California Bill Would Force Uber, Other Companies to Allow Credit Card Tips
New state legislation in California would force companies that accept credit card payments to also allow for credit card tips. Nail salons, hair salons, spas, and other venues would be required to provide a tip option with their credit card checkout process.
The most noteworthy impact of Assembly Bill 1099 would be on the ride-sharing company Uber. Currently, the app only allows for cash tips. Riders can pay for their transportation with a credit card, but they cannot add a tip when the checkout is complete. If the rider does not have cash on them, the driver could miss out on extra tip money because of Uber’s payment system.
Uber’s biggest competitor, Lyft, already allows credit card tips on its application. Users can tip in cash or select a tip amount on their phones. Lyft says 100% of the tip goes to the driver, although there may be a small portion taken out due to the cost of credit card processing.
If Uber were to restructure its app to abide by California laws, it would most likely allow credit card tipping across its platform. This is still under negotiation, but it could lead to a major shift in the ride sharing industry, as well as more money for drivers who use Uber as a source of income.