Uber reversed itself Tuesday and said it will allow tipping of drivers.
Drivers in Seattle, Minneapolis and Houston can receive gratuities from passengers through the Uber smartphone app beginning Tuesday, and tipping will be allowed elsewhere in the U.S. by the end of July.
The ride-hailing company announced the policy U-turn as part of its “180 days of change” initiative that aims to improve conditions for drivers. The company is trying to cut down on driver turnover. Only 4 percent of Uber drivers stick with the company for more than a year, a study found, and compensation is the primary reason for leaving.
Uber called the change “the right thing to do” and “long overdue” in a company blog post.
Uber competitor Lyft has allowed tipping since 2012. As of Monday, its drivers have collected more than $250 million in tips.
New York’s Independent Drivers Guild, which represents 50,000 ride-hailing drivers in New York City, welcomed the news as a big step toward better wages.
“Today’s tipping announcement is an important win for drivers and proves that thousands of drivers coming together with one voice can make big changes,“ Jim Conigliaro Jr, founder of the group, said in a statement emailed to HuffPost.
“Cuts to driver pay across the ride-hail industry have made tipping income more important than ever,” Conigliaro said. “We were proud to lead the way on this fight on behalf of drivers in New York City and across the nation. This is an important first step toward a more fair ride-hail industry.”
Uber also announced seven other policy changes for drivers, including eliminating unpaid wait times, an increased base fare for teenage passengers, and the option for drivers to pick up and drop off passengers while en route to a pre-set destination.