Forcing a U-turn on tips reverses Uber’s NYC gains

Uber may be required to provide passengers a way to tip their drivers via their app in New York City if a plan by city’s taxi regulator is put into place.

Professor Alex Susskind is an expert on consumer behavior and satisfaction at the Hotel School at the Cornell SC Johnson College of Business. Just as Danny Meyer’s organization, the Union Square Hospitality Group, has moved toward a no tipping policy in its restaurants – Susskind says Uber should not change course.

Bio: https://sha.cornell.edu/about/directory/instructors/ams76

Susskind says:

“One of the great features of Uber is that you get an estimate for the trip and that is it. There is nothing that prevents you from tipping your driver with cash if you want to. It is much harder to reverse once the customer expects a portion of a service to be included already. If the tip is included as part of the quoted price and the service provider doesn’t deliver as expected, the organization is then on the hook directly to make sure that service is delivered according to standards. It gives the organization the power over controlling all rewards and pay for their staff.

“Uber is very interested in receiving ratings of their drivers and the experience. This is a quality control metric. Customers can decide to select or not select a driver based on their past performance. Anyone can write a good or bad review on Yelp about anything. Managers need to pay attention to the service as it is being delivered, provide staff with feedback on their performance on a regular basis to ensure quality service.

“Let customers vote with their feet. I personally feel that tipping is an outdated concept in service businesses – be it a restaurant, car service, or hotel.”

 

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