In this gig economy, should I tip my driver in cash?

Does it really make a difference if you tip your driver in cash rather than on the app in the gig economy?

The short answer is, yes. Cash is always king and it has a instant satisfaction element to it. Also, if you are one of those riders that likes to come out a few minutes after we arrive, or if you come off as a jerk at any point during the ride, when it comes to us rating you as a customer, for me at least, a cash tip means forgiveness and a instant 5 star rating for you. For me personally, I can care less about your rating but other drivers really take this into consideration. So many have told me they don’t pick up a rider if their rating is low. 4.6 seems to be the cutoff for many drivers. I will admit further that before tipping was an option in Uber, I would instantly give you a 4 star if you did not provide a cash tip. I have since changed my ways since having a tipping option in the app means someone can end up tipping days later, however, there are still many drivers that practice this. Some do it right away, some do it the next day to make sure you don’t tip. While I no longer practice this, I do not have an issue with them rating based on tips. If you think this is ethically incorrect, think of a time when Uber or Lyft charged you double, triple, quadruple the price to get home through surge pricing. Did you end up rating that driver lower because you didn’t like the price? Something drivers have no control over? It is the same concept. A driver did not like what they get paid for whatever reason, we reserve the right to rate based on the price as well. I have not been able to confirm with Uber, but Lyft at least, if we rate a rider 3 stars or lower, we will not be matched again. There are some riders who we know will never tip. Like that downtown commuter who saves money with rideshare rather than parking in a garage. Or that Mcdonald’s worker who works 2 blocks from their apartment. Grocery store runs (who goes across town for a grocery store?) with a cart full of groceries we end up helping you load and unload because we are paid mere pennies for time and we need to move on. If we helped, that driver deserves a tip, even if their reasons were for their own benefit. If you don’t tip on a short, complicated ride, the time rate really does not make us want to do that again.

But let me say (I believe I speak on behalf of all drivers), that a tip is a tip, and we really, really do appreciate it.

Take Uber and Lyft for example. In Houston, on a minimum fare trip (think about the trips that are less than 3 miles) the driver is paid out $2.44. (even as low as $2.20 for some who started more recently, Uber and Lyft keep more of the fare for newer drivers, but that is another post for another time.) At that rate, a small $3 tip more than doubles our earnings. We can end up doing these all day long, so any kind of tip really can boost the drivers income. In the past 5 years, I have done 7,000+ trips. If everyone tipped an average of $3, that comes out to $21,000. That is not a small number for drivers, especially when you take into consideration that both Uber and Lyft offer “Instant Pay”. Meaning, we can cash out after every ride. Many drivers cash out for gas money at the beginning of the shift after doing a few rides, which is a clear indicator that drivers can really use the extra few bucks that you are willing to give as a tip. If we had enough cash tips to cover our gas, we can save on instant pay fees (50 cents every transaction).

Tipping in the app leads to lower pay in the long term for drivers, such is the case of DoorDash.


DoorDash
If you want to tip through the apps, that’s fine. Like I said, a tip is a tip. However, there is one company “DoorDash” that you should NEVER tip on the app with.

Why? DoorDash uses your tip fee to cover the delivery fee they would of paid out to drivers. I was one of the first drivers in Houston to deliver for DoorDash and I have all but stopped because of this reason. (I do dash every once in a while to keep the account open, just in case I ever get into a bind.)

Here is how it works:
DoorDash Minimum Fee is $5 to drivers.

If a Customer tips $5 on the app. DoorDash will pay the $5+$1 to the driver for a total of $6

BUT if a Customer does NOT tip in the app. DoorDash will pay the full $5 (minimum fee) to drivers.

This means:
If a Customer tips $5 in cash. DoorDash will pay $5. Driver gets $10.

So, you are tipping the same amount in both cases, however, if you tip in cash, the dasher (driver) will get nearly double the amount.

Tipping just a few dollars can double a drivers income.

Now, a few dollars may not mean a whole lot to you, but it can really boost the drivers daily take home pay. Whether or not it is in cash, or on the app, it really does help. One of my greatest fears is that Uber and Lyft will learn from DoorDash and start compensating drivers pay through tips. Cash is King is still true to this day. While we still have to report all taxable income, like cash tips to the IRS. Keeping it from Uber, Lyft, DoorDash, can really help us long term in terms of base rate cuts.