Uber's recent class-action settlement includes a small proposed shift in the app’s tipping policy that could lead to changes for both drivers and passengers.
On Thursday, ride-sharing service Uber announced an up to $100 million settlement for class-action lawsuits in California and Massachusetts, which cover 385,000 drivers. The proposed settlement, “recognizes that drivers should remain as independent contractors, not employees.” As part of the terms of the agreement, Uber drivers will be able to solicit cash tips from passengers directly or post a sign in their cars that tips aren’t included in the fare.
Under the settlement, Uber won’t have to provide the signage for cars, according to Shannon Liss-Riordan, the lead counsel for the Uber drivers in these lawsuits. But, she added, “The plan is there will be consistent-looking signs.”
The change in Uber’s stance on tipping won’t be official until the settlement is approved by a judge; a preliminary approval hearing is scheduled for June 2, and it may take months until it is finalized, she said. But, it’s possible passengers will see signs before then.
“I don’t expect Uber will be cracking down on drivers with signs before the final approval,” Liss-Riordan said.
Currently, the Uber app does not mention that tips are not included, nor are signs posted in the cars. Though passengers may not know that tips would be appreciated, Uber drivers may give lower-than-usual ratings to passengers who don’t tip. The settlement will not add tipping within the Uber app, but passengers may be more aware that tips are not included and can offer cash.
“I think this is going to make a substantial difference in drivers’ livelihood and day-to-day income, because passengers will start to tip,” Liss-Riordan said.
The proposed settlement terms about tipping are a shift from Uber’s current tone. On its website today, Uber tells passengers: “You don’t need cash when you ride with Uber. Once you arrive at your destination, your fare is automatically charged to your credit card on file — there’s no need to tip.”
When asked if Uber drivers may rate passengers lower than usual if they don’t tip, Liss-Riordan said, “I think when you participate in a service transaction there are certain cultural norms. The nice thing to do is leave them a tip, though you don’t have to.”
Uber did not respond to ABC News’ request for further comment.
In addition to how drivers may rate passengers based on tipping, passengers and Uber itself gives ratings to drivers. Too many poor ratings or too many declines to pick up passengers from a driver can lead to deactivation. But there hasn’t been an official policy until now.
On Thursday, Uber posted a statement about the settlements saying that it now has a policy explaining when and how the company bars drivers from using the app and a process to appeal those decisions.
“For example, we don’t have a policy explaining when and how we bar drivers from using the app, or a process to appeal these decisions. At our size that’s not good enough. It’s time to change,” Uber CEO Travis Kalanick wrote on the Uber website. “So today we’ve published a driver deactivation policy for the first time. It will apply across the United States, and our goal is to roll out similar policies globally over time.”
TELL ALL DRIVERS YOU KNOW SIGN-UP FOR UNITED DRIVERS APP TODAY – LET’S PUT A STOP TO THIS NONSENSE.