Tipping TLC Petition—Frequently Asked Questions

20 Feb 2017

Why would we be fighting for a tipping option instead of a pay increase?

The Guild is fighting for both, we don’t have to choose between a tipping option OR higher pay. Both things should happen, and we’ve been on public record with the Taxi and Limousine Commission in support of pay protections since our inception. Out of precaution, we included language in our petition to the Taxi and Limousine Commission to end the rule if it is any way a hindrance to implementing pay protection. It specifically states: “This rule shall be in effect indefinitely or until the Taxi and Limousine Commission implements a regulatory scheme that ensures drivers are earning a living wage.”

What does the petition to the Taxi and Limousine Commission (TLC) do, and how is it different from the online petition I signed?

The petition we submitted requires the Taxi and Limousine Commission make a yes or no decision on a proposed rule within 60 days (and counting) to approve a rule that implements a tipping option. The rules for petitioning to the TLC are written in the laws that govern the Taxi and Limousine Commission.

I’m not thrilled with [this app or that app’s] tipping option, will this only affect Uber, or the other apps as well?

Our proposed rule states: “All applications for smartphones, tablets, laptops, notebooks or any other interface used to arrange and pay for For-Hire Vehicle (FHV) rides throughout New York City and under the jurisdiction of the Taxi and Limousine Commission (TLC) are hereby required to have an in-application gratuity option. The entire amount of the gratuity option is to be given directly to the driver.“

The rule we proposed is very open, it only requires some kind of option. That could mean that the tip is included in the fare, it could mean that it’s a minimum tip of 20%, as long as the companies aren’t taking a commission from our member, it’s flexible. The Taxi and Limousine Commission also may change the rule before implementing it—which means they could make it like the Taxicab Passenger Enhancements Project rule where it’s a minimum opt-out tip of 20%, or they could make it so if there is an optional tipping option after the fare, it has to always appear, not only when you rate five stars and it disappears after two hours.

Does the TLC have the authority to implement a tipping option?

Within the Black Car industry, absolutely. Under Chapter 52 of the New York City Administrative Code, including but not limited to §52-04 sub paragraph (a)(2) requires that the TLC ”Set and enforce standards and conditions of service.” And subparagraph (a)(4) requires the TLC “Establish and enforce standards to ensure all Licensees are and remain financially stable.”

I like getting cash tips. Wouldn’t this just make it so the government can take a part of my tips?

A huge part of the problem that Uber created along with the narrative that ‘tips aren’t necessary’ was a culture against gratuity for attentive, safe service. As a result, even cash tips are a rarity.

If the Taxi and Limousine Commission agrees that tips are a necessary part of our member’s pay, and a way for driving to be more of a dignified profession, it will attack the anti-tip narrative at the core. Some people will always tip in cash (most likely other service industry workers), but the customers that don’t know that a tip is expected, or don’t carry cash with them will be much more likely to leave a tip. After the Taxi and Limousine Commission imposed a tip option by credit card in Yellow Cabs, 93-94% of their taxi customers began to tip. In fact, in the first half of 2015, 97% of customers who rode in a taxi solo and paid by credit card took advantage of that option, most tipping at 20%, according to a Quartz analysis of data from the New York City Taxi and Limousine Commission. This may be a huge improvement from the rare cash tip of today.

Also, you should be reporting your cash tips anyways.

Wouldn’t this rule reduce drivers’ pay because they would be considered tipped labor?

No. Right now For-Hire Vehicle workers are classified as independent contractors so they’re exempt from wage laws, including laws about a tipped labor wage. However, the Taxi and Limousine Commission is responsible for regulation of the working conditions and pay of our members within the current organization of the industry. This industry is new and constantly changing, which makes it difficult to regulate, but every year without a tipping option our members lose between $3,000-$13,000 per year, conservatively, for no logical reason.

Why is Uber against a tipping option?

In the first Works Council meeting, where member-activists met with Uber management to discuss issues on the job, their argument, and reason they want to keep our members from making more money is because ‘they’re special.’ Meanwhile, we’re defaulting on our credit cards, on food stamps, dependent on the Affordable Care Act, and likely never going to retire. We think Uber likely refuses to implement a tip option to keep our income low so we have to work longer hours to make ends meet.

Isn’t tipping option incompatible with Uber’s model?

No. Uber had a tipping option for years until they were sued for skimming from the tips (our petition prevents that). Tipping is a standard of the For-Hire Vehicle industry which provides necessary income for our members to make ends meet.

Many people are misinformed that For-Hire Vehicle workers are paid enough to make a tip unnecessary, or that tips are included in the fare (they haven’t been for years)—but that doesn’t make any sense when our members are working dangerously long shifts to get by. Just with the per-mile fare, since 2011, Uber has gone from advertising their main per-mile rate of $4.90 per mile all the way down to to $1.75 now–and more than doubled the commission that they charge our members on every ride from 10 percent to as high as 28 percent. As a result, according to a survey from us, more than 30 percent of our members cannot afford healthcare.

Will tips really make a big difference in my income as a driver?

Yes! If our member is tipped at an average of two dollars per trip which is the average for Taxis, our average member may earn over $12,000 a year in tips. Tips are necessary to buy gas for the week, get an oil change, or even just buy food for our families.