SAN FRANCISCO _ Bowing to years of intense pressure from drivers, Uber on Tuesday said it will roll out a new feature that lets passengers tip from within the ride-hailing app.
The tipping option is now available in Seattle, Minneapolis and Houston, Uber said in an email sent to drivers Tuesday morning and later posted on the company's website. The San Francisco-based startup said it plans to add more cities over the new few weeks and is aiming to make tipping available to all U.S. drivers by the end of July.
Uber on Tuesday also announced a handful of other driver-friendly changes that will roll out over the next few months, including driver injury protection insurance. That means that for a fee, if a driver is hurt in a crash, Uber could cover his or her medical expenses, pay for lost earnings, or pay a survivor benefit to the driver's family. Uber said the service will roll out to different states throughout the year.
Passengers also will be charged if they cancel their ride after more than two minutes _ down from five minutes. Uber is also letting drivers choose their destinations for more trips and adding on a $2 fee for driving teenagers.
"For the next 180 days (and beyond), we'll be making meaningful changes to the driving experience. Some changes will be big, some will be small _ all will be changes drivers have asked for," Uber wrote in a blog post. "Why now? Because it's the right thing to do, it's long overdue, and there's no time like the present. This is just the beginning. We know there's a long road ahead, but we won't stop until we get there."
The news comes a day after Lyft, Uber's smaller ride-hailing rival, said it will offer larger tipping options for rides that cost more than $25 _ with the app suggesting tips of $2, $5 and $10 instead of the original $1, $2 and $5 choices.
Lyft, which said Monday its drivers have made more than $250 million in tips, has offered in-app tipping from the beginning. The idea is that the feature makes it easier for passengers to tip, since they often don't carry cash, and makes riders more likely to do so. Uber, despite intense pressure from drivers, for years adamantly refused to follow Lyft's lead. In April of last year, Uber said tipping created uncertainty for both drivers and riders, could lead to discrimination and might cause drivers to spend more time in wealthier neighborhoods.
But Uber has undergone a massive leadership shakeup since then. CEO Travis Kalanick started an indefinite leave of absence last week, several top executives including the president of ride-sharing have resigned or been forced out, and Uber has started implementing major changes to everything from its drug and alcohol policy to its board structure. The changes follow two investigations into claims of sexual harassment at Uber and the company's broader culture, which has come under fire after reports of rampant misbehavior.
Meanwhile, Uber is facing a criminal investigation into its use of a secretive software tool to evade law enforcement and is battling a lawsuit that accuses the ride-hailing company of stealing rival Waymo's self-driving car technology.
As part of its effort to move past the controversy that has scarred its image, Uber executives in a March conference call promised to work on improving the company's relationship with its drivers.
For drivers, the tipping news is a big deal. Not only will it affect their paychecks _ it's a symbolic win against a company that has a reputation of putting the needs of its customers before those of its drivers.
"I have to say, when they told me they were adding a tipping option, my jaw hit the floor," said Harry Campbell, who drives for Uber and Lyft in Los Angeles and writes a blog called TheRideShareGuy.com. "Personally I just never thought that Uber was going to add a tipping option."
Uber's lack of an in-app tipping option is one of the top three things drivers have complained about in the past, Campbell said. He expects the new option will increase a driver's bottom line by 10 to 30 percent.
"I think the tipping option is a big step in the right direction for Uber to improve its relationship with drivers," he said.
