BUSINESS

Uber Will Reimburse Riders After Taking Half Of Its Drivers’ Tips

The settlement involves 47,000 customers who used the app in 2012 and 2013

BUSINESS
Photo Illustration: Diana Quach
Sep 16, 2016 at 5:31 PM ET

Uber’s latest tipping misstep with drivers and riders is near settlement. The Los Angeles Times reports that San Francisco Judge Edward Chen approved a preliminary settlement for Uber to refund passengers the tip money the company skimmed off them during a year-long period between 2012 and 2013. Drivers will receive nothing in the settlement.

The case, filed in 2014 by plaintiff Caren Ehret, alleged that Uber was pocketing 40 to 50 percent of the tips it claimed were going directly to drivers. Now, out of a fund of $343,861.46, some 47,000 customers who used the app between April 20, 2012 and March 25, 2013 will receive 40 percent of any gratuity they paid for rides during that time. The catch? Only riders who received a promotional email from Uber advertising that 20 percent of the fare was gratuity are eligible.

Uber doesn’t normally prompt riders to tip, claiming that’s in line with its long-stated policy to keep the experience hassle-free. But this hasn’t been a clear-cut policy. Uber recently agreed in April to pay $100 million to drivers in California and Massachussets in two class-action settlements stemming from a confusing tipping policy. Going as far back as 2011, Uber misled customers in thinking that tips were included in fares when they weren’t, and as a result of that settlement, drivers can now display a sign that they accept cash tips or accept them when offered.

After the April settlement, Uber said the tipping policy, as far as it envisioned it, was still the same as it ever was. “Tipping is not included, nor is it expected or required,” it wrote in a post on Medium. “In fact riders tell us that one of the things they like most about Uber is that it’s hassle-free. And that’s how we intend to keep it.”

But it’s hard to imagine how the vague tipping policy is hassle-free. All it does is make consumers who once relied on a cash-free experience feel like they have to tip, or worse, they’ll have no idea whether or not the driver expects them to tip.

According to the LA Times, those who are eligible to receive the settlement will be contacted by email “soon” and can either receive their payout in the form of a check or Uber credit.