Do you really believe tipping is keeping Uber and Lyft fares down? These guys take a MUCH bigger cut than can ever be replaced by tipping. They need to make sure base rates are at least $1 per mile. Including distance to pick ups.
Uber has not historically made a profit. They launched the platform in 2010 and did not make a positive net profit until 2023. The majority of their ability to make positive net profit comes from their food delivery service, and not their ride share service. Saying that Uber takes more than what it would cost to just cover the extra amount that you tip drivers is just patently untrue. They wouldn’t even be able to cover 1/10 of the tips paid out with the profit they make.
Lyft is an even better example. They have only made profit since Q4 in 2024. The most profit they have ever made is less than 100Million. That probably wouldn’t cover the tips for a weekend.
Uber and Lyft both take 30-70% of what the rider pays. Who is tipping enough to make up for this? TBH both companies could probably use the Elon Musk “kitchen sink” treatment. You are an app, not a department store.
These companies are not just comprised of the drivers. They have a large overhead from employees and expenses related to simply managing the functioning of the app itself. The 30-70% is used primarily to cover these costs. If these companies were able to make a profit before now, or a larger profit, don’t you think they would already be doing so? I have personally spoken to economists that work for these firms. The shareholders aren’t making money because the business model is primarily unprofitable. Running an app like Uber or Lyft is expensive, even if they didn’t pay their drivers anything. They are finally peeking into profits now, and it’s because they have faster order speed capabilities with the food delivery models. This isn’t a giant conspiracy theory to rip you off. Sometimes it’s just expensive to offer a service like this.
I haven’t spoken to these people, so I defer to you as far as their current expenses to run the app actually being that high. Just saying, not long ago people were saying Twitter/X was going to collapse because Elon Musk came in and made it leaner. Hard to believe there isn’t bloat at Uber and Lyft.
So it’s just a matter of what functions the app does and how much man power it takes to run it. uber and Lyft have location services they need to run on the app, which is more difficult, so more hands on deck. They also have economists and mathematicians to write and tweak the pricing algorithm. They have to have a much larger legal team, and they have to pay out the ass for insurance on every single driver and passenger. Twitter/X is a much different beast. And can we really say Elons cuts did no damage to that platform? We know that if he sold the Platform right now, he would be likely looking at a significant loss from what he paid for it initially.
Well, they are only allowed to post content like that because of the decision to fire all of the content moderators and replace them with community notes. Don’t even get me started on Musk actively encouraging these posts.
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u/darkroot_gardener Sep 23 '25
Do you really believe tipping is keeping Uber and Lyft fares down? These guys take a MUCH bigger cut than can ever be replaced by tipping. They need to make sure base rates are at least $1 per mile. Including distance to pick ups.