When it comes to having food delivered, Americans are accustomed to offering a gratuity. But it’s a different story for people whose job is delivering people to their destination.
Only some 28% of rideshare trips result in tips, according a recently released report by Gridwise Analytics, which operates an app that tracks earnings for 500,000 active rideshare and delivery drivers.
For nearly a decade, Uber didn’t enable users to tip, “and consumers have gotten used to not tipping for that type of service,” Ryan Green, CEO of Gridwise, told CBS MoneyWatch. “We saw some of the high fares, when it’s more than $1,000 but zero tip, and that’s for six hours of driving.”
Uber, the San Francisco-based ridesharing and delivery company, concurred with Green’s observation, noting that it began to facilitate tipping through its app after vocal lobbying by drivers.
By contrast, people who deliver restaurant orders and groceries are tipped roughly 88% and 74%, respectively, of the time, Gridwise found. Tips represent 51% of earnings for those delivering food and groceries, but just 10% for rideshare drivers.
Still, tipping has become more important for Lyft and Uber drivers with the rise in inflation; in 2023, monthly gross earnings for Uber drivers fell 17% from the previous year, according to Gridwise.
“We can see directly how their earnings have been constructed in a way to be compressed, when the prices of all goods — the cost of living — is substantially higher,” said Green of Valentine’s Day protests by drivers in some U.S. cities to protest reductions in pay. Labor groups representing gig drivers say the companies are taking a bigger bite of the fares.
“They are going to have to give up some of that piece they are taking,” Carlos Pelayo, 69, a substitute high school teacher in San Diego who supplements his income by driving for Uber and Lyft, told CBS MoneyWatch.
How much do rideshare drivers earn?
Typically, Lyft and Uber collect an average of roughly 40% of fares, Green said. Lyft earlier this month vowed that its drivers would receive at least 70% of fares.
Gross monthly earnings for an Uber driver averaged $1,409.71 in 2023, down from $1,699.58 the prior year, according to Gridwise data. On average, drivers for the company worker 56 hours month last year, down slightly from 58 hours in 2022. In 2023, the typical Lyft driver worked 44 hours a month, which amounted to earnings of 1,058.32.
Uber drivers earn a median of $33 an hour when driving a fare, including tips and bonuses, according to the company. Lyft drivers using their own vehicles grossed $30.68 (including tips and bonuses) per hour of engaged time, and after expenses earned $23.46, according to Lyft.
Uber Technologies this week said it would repurchase as much as $7 billion in shares after reporting its first full year as a profitable public company. The offering to investors followed a strong earnings report, with Lyft following suit with solid results this week.
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