June 23, 2017
By Steven Wishnia
New York NY – Two days after Uber announced it had agreed to modify its app to enable tipping, the City Council held hearings on a bill that would put that mandate into law.
The city Taxi and Limousine Commission has proposed requiring all ride-hail apps to enable tipping, but “codifying this measure will make sure this is permanent in our city,” Council Transportation Committee chair Ydanis Rodriguez (D-Manhattan) said June 22 at a rally outside City Hall before the hearing. Uber responding to pressure is a victory, Councilmember Carlos Menchaca (D-Brooklyn) told LaborPress, but “a legal framework is the only way to ensure justice for perpetuity.”
Uber “never allowed drivers to get tips” before the TLC rule, said driver Sohail Rana, 49, of Long Island, an Independent Drivers Guild committee member. “We want to make sure that nobody comes back and changes it.”
The bill, Intro 1646, would require black-car and luxury-limousine services that passengers can hail electronically—which includes app-based taxi companies like Uber, Lyft, Juno, Via, and Gett—to enable passengers to leave a tip using the same method they use to pay the fare. Violators would be fined $250 to $500. The TLC already has a similar requirement for yellow and green cabs.
Rodriguez, who drove for a livery-cab service in Upper Manhattan and the Bronx while a student at City College, said that tipping had been standard in the industry “as far back as I can remember,” but that Uber, whose more than 30,000 drivers make it the largest app-based taxi company in the city, did not give passengers a way to leave them. The IDG estimates that enabling in-app tips could net $300 million a year for Uber and other electronically hailed drivers.
“Any type of extra increases the income, which per hour is way too low,” says UberX driver Alex Iacobi of Brooklyn, 64, a former stockbroker who drives 30 hours a week while trying to develop a business helping drivers get health insurance.
The IDG is supporting the bill. But executive director Ryan Price told the Council that the bill should set the tip options as a percentage, such as 20, 25, or 30%, unlike the option Uber plans to begin next month—which lets passengers leave a tip after they rate the driver and makes $1, $2, or $5 the easiest amounts to leave. He said it should also prohibit companies from requiring passengers to rate the drivers before leaving a tip; Juno, he told LaborPress, lets passengers tip only if they give the driver a top five-star rating. Passengers should be able to tip for at least 24 hours after the ride, he added, and companies should not be allowed to take a cut of tips or count them as “incentives.”
At a meeting with the IDG works council the night before, Price told LaborPress, Uber management told drivers that if the Council required the company to put a tip-percentage option in the app, it would likely do it only in New York City.
The TLC “supports requiring all bases who use apps to let their passengers tip via app,” Commissioner Meera Joshi testified, but she said she believed the commission’s proposed rule “is an effective way to more expansively benefit hard-working drivers.” Specifically, she explained, the bill does not include livery bases that use apps; it allows black-cab bases that accept cash to limit tips to cash-only even if they also take fares through an app; and that unlike the TLC proposal, it does not prevent the base from taking deductions from the tip or require that the money be transmitted to the driver “quickly, fully and directly.”
Uber did not sign up to testify, the Council’s sergeant-at-arms said. The company had objected to tipping in an April court settlement, but after “getting burned in the press, they kind of backed off,” says Price.
The IDG, an International Association of Machinists affiliate, made pushing for the tip option its first major campaign after being formed last year. Next, Price says, it is planning to campaign for a “piece rate” that would enable app-hail drivers to make $250 in an eight-hour day, instead of working for 12, 16, or 18 hours, as they often do now. “It’s got to end,” he says. “It’s not sustainable.”