Uber to bring tipping to Australia

author-avatar By on March 01,2019
Uber to bring tipping to Australia

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Ride-sharing giant Uber has introduced a new feature in its Australian app that lets riders ‘add a tip’ – and it hasn’t gone down particularly well.

Uber announced this new feature in an official press release on February 27, allowing riders to tip their drivers or Uber Eats deliverers who go “above and beyond”.

Using the Uber or Uber Eats apps, people can choose to give present options of $1, $3 or $5 and custom amounts up to $50 after completing the usual ratings process.

“Driver and delivery partners often go the extra mile to offer exceptional service, but until now there wasn’t an option for riders and eaters to reward this other than providing a five-star rating with compliments on Uber or thumbs-up on Uber Eats,” Lucas Groeneveld, Head of Driver for Uber Australia & New Zealand said.

“We have often heard from riders and eaters that they would like the opportunity to show their appreciation for great service.

“We are now offering them the opportunity to recognise and thank partners for the things they do to make the experience more magical, memorable and fun.”

Tipping is mostly an American (and Canadian, to a lesser extent) custom – wait staff and bartenders in the States earned an average hourly wage of just $2.13 an hour in 2015 according to the United States Department of Labor, so most service staff (including driver) rely on the generosity of tips to make ends meet.

The tipping functionality was already prevalent in the American Uber app, but had yet to come to Australia and New Zealand.

Tipping isn’t the norm here in Australia, and there are many people who are adamantly opposed to it, saying it encourages wage theft and underpaying staff.

After the announcement was made, a Reddit thread on the topic attracted more than 1,100 comments and nearly 7,000 upvotes, most of them criticising the move.

“This will, of course, enable Uber to further exploit its employees by shifting the blame for not earning enough onto the workers themselves,” the most popular comment said.

“Never allow this grotesque American custom into Australia! Don’t ever tip here, and shun businesses that expect it,” said another.

Despite the concerns around drivers lowering passengers’ ratings for failing to give a tip, the tipping part occurs after the rating has been completed, so this shouldn’t be a concern (for now).

Having the ability to receive tips could encourage a higher standard of service from Uber drivers, and possibly reduce the number of undesirable characters signing up – if people are willing to pay for it.

Transport Workers Union slams “Americanisation of work”

The Transport Workers’ Union of Australia said the introduction of tipping to Uber sets a “dangerous precedent” and does nothing to help the vast number of drivers already struggling to achieve fair pay and conditions.

“Introducing tipping is just another way for Uber to shirk their responsibilities to their workers” Secretary Peter Biagini said in a TWU press release responding to Uber’s announcement.

“Uber drivers have seen their share of the profits that Uber makes consistently shrink, while Uber continues to exploit drivers and riders all over Australia and the world.

“Uber drivers and riders deserve stability in work and income, and Uber needs to take responsibility instead of palming it off to the end users, the customers.”

Mr Biagani then warned of what might happen if Uber decides to take an even bigger cut of rides and deliveries.

“Tipping is not the way,” he said.

“This is not America where the working poor live on tips, the Union Movement in Australia has fought for hundreds of years for a minimum wage and fairness at work, and the TWU will always fight these greedy multinationals that try to take that away.”

It isn’t just Uber that’s come under scrutiny for working conditions in recent years.

Foodora, which has now ceased operations in Australia, was found to have owed millions of dollars in unpaid wages and superannuation entitlements to workers in 2018.

Another competitor, Deliveroo, also drew the ire of unions by listing drivers as sub-contractors, not employees.


For feedback or queries, email will.jolly@savings.com.au

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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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