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    At The Rideshare Guy, we are all about drivers earning more for their hard work shuffling passengers around. Senior RSG Contributor Sergio Avedian has shared some of his strategies with his fellow drivers for the past few years, and he is all about Working Smart, not Working Hard. 

    However, there are strategies that stump even expert Sergio – like tipping. Until recently, he hadn’t cracked the code to get higher tips. However, with new methods, he recently had his best tipping week ever. Keep reading to find out how he did it – and if it’s sustainable! 

    doordash

    Tipping cab drivers, servers, bartenders, even doormen has become like clockwork for Americans. We don’t think twice about handing over 10% to 25% of our bill after eating out at a full-service restaurant. You can’t get out of a cab without considering a tip. You generously tip a bartender to open a bottle of beer or pour you a drink.

    Uber rolled out its in-app tipping option in June of 2017. As such, they were able to develop data from more than 40 million trips. What they found was that not a whole lot of passengers tipped their drivers. Roughly 16% of Uber rides are tipped. Most riders (70 percent) never tipped over the research team’s four weeks of data collection. Of those who do tip, very few (1 percent) tip on every trip.

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    History of Tipping/Gratuity

    The history of tipping is varied, with many asserting its racist origins in the United States, to claims that tipping has been practiced as far back as the Roman era – and is likely much older than that. For the sake of this article, we’ll begin with the practice of tipping beginning in Tudor England. 

    In medieval times, tipping was a master-serf custom wherein a servant would receive extra money for having performed superbly well. Soon afterward, customers began tipping in London coffeehouses and other commercial establishments. 

    According to Michael Lynn, a professor at the Cornell University School of Hotel Administration, tipping in the United States began just after the American Civil War in the late 1800s. Lynn suggests that wealthy Americans traveling abroad to Europe witnessed tipping and brought the aristocratic custom back with them to “show off,” or prove their elevated education and class.

    According to an article in The New York Times in 1897, there was a movement brewing against tipping in America. The anti-tipping group believed that tipping was the “vilest of imported vices” because it created an aristocratic class in a country that fought hard to eliminate a class-driven society. 

    In 1916, William Scott wrote a stinging diatribe against tipping in his book, “The Itching Palm,” in which he stood up against the policy of paying for service twice (once for the employer and once for the employee). Mark Twain railed against the practice, but unfortunately, all anti-tipping laws were repealed, bringing us to where we are today.

    Tipping remains a divisive issue, although there are many who are trying to change the status quo – with mixed results. One leader in today’s anti-tipping movement is major restaurateur, Danny Myers, but results from his anti-tipping platform are uneven. A lot of his employees complain of lower incomes and high turnover rates. 

    Is this new anti-tipping movement going to gain momentum or is tipping too ingrained in our society? Time will tell! 

    My Previous Tip Average: 10% of My Fares

    When I decided to drive again in late 2021, which I do on a very part-time basis, my tip average was about 10% of the fares I received, without the weekly promotions offered by Uber. 

    Last weekend, I decided to conduct an experiment to see if I could achieve higher tips. While I know one week doesn’t make a trend, I think I’m on to something. 

    On Saturday, I did 17 trips to take advantage of the Consecutive Ride Bonuses offered. I deployed my Destination Filter strategies to target mostly short rides. How did I do?

    I received tips on 11 out of 17 trips (65%), and on Sunday I did 13 trips and received tips only on 2 of them (15%). 

    Saturday Tip Percentage on Fares 35%, Sunday tip percentage 11%

     

    Overall Tip Percentage on Fares 27%!

     

    Increasing My Tip Average to 65%: What is My Tipping Secret?

    For many of us, giving rides to strangers is not natural, and it goes against everything we have been told by our parents. But these days there is an app for everything, and most of the work is done by strangers we will only encounter just once. 

    I treat most passengers the same way: I will greet them upon entering my vehicle and wish them a good day or night when they are exiting the car. 

    Most of them will be in their own world, flipping through their social media pages, checking their likes, or conducting some business. 

    On Saturday, I decided to be more talkative and strike a conversation. In a very polite manner, I told them that I had a few simple questions for a survey I was conducting. Most of them responded in a positive manner as we engaged in dialogue on our way to their destination. 

    I believe the key to my success was that I was not overbearing nor did I sound like I was baiting them to tip. I framed my questions in a manner that was not intrusive.

    Here were my questions to them:

    1. May I ask what you are paying for this ride? If they knew…
    2. What are your thoughts on higher fares the passengers are paying for Uber/Lyft rides these days?
    3. Why do you think the fares have gone up by 100% or more from pre-pandemic levels?
    4. Would you care to know what I am getting paid for this ride? 

    If they answered “yes”, I would follow up with my share of the total paid by Uber/Lyft from what they were charged.

    Most of the passengers were shocked and had no idea that Uber/Lyft were taking over 50% of the fare. I would subsequently ask them if they thought it was fair that Uber/Lyft were making more money in most cases than I was without doing any of the work or owning the car and incurring the expenses. 

    I strongly believe that these probing questions, in that direct order, and my friendly demeanor touched a nerve with 11 out of the 17 passengers on Saturday and resulted in tips. 

    Crucially, I did not repeat this experiment on Sunday, and the outcome was very different.

    My Conclusions and Takeaways for Drivers

    Most of the time as rideshare drivers we are fighting for crumbs left on the Uber/Lyft dinner table. In Los Angeles, we get paid 60 cents a mile and 21 cents a minute

    Considering a 56 cent IRS deduction (check out our tax guide for more information), it doesn’t leave too much room to turn a profit these days. If it wasn’t for Quests and CRBs. which have been drastically reduced over the past few weeks, most drivers would be losing money. 

    But we are out there day and night providing a valuable service to our passengers. We have their lives in our hands while transporting them safely from Point A to B. 

    Riders are facing much higher fares from the pre-pandemic days and that consequently will hurt our chances of receiving tips. 

    However, I believe educating the passenger is paramount. Once they learn that the drivers in most cases are receiving half or less than half of what they pay for a trip, with a positive approach, it could result in a much-needed boost to our incomes via gratuities. 

    Do you think educating passengers is key to receiving more in tips? What is your stance on the tipping debate?


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    -Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about five years. He has over 6000 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.