[abvdasker]

Tipping, if done right, is a better solution. Some fraction of customers today want to tip without being prompted as an expression of gratitude or appreciation. Some fraction of those customers don't have cash and are then unable to tip their drivers because the app didn't provide a mechanism to do that.

This gives riders that option without hurting Uber's bottom line. Paying drivers more is all well and good, but an increase in fares on the rider side would reduce marketplace demand and might actually hurt drivers more than it would help. The alternative is for Uber to eat the cost of paying drivers more, but that simply isn't viable for a company that's already losing as much money Uber does. Put simply, Uber is a business that can't really afford to pay drivers more.

There's a lot that could go wrong with tipping and it remains to be seen whether Uber rolls this out everywhere, but it's possible that this could end up being a feature where everyone wins.

[ck425]

Everyone wins except the riders. And possibly the countries where there's no absurd tipping culture and that starts to encourage it.