Most Rideshare Passengers Don’t Tip – But Drivers Aren’t Surprised

In this week’s roundup, senior RSG contributor John Ince shares a shocking story on tipping – are you surprised by the number of people who don’t tip their drivers? That, plus the latest Uber news and more below.

Uber CEO walks back comment on Saudi writer’s slaying  [SFGate]

Sum and Substance:  NEW YORK (AP) — Uber CEO Dara Khosrowshahi is being criticized for calling the murder of a Washington Post columnist “a mistake” and comparing it to the death of a pedestrian struck by one of the company’s autonomous vehicles.

Khosrowshahi later said he regretted his comments, made during an interview with Axios on HBO. He tweeted Monday that there’s no forgiving or forgetting what happened to the journalist Jamal Khashoggi and he was wrong to call it a mistake.

Critics say Khosrowshahi is downplaying Khashoggi’s grisly murder to placate one of the company’s biggest investors.

My Take:  This seems to me like an honest mistake. He corrected it within an hour of the interview. If you can’t make a mistake then this culture of ours is in need of improvement..

Uber’s CEO Wants the Company to Be Magical. The Market Just Wants Profits.  [Barrons]

Sum and Substance:  … “Investors were more willing to look past profitability concerns when the narrative was validated by ever-increasing private market equity valuations and unchallenged growth assumptions,” wrote David Schawel, the chief investment officer of Family Management, in an email. “Once the companies went public and were forced to deal with the day-to-day scrutiny of the public markets, investor psychology changed with economic viability taking center stage.”

Uber seems to be counting on still more patience from investors. The company has set a 2021 target to get to break-even. “Magical companies are ones that can compound top-line growth at massive scale, improve margins, allocate capital efficiency, and do the right thing for all of their constituencies. We’re working hard to be one of those magical companies,” Khosrowshahi said on Uber’s earnings call.

But today, the market wants less magic and more discipline. Some tech investors use Amazon.com (AMZN) as a defense for losing money to gain market share. But the analogy doesn’t really work.

My Take:  This article focuses on the two main ways of viewing the company, rational and irrational. Uber has cash to burn, so they burn it.  If they didn’t have cash to burn, then where would they be? That’s the question.

Uber Stock Rises Even as Kalanick Sells Shares  [MarketRealist]

Sum and Substance: Yesterday, Uber (UBER) co-founder Travis Kalanick sold about 20 million UBER shares, raking in over half a billion dollars. The shares sold for $26.65–$27.40. In spite of the massive deal, Uber stock closed 0.5% higher yesterday at $27.14. And as of 4:30 AM ET today, Uber stock was up 0.85%. On November 6, Uber’s lockup period ended, taking the stock down 3.9%. Kalanick, who now holds more than 75 million Uber shares valued at around $2 billion in total, is still an Uber board member….

Monetizing Uber stock may help capitalize Kalanick’s new venture, CloudKitchens. The venture, which provides shared kitchens for delivery-focused restaurants, raised $400 million from Saudi Arabia’s public investment fund last week. Interestingly, Uber Eats, Uber’s food delivery business, operates in a similar space. The business was the highlight of Uber’s Q3 earnings results. While the segment’s revenue grew healthily, its EBITDA loss widened to $316 million.

My Take:  So Travis unloaded half a million.  That’s a lot of money.  He’s only got another four and a half million to go.  Let’s hope he doesn’t do it all at once.

Will Uber And Lyft Ever Stop Fighting Laws, Or Their Workers?  [Forbes]

Sum and Substance:  As a rule, firms like Uber, Lyft, and DoorDash seem unwilling to cede ground without a showdown. In California, one of platform workers’ biggest strongholds, the companies continue pushing back against the soon-to-be-implemented law known as AB5, which creates a new state framework to classify workers as employees or independent contractors, for the sake of allotting unemployment insurance, workers’ comp, and other benefits.

In October, as part of a reported commitment to spend $90 million or more opposing AB5, platform companies announced a proposed ballot measure that would exempt drivers from AB5 in exchange for certain wage, benefit, and support guarantees. In order to get the proposal on California ballots in 2020, proponents will need to gather more than 600,000 signatures.

According to the newly launched Protect App-Based Drivers & Services coalition, which receives major funding from Uber, Lyft, and DoorDash, the measure would ensure that app-based drivers earn at least 120% of California’s minimum wage during rides, establish a reimbursement rate of $0.30 per mile for vehicle expenses, and provide drivers with healthcare subsidies from the companies if they work above a certain amount per week, among other things.

My Take:  Pay is a complicated issue. For me, I look at what the companies want and choose the opposite.  Here, the companies are fighting for something that has a lot of uncertainty to it.  But it’s better than what we’ve got.  Besides, the companies don’t want it – so it must be good.

A study said that 60 percent of Uber riders don’t tip. Here’s what rideshare drivers had to say.  (SFGate)

Sum and Substance:  A study said that 60 percent of Uber riders don’t tip. Here’s what rideshare drivers had to say. …

“I think tipping comes down to ethics and society,” Avedian said. “If you go to somebody that’s a tipper, they’re going to tip; it doesn’t matter if it’s in the app or if it’s cash. You go to a bar, the guy opens your beer, you tip him; you go to a valet, the guy brings your car a hundred yards, you tip him. Taxicabs, you tip. You go to Vegas, the guy opens your door, you tip him. I don’t know why rideshare drivers don’t get tipped more often, to be honest with you, because we’re keeping you safe and taking you from point A to B.”

There are some theories as to why the Uber figures seem low. Based on what she was seeing on the site’s forums, Kenyon said she felt Uber’s late adoption of allowing riders to tip has stifled the amount of tips that drivers receive.

“I think Uber’s very strong stance from the beginning, being a no tipping platform [at first], really sort of created this culture that allows riders to get away with not tipping and not really feeling bad about it,” Kenyon said. “Even though they have swung the pendulum and now they say, ‘Oh no, you should tip’ or, ‘We have tipping in the app’ — I don’t think it really matters, because I think their strong [anti-tip] stance just gave riders this out. …

In the end, however, it’s all about whether you consider rideshares to be a service, and how you feel like compensating them for that service. Just don’t promise to tip when you won’t — the drivers do remember….

My Take:  Tipping is a simple act and yet on the ridesharing platforms, it’s not a simple act. It’s a big deal. Tipping shouldn’t be that difficult. Come on, folks. Tip your driver.

Readers, what do you think of this week’s roundup?

-John @ RSG