Uber’s ban on app tips at odds with some states

Uber Technologies has been squabbling with its drivers over the issue of tipping since the company's inception. Drivers argue tips have always been a part of their trade and should continue to be.

Uber officials think tipping is a relic of the past and wants the idea to wither away.

After some back and forth, Uber grudgingly settled on a policy in 2016 that lets drivers take cash tips, but the company still hasn't integrated tipping into the app. This irks drivers.

By telling them to take cash instead, Uber risks running afoul of laws governing the ride-hailing industry in more than a dozen states.

Over the last three years, 13 states have passed laws restricting cash payments in some form. While none of the laws explicitly mention gratuity, there's widespread agreement that most, if not all, of these rules apply to cash tips.

Supporters of these rules have said they're inspired by driver safety concerns. Each state's restrictions are a little different, with some only banning the solicitation of payments and others banning any cash changing hands.

Several of these measures explicitly require companies such as Uber and Lyft to tell their drivers that they aren't allowed to take cash from customers. In the others, the companies' exact responsibilities are unclear.

Uber does not tell its drivers in these states to refuse tips, as some of these governments require. The company said it has consistently opposed state laws banning cash, mostly because they impact tipping.

'Riders are free to offer tips and drivers are welcome to accept them, as has always been our policy,” Alix Anfang, a company spokeswoman, wrote in an email.

She stood by the decision not to add a tipping function to the app: 'Riders tell us that one of the things they like most about Uber is that it's hassle-free.”

Chelsea Harrison, a spokeswoman for Lyft, said the company isn't worried about the laws.

'Lyft already enables a cashless ride through our in-app tipping function,” she said.

To date, the biggest states with ride-hailing rules including anti-cash language of some kind are Michigan, Pennsylvania and Virginia. Despite the immense attention lavished on all things Uber, the bans on cash - and Uber's practices in those states - have attracted little public attention, said Tim Frisbie, communications and policy director at the Shared Use Mobility Center, an advocacy organization promoting alternative forms of transportation.