Uber Founder Finally Admits What Tipping Was Really Built To Do — Manipulate Riders and Drivers Alike [Roundup]

News and notes from around the interweb:

  • Uber’s founder on how in-app tipping is designed to cheat both the driver and the customer – and once one app player does it, anyone that doesn’t will lose out. Kalanick, of course, was famously against tipping, since the whole value proposition of Uber was the elimination of frictions.

    [I]t’s a tool for maximizing price paid by consumers… eaters are economically irrational with tip, for every $1 in tip, they economically behave as if it were $0.80 (directionally true but hypothetical figure) … this means less price elasticity for the same price… couriers are also economically irrational with tip, for every $1 in tip they economically behave as if it were $1.20 (directional)…

    The app that decides to pay the same net amount to the courier but as a square deal vs a drop fee + tip will lose market share every day to an equal marketplace player that implements and maximizes tip

  • Cool.

  • With LAX terminal 5 shut down for construction, the temporary American Airlines lounge in the Bradley international terminal gets good reviews, for what it is.

    Temporary Admirals Club at LAX TBIT
    byu/silvs1 inamericanairlines

  • They used to call this “CleanPlus”

  • I’m an aisle guy, but window seats can be special:

    @christiannielsenmedia Once in a lifetime? Probably. On the night between November 11th and 12th, I was flying home from Iceland just as multiple solar flares had hit Earths atmosphere causing a “severe geomagnetic storm” (source: Space.com). I feel very lucky. Peak aurora year. Peak aurora month. Window seat facing north. I usually share my then & now photos, but this was too extraordinary not to share… #aurura #northernlights #iceland #auroraborealis ♬ original sound – Christian H. Nielsen

  • A passenger was cold on a 45-minute flight, so they asked a flight attendant for their jacket. That would be service, wouldn’t it? At least if they’d offered. But I can’t imagine asking!

    @elizabethdarbe imagine how tired we are #flightattendant ♬ original sound – liz darbe ✈️ flight attendant

  • Bring your own hard boiled eggs on a plane, yea or nay? Surely this is much worse.

    @elizabethdarbe imagine how tired we are #flightattendant ♬ original sound – liz darbe ✈️ flight attendant

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I don’t find the blanket question followed up by the jacket question to be strange. Mostly cabins are too warm but some are frigid. I almost always have a jacket with me for the times the cabin is too cold. Yes, sometimes it is a pain to carry. The flight attendant needs to review what comforts were provided in the past as opposed to the make the passenger miserable version of today and opposed to trying to make the passenger look stupid.

  2. Personally always suspected this. I would imagine to this is responsible for increases in prices in some areas. Say you tip 1 dollar on 10. The program over time increases it to 11 dollars and so forth. Diabolical.

  3. Ive never once tipped on Uber or lyft. The whole point is it is a flat rate to take you from point A to point B.

  4. Wow, I think this makes 7 consecutive posts without a single comment from 1990. An early Christmas miracle, perhaps? Whatever the cause, I’m loving it. Makes for a far better blog experience.

  5. @Mike Hunt — You rang? Scamming scammers gon scam. Did you really need me to restate the obvious for you? Gary said it well enough. No notes, dawg.

  6. I understand Uber or Lyft now track the amount of tip paid via the app. This info is shared with the a driver on a potential pickup.
    Well, I guess that makes me an outlier and I will never get a driver.
    Yet, when I tipped the Uber driver €20 cash for a ride to the Berlin airport, he was very, very appreciative!! Same when I tipped the Uber driver with cash for a ride to the dealership to pick up my car from the shop. His English wasn’t very strong, but the smile on his face said it all!
    Screw Mr Kalanick.

  7. @ Gary — I never, ever tip on uber/lyft or housekeeping or coffee pick-up or a self-serve machine or the Sonic drive-up window, etc…or pay inflated 25%+ guilt-inducing auto-tips stuck in my face on a tablet, so not impacting my elasticity (directionally?!) at all. Uber was advertised as “all-in,” and it still is if you are smart. Employers should pay their employees, not customers.

    I reserve tipping for someone who takes my order at my table and brings my food to the table while being friendly and responsive to any requests, the guy who cuts my hair, and those who carry my bags up steep stairs and deliver them to my room immediately. The rest can go pound sand.

    I recently used Instacart and found the threats of slow delivery without big tips repulsive. Makes me want to tip zero and see if the merchant simply won’t deliver my order. If not, I can just go shopping in person or use a no-tip delivery company like Amazon.

  8. America is obsessed with tipping and it’s out of hand. Pay your drivers a living wage. Same goes for other sectors. I’ve stopped tipping Uber/Lyft drivers, I never tip for counter service, and unless service at a restaurant is really memorable, 18% is the rule (less to very little if the service is bad). Tipping exists in the US because its economy and its way of life favors the wealthy at the expense of everyone else. It is a money-obsessed culture and when the country’s out of control national debt evolves into a full on debt crisis (it will happen sooner than you think), that will be the great equalizer.

  9. @ lavanderialarry

    Agree except that a full blown debt crisis will not be a great equalizer. The creditors (banks) get bailed, the debtors get hung out to dry, and rich load up on discounted assets like your home.

Comments are closed.