage to get more money.

chilldream3• 13 years ago

Informed consumers is one of the assumptions of a free market, and the lawsuit alleges that Uber is lying to consumers.

badass• 13 years ago

People love Uber because it's disruptive and it's better than taxis. But, the future is not Uber. The future is any car owner becoming a taxi. I have a ride; you need a ride. Why shouldn't this be? There can be services that track reputations of both drivers and passengers and travel arrangements can be taken care of through a central service as well. Taxi monopolies are archaic and need to die. Uber is a transitional service but it is certainly not the final answer to the current way of things.

eksith• 13 years ago

That can be both good and bad. Good because you get a ride very quickly. It's bad because you have no idea...

  * Who your driver is
  * How long h/she's been driving
  * If there's a camera in the taxi (for your own protection)
  * Whether that's being monitored or just disconnected
  * How well the car is being maintained
  * Whether the driver has insurance and actually knows how to get to your destination
  * Whether h/she's from New Jersey (I kid, I kid... mostly).

Taxis are regulated, ideally, for this reason. I think drivers should have the right to apply to become a taxi driver, but then they have to maintain certain standards -- especially safety, competence and fee structure -- or what we end up would be an order of magnitude worse than what we have.

mtrimpe• 13 years ago

The future is actually externally-verified personally signed data systems, which could cover most of these fairly easily.

x0054• 13 years ago

It's funny, this is the way it used to work in Ukraine back in the day. You would step out, wave down a car, basically any car. They would stop for a second. You say where you are going, if its on the way, they would tell you a price. You get in and you are on your way. Maybe it's different time and society, but that system used to work well.

zhte415• 13 years ago

This is hilarious. Good hilarious. I live in small time small city China. Usually I'd take a taxi to work, and sometimes there are no taxis. So I'd hail down a chap and persuade him to drive to my workplace. This is not disruptive, the future is the past, it is normal life.

error54• 13 years ago

I've noticed many companies have this "tips included" built into the price which I think is a poor practice. Tips are supposed to be a way to reward excellent service and incentivize the employee to work hard. Having worked in a restaurant for 6 years I always tip well but I can say that honestly, I've had several experiences where the person didn't earn a tip. If you're going to include tips into the price, just pay them a flat salary and be done with because a mandatory tip isn't a tip at all, it's a surcharge.

jbjohns3• 13 years ago

All a tip is is employers tricking you, their customer, into paying their personnel costs (often upwards of 4/5ths of it!) directly. You don't "incentivise" someone to work hard by paying them the money they're actually owed by law [1].

[1] In the US, restaurants don't have to pay minimum wage unless the tips don't reach minimum wage (in which case, the company will make up the difference and then fire the employee for performance). The worst I've heard of was a working in an $8/hr state getting $1.20/hr.

timdev2• 13 years ago

You'll be paying those personnel costs either way. In a tipless society, your entree would just cost more, and the server would get their hourly regardless.

People like servers and drivers have an opportunity to provide extra value beyond their purely mechanical function. A culture of tipping allows the consumer to reward that extra effort, at their option.

That said, I do agree that 15-20% as a tip for 'standard' service is just silly. If I owned a restaurant, I'd want to hear about it if a customer was unhappy. When the customer can just stiff the server on their tip and leave, it gets harder to identify which workers need retraining/replacement.

lifeisstillgood2• 13 years ago

That's ridiculous - minimum wage is minimum wage. Performance incentive is performance incentive.

Were the unions asleep when that law got written?

silencio• 13 years ago

I own a restaurant in California. CA is one of the states in the US where it is illegal for employers to use tips towards paying at least minimum wage. (Had to double check, so here's a source: http://www.dir.ca.gov/dlse/FAQ_tipsandgratuities.htm)

Not that I condone doing such a thing...it's a pretty sleazy employer that'll do such a thing.

nodata• 13 years ago

I always tip well

and there lies the problem.

lifeisstillgood2• 13 years ago

I am amazed by the well, anti-union, line being taken here.

Über is just trying to break into a regulated industry - and that means breaking regulations.

Regulations are usually what is imposed after the fight is over - and taxis have gone thru a long period of controversy, legal disputes and often criminal behaviour to get where the regulations are now.

Über will cause some change (285m will guarantee that) but in the end there will be new regulations cementing the status quo. And since everyone realises there will be a new status quo, everyone who has a brain will pile in now and make sure their slice of the pie is as big as possible at the end.

Über does not deserve to win just because it started the fight.

hershel• 13 years ago

I agree with you. Uber doesn't deserve to win just because they started the fight.

But Uber toghter with Google, have the potential to dramatically change how transportation is being done.

They could start a shared taxi/van service on demand which at that scale could compete with cars on price and performance(at least according to some researchers and the finish kutsuplus public transportation service).

But in order to try that, at least some regulations should be revoked, at least temporarily.

Of course, that doesn't mean user should cheat drivers out of wages.

philip1209• 13 years ago

The system seems completely transparent and unequivocal. If contractors sign up knowing that there are no tips, then there is no logical reason for them to expect tips.

girvo• 13 years ago

They get tips. 20% of the fare is a tip, but Uber takes half of that.

I don't understand tipping (I'm from Aus) so whether this is kosher is beyond me.

danmaz74• 13 years ago

On the contrary, if the customer is told that the tip is included, but then half of that money goes to Uber itself - that's completely not-transparent and equivocal.

Uber drivers file class-action suit over tips

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