The day we’ve all been waiting for is finally here and Uber drivers and couriers will now be able to accept tips through the Uber app.
The new tipping option is part of a larger ‘180 Days of Change‘ that aims to fix the Uber driver experience. Uber is calling today’s announcement Chapter 1 and it’s focused on improving the earnings experience of Uber drivers across the United States. Over the next 180 days, Uber will release one new chapter approximately every month and aim to tackle issues like flexibility, customer support and more.
For years, Uber has struggled with high turnover and low satisfaction rates among drivers. And although they’ve always said that they care about drivers’ future, today’s announcement actually proves it. I’ve always been frustrated by Uber’s lack of empathy towards drivers and although this won’t shift the perception overnight, it is a big step in the right direction.
Like with any job, there are positives and negatives about driving for Uber, but I’ve always felt that the experience could be so much better. There are over 2 million drivers on the Uber platform now though and fixing their relationship with the company is bound to have a big impact on a lot of people. So what’s new to the Uber driver experience?
Join us tonight at 5pm PT on Youtube Live to go over ALL of the big changes that Uber just announced. You can subscribe to our Youtube channel here and be sure to turn on notifications (instructions here) so you know when we go live.
New Tipping Option on Uber
Drivers have always been allowed to accept cash tips on the Uber platform but there was a never a way for passengers to leave a tip via the app. Now, all that’s changed though and Uber’s new tipping option will be rolled out today in Seattle, Minneapolis and Houston. The full nationwide rollout will happen by the end of July. There are zero service fees applied to tips, and they can be cashed out just like other earnings.
Here’s what the tipping screen will look like on the passenger app:
Drivers have been using makeshift tip signs for years and while they’ve all reported positive results, it wasn’t nearly as convenient as an in app tipping option. It will be interesting to see what kind of financial impact the new tipping option will have, but my guess is that it will increase a driver’s bottom line by anywhere from 10-30%.
And more importantly, I think it provides a reward for drivers who go above and beyond for their customers. In the past, there was no benefit to being a 4.9 star rated amazing driver, you would get all the same requests and make the same per trip as any other driver. And anecdotally, passengers have reported a big drop off in the quality of Uber over the past two years. If drivers have the option to get tipped, I think they will be a lot more accommodating in all aspects of being a driver.
All Drivers to Get Destination Filter
Driver destinations allows the driver to set a destination up to twice a day in their app and only receive trips going towards (for the most part) their destination. Destination filter is one of my favorite Uber features but it hasn’t been available in all markets, until now! You can learn more about how Uber’s destination filter works here.
Paid Wait Time
Drivers will now earn a per minute fee while they wait for the rider. The paid wait time starts two minutes after you’ve arrived at your rider’s destination and will accumulate until the trip starts. The per minute rate in Los Angeles is only 15 cents ($9 per hour) so you won’t make much after Uber’s cut while you’re waiting: 11.25 cents per minute or $6.75 per hour.
But I think the biggest benefit of this change will be that riders won’t make you wait nearly as long if they know they’re getting charged. Drivers make around 6 times more per mile than they do per minute so it’s always in your best interest to be driving with a passenger in your car.
A nice byproduct of this change is that there will now be a countdown timer on the driver app (see below) to help you track cancellations. In the past, you would have to wait 5 minutes and track the time on your own, before cancelling a ride and receiving a cancellation fee. Now, once you get within a certain radius of the rider, the 2 minute countdown timer will automatically start and after 2 minutes, you’ll start getting paid waiting time and after 3 more minutes have elapsed (for a total of 5 minutes), you have the option to cancel the ride and charge the rider a cancellation fee. Wait time fees are not applied in the event of a rider or driver cancel. The trip must be completed in order to incur wait time fees.
2 Minute Cancellation Window
Speaking of cancellations, Uber’s new policy for riders will also charge them a cancellation fee if they try to cancel a ride more than 2 minutes after a driver accepts the trip. This has always been a big pet peeve of mine since it’s frustrating to start driving towards a passenger, only to have them cancel on you. The old cancellation policy gave riders 5 minutes to cancel a ride which was way too long. 2 minutes seems a lot more reasonable to me and I suspect that passenger cancellations will go way down because of this change.
This feature will be available today in California, Massachusetts, Washington DC, Baltimore, Charlottesville, Greater Maryland, Richmond, Roanoke, Hampton Roads, Chicago, NW Indiana, Cedar Rapids, Fort Collins, New Orleans, Baton Rouge, Lafayette (LA). It will be available to all US drivers in August 2017.
Boost and Quest Now on Instant Pay
Instant Pay has been another extremely popular feature with drivers and now we’ll have the option to cash out both Boost and Quest instantly just like with their regular pay. This addition is important for drivers now that bonus and incentive pay has become a bigger part of Uber’s pay structure, especially in busy rideshare cities like San Francisco and Los Angeles.
This feature will go live in Boston today and start rolling out to New York City, Chicago, San Francisco, Los Angeles and Washington DC in the Summer of 2017. It should be nationwide by the Fall of 2017.
Expansion of Driver Injury Protection Plan
Uber was already testing this program in 8 states and they will now be significantly expanding the program to the following states: AL, AZ, AR, DE, GA, IL, IN, IA, KS, LA, MO, MA, MS, MI, NE, NJ, ND, OH, OK, PA, SC, TX, WV, WI, WY, ND, DC, FL.
Drivers in these states will now have the option to help protect themselves from accidents with optional coverage that includes disability payments for lost earnings, medical expenses and survivor benefits. Typically, there’s no way to recover these benefits unless the other party was at fault in an accident and you go through an Uber accident lawyer.
Those who opt-in to Driver Injury Protection will pay $.0375 cents/mile for every mile they have an Uber passenger in their car (on trip miles). However, the Driver Injury Protection is active the entire time that the driver is logged into the Uber app, even when they are waiting for a request. Drivers who do not signup will still enjoy the increase $0.05 increase in per mileage earnings.
You can go here to learn more about Uber’s Driver Injury Protection Plan.
Teen Fee Goes to Drivers
Uber started piloting teen accounts in three cities in March (Seattle, Columbus and Phoenix) and in those cities, drivers will now receive an additional $2 base fare for transporting teen riders (or $1.50 after Uber’s cut). Uber’s justification for the fee is because ‘driving teen riders means drivers might hear from parents, too’.
While I’m always happy to see drivers get more money, I think the problem with teen rides is that drivers are really taking on more liability. This policy still doesn’t change much in the other 47 states where giving rides to anyone under the age of 18 is explicitly against Uber’s Terms of Service.
Related Video: How to handle requests for minors
What Does All This Mean for Drivers?
The new tipping option is what most drivers will care about but I think the other changes are important too because they represent a potential shift in the way Uber treats its drivers. Uber has always been a passenger centric company and most policies and programs rewarded passengers first, Uber second and drivers third or sometimes not at all. That strategy worked well for short-term growth but it’s tarnished Uber’s relationship with drivers and recently even started causing turmoil internally.
And like everyone else in this world, drivers care most about their pay so it’s refreshing to see Uber’s ‘first chapter’ in this initiative try and address some of the issues around earnings. Tipping will help drivers get paid more and the driver injury protection plan will actually raise rates by 5 cents. But for the most part, what this announcement didn’t have is a real rate increase. If you could criticize any part of this announcement, that would probably be it.
Drivers have been asking for all of these changes for years now and it seems like Uber is finally starting to listen. Today’s announcement is only the ‘first chapter’ in a series of changes that Uber will be making and while it may be hard to top the tipping option, if Uber continues at this pace, I think they will be able to meaningfully improve the driver experience.
Drivers, what do you think about Uber’s latest changes to the driver experience? Which one do you care about most and what’s the next thing that Uber needs to fix?
By the way, don’t forget to join us tonight at 5pm PT on Youtube Live to go over all the big changes that Uber just announced. You can subscribe to our Youtube channel here and be sure to turn on notifications (instructions here) so you know when we go live.
Make Every Mile CountDid you know that every 1,000 business miles can generate $535 in tax deductions? Never miss another mile with the new QuickBooks Self-Employed automatic mileage tracker.
-Harry @ RSG
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