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Uber’s Plan To Let Drivers Ask For Tips May Be Illegal In Some States

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Unlike traditional taxis, Uber passengers aren’t expected to tip; you can’t even add a tip on the app. However, Uber did recently settle a class-action lawsuit by allowing drivers to solicit and receive tips, but only in cash. One big problem: This policy appears to be illegal in multiple states.

Many states and municipalities now have regulations that specifically address Uber and other “transportation network companies,” as they’re usually referred to in legalese. Unfortunately for drivers, more than a few of these regulations often restrict drivers’ ability to carry or transact business in cash.

Bloomberg Technology reports that the majority of states have laws that regulate TNCs, and 13 of them ban giving cash to drivers. That could be for off-meter rides, or it could be for tips.

In New York City, for example, drivers don’t have to turn down any tips that you voluntarily give them, but aren’t allowed to solicit them by putting a tip jar in the backseat or by asking. Violations cost the driver a $50 fine.

The Independent Drivers Guild, the group that isn’t really a union and represents the interests of drivers in New York City, plans to ask the city’s Taxi and Limousine Commission to require that tipping be part of TNC apps.

In the rest of New York state, ride-hailing apps aren’t yet legal, and a decision will come from the state capitol sometime this week. The bill that would legalize TNCs is based on model legislation for the industry, and bans tipping.

A similar statewide bill is also in progress in Texas, where Uber and Lyft don’t serve the state capital of Austin,

Lyft, by the way, does allow passengers to tip through the app. This issue is a really a battle between Uber, its drivers, and the social norms that tell us that taxi drivers are a profession that should be tipped.

Uber has historically told passengers that tips are included, or that no tip is needed, but drivers would prefer to follow the norm established for taxi drivers.

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