In the 'old' days of transportation, if you took a cab ride, it was pretty standard for you to tip. But just how much were tips?
According to the New York City Taxi and Limousine Commission (TLC), tips have been holding at a steady rate of about 18% for cab rides in New York City. In 2014, for example, the average fare for a ride was about $13, which means an average tip amount of $2.40.
Now, to put this in perspective, there were about 175 million taxi trips in NYC in 2014, meaning a total fare revenue of $2.2 Billion, and total tips given about 400 million dollars. That is a lot of supplemental income for drivers.
Things are not very similar in the brave new world of ridesharing. With Uber setting the trend of not tipping drivers in its early days, the general experience for drivers has been low tips on Uber rides. However, competitors like Lyft allow riders to give tips, and it is interesting to look at what tipping is like in the ridesharing world.
For starters, there is this video of Lyft advertising tipping to its drivers. As of November 2016, Lyft claims that over 100 million dollars has been paid out in tips.
But this doesn't provide a lot of details about per-trip averages. Looking at Lyft investor reports obtained by TechCrunch, by this time in 2016, we can estimate that Lyft has done about 300 million rides in all of its existence from 2012 through 2016. So, that would give us an average of 30 cents per trip.
In order to see how this compares to cabs, we first need to figure out the average value of a trip on Lyft. From the same report, in 2015, Lyft had about 90 million rides, and total rider revenue of about 1.2 billion dollars. That means, the average fare per ride on Lyft is about is about $13 dollars, which is fairly similar to the average cab ride fare we discussed above. With that in mind, with an average tip of 30 cents on a $13 ride, the percentage of Tips on Lyft is about 2.3%. So, really, not much.
However, there seems to be an improvement that is happening over the years. Perhaps, as more and more ridesharing passengers are realizing they should probably tip their drivers, the average tip per ride seems to be increasing. In a recent thread on a Lyft Drivers Forum, about 50 people reported their average tip per ride in 2016 as reported by the Lyft year-end summary email to drivers. The average on the forum was about $1 dollar in tips per tip. Still, tips are important because drivers get to keep 100% of the income.
Tipping on Uber is a different story. Because the Uber app doesn't allow tipping, there is no formal way to calculate tips. A driver for the popular ridesharing blog RideSharingGuy drove with a cash only tip jar, and received $6 in tips on a Monday afternoon and evening drive. Another Uber driver in Las Vegas reports making up to 20% of his Uber income on tips, and there are plenty of stories of people getting $20-$50 tips a day.
At PAX tips, we were asking the same questions about tipping, and we wanted to find out what would happen if passengers can tip easily with cash or credit. With the PAX box, the average tip amout drivers received was about $70 a week.
In summary, ridesharing tips have a long ways to go before becoming comparable to taxi tips. However, the trend is changing, and more riders are willing to tip if it is quick and convenient to do so, such as with the Lyft app or with PAX for Uber.