Are you supposed to tip Uber drivers? Uber just answered in a surprising way.

I believe "Uber" is the German word for "super-convenient rides when the subway shuts down."

Which is appropriate, even though I just made it up.

The once-underdog-startup-turned-transportation-empire has become a pretty dominant force in the world of people who need to get places, which has also made it the subject of several recent controversies.


Photo by Oli Scarff/Getty Images.

First, New York City taxi owners sued Uber, saying the ride-booking service was threatening their livelihoods. Then Uber drivers got angry and sued the company, citing unfair wages and lack of proper employment status.

The company has also come under fire for spying on a reporter, a sexist campaign in France that claimed to pair passengers with beautiful women, and a "negligent" driver onboarding process that many say has led to incidents of sexual assault.

Like that area under the passenger seat, Uber has never really been squeaky clean. And now, another controversy is putting the company back into the headlights.

Uber just announced that its app won't include an option for tipping. And there's a really interesting reason.

You see, tipping is a bit confusing when it comes to ride-booking.

While Uber's official policy is that passengers don't have to tip and there is no option that allows users to tip using the app, many Uber drivers say that policy has created the misconception that drivers get tips from the company. In fact, drivers receive only the ride's fare, minus a 20-25% cut that goes to Uber.

Photo Illustration by David Ramos/Getty Images.

As part of the settlement from the class action lawsuit brought by drivers back in 2015, Uber has agreed to clarify once and for all that tips are not included in drivers' fares.

However, the company says it's still not planning on adding a tip function to the app anytime soon.

Why?

Tipping is inherently unfair because of customers' subconscious racial biases, Uber says.

While most conversations about racial bias and tipping tend to focus on the likelihood of a customer to tip based on his or her race, Uber has done its homework on research that suggests the bias goes the other way, as well.

According to The Boston Globe, an Uber spokesperson cited a study done by two Cornell University professors that found "consumers of both races discriminate against black service providers by tipping them less than white service providers.

Photo by Spencer Platt/Getty Images.

A study published in the Yale Law Journal also found that after controlling for other variables, African-American cab drivers were tipped one-third less than white cab drivers on average. It also suggested that government-mandated tipping would directly reduce the racial tipping bias and might even reduce the tendency of drivers to refuse African-American customers.

Some have argued that race doesn't factor into how customers tip. But the data doesn't back them up.

Kiesha Seaton, an Uber driver who is black, told the Globe that she doesn't think race has anything to do with the tips she does or does not receive, saying, “It’s all about the service you provide, and if you provide top-notch, five-star service, you expect to be compensated as such." She went on to cite a large tip she once received as evidence, while admitting that she’s not sure how the experience would have played out if she were white.

Still, other Uber drivers have argued that everything from the model of the car they drive to their physical appearance can affect their tips.

In the service industry, there are obviously innumerable variables that can affect tipping behavior, ranging from the general mood of the customer or server to their economic status to the widely misunderstood and confusing language of a tipping policy.

Photo by Spencer Platt/Getty Images.

In a perfect system, Uber wouldn't need a tipping feature.

The company would simply pay their drivers a fair living wage and negate the need for the customer to provide extra in the form of tips.

Joe's Crab Shack recently became the first major restaurant chain to test out that concept. The restaurant raised its servers' starting wage to $14 an hour (from just over $2) and banned tipping. CEO Ray Blanchette argued that it would increase employee retention and guarantee that servers take home a consistent paycheck even if they work on slow nights — something that could be financially devastating to a server under the old model.

If Uber wants to make its employees happy, clear up all the tipping confusion, and account for unfortunate racial discrepancies, it might want to try paying its drivers a living wage.

Frankly, if Uber can afford to deliver kittens to your door once a year, it can probably afford to treat its workers fairly.

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