June 20, 2017 (SACRAMENTO) California State Assemblywoman Lorena Gonzalez Fletcher (D-San Diego) – the author of Assembly Bill 1099 to require gig economy companies to provide their customers the option of tipping their drivers with the credit card they used to pay for the service – applauded the announcement by Uber Technologies Inc. today that the company’s drivers in California will be able to receive gratuities through the ride-hailing application.
“We did it! Together, with the hard work of drivers, riders and legislative pressure, Uber is going to allow in-app tips,” Assemblywoman Gonzalez Fletcher said. “Workers should receive the tips they earn. If a customer has to pay with a credit card, they should be able to tip with a credit card. This seems like a very easy and fair concept, and we are glad Uber recognized it needed to modernize its payment practices.”
The Assemblywoman authored AB 1099 to enable customers to tip a worker for their services if they are using a debit card or credit card to make a payment for app-based labor services. Most service apps – such as Lyft, Postmates or Handy – allowed customers to add gratuity to their electronic, in-app payments for the services that were performed. The notable exception to this practice in California and other states has been Uber, which contracts with more than 100,000 drivers in California alone. Today, the company announced that in-app gratuities would be available in Seattle, Houston and Minneapolis and phased in to other markets in California and throughout the United States by the end of July 2017 to the benefit of an estimated 2 million Uber drivers worldwide.
The ability for workers in the gig economy and the service industry to collect gratuities from a credit or debit card transaction is becoming more necessary as the economy moves away from cash transactions.
There are as many as 2 million workers in the gig economy, where transactions are almost exclusively made with credit or debit cards. According to the Pew Research Center, 56 percent of gig economy workers say the income they get from their gig work is an “essential or important” part of their finances.
A recent survey revealed that 42 percent of adults do not carry cash. That trend is even more pronounced among young people, with a majority of 18- and 19 year-old respondents stating they do not feel comfortable carrying cash. An estimated 42,000 people work as rideshare drivers in the San Francisco Bay Area alone.