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Why is Uber Eats Paying Less With the New Tip Update?

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I'm not sure I can answer why because I'm not sure that Uber Eats IS paying less with the new update that shows the total expected pay for an offer including tips.

That said, a lot of Uber Eats couriers feel like Uber Eats is paying less – a LOT less – and especially that tips have gone way down.

That hasn't been my experience at all. The average per delivery, average tip amount and hourly profit have gone up for me since the change happened.

So what's going on? Are customers tipping less? Is Uber Eats paying less? Is it harder to make money now under this system? Let's talk about it.

 Why Is Uber Eats Paying Less and Why Are Customers Tipping Less Now That We Know what deliveries will pay?
Why Is Uber Eats Paying Less and Why Are Customers Tipping Less Now That We Know what deliveries will pay?

What are the drivers saying?

Just less than 2 months ago, we talked about Uber Eats starting to change things up in how they present delivery offers, on Episode 83.

My articles normally might get just a comment or two, if that. Comments have blown up on that article, mostly from drivers who feel like they are getting paid less.

As Uber Eats rolled the changes out in different markets, I've been surprised to see a lot of drivers who feel like Uber Eats is paying less with the new tip update.

Some of the comments I received

This new tipping system has got to go! I make less now. First off it says pay could be higher… Yea no! Why would someone go back and tip more. They don’t. It can happen but rarely maybe if you hand the food over on a gold platter. Deleting their tip is far more likely to happen even though you’re trying your best, sometimes delays, things missing, etc are simply out of your control.

Comment from Rian

This Is soooooo stupid! I am not getting tipped as much. UE like Door Dash is now making or suggesting the tip upfront, so the customers just go with that. It has usually been a gamble with tips, but overall UE tips were much more! I am SOOOOO Angry about this new change. Door Dash was always my backup to UE. I always preferred UE over DD. Now they are doing the same damn thing.What this makes me do is accept orders from Door Dash now before I accept an Uber Eats order. I hope they get this feedback, and return to the older system. I now have no favorite app to deliver from.

Comment from Bill

It's not pretty, is it?

The reason they include the tip, is now they can offer less money, because combined with a good tip, they know you will take the order. Before they were having to pay $8 sometimes on orders where you got a $20 tip. Now they can get away with paying you $5 on the same order. So what they have done is reduce surge.

I agree, before I would take orders where tip was likely only $1 or $2 because it was worth it with Uber’s pay. Now I am declining almost all of those orders I used to take. I used to take $5 orders that I thought would tip $1 or $10, I took them both. But now, I am not gonna take a $6 order when the next order is $11 for same time and distance. This system screws customers who don’t tip as much. So what Uber is gonna do is make doubles with a tipped and non-tipped order or require higher acceptance rate. I like the control. I like the old system too. Also, I like the mental challenge of doing math on each order to determine if it is good order!

Comment from Jeremy

Hi, I’ve been doing this since june so it’s pretty fresh. In June, July and August I used to make more than half of my incomes from tips! Since they started to show the potential amount including tip, I feel like people don’t tip as much. Before, for a $140 day, $70-75 was from tips. Now I don’t even reach that and out of a $90 day, maybe $30 is from tips… It really feel like people were tipping more before they made that update. It’s not worth it anymore for me.

Comment from Med

This was just an example of several comments.

And the thing is, so far comments are overwhelmingly against the new system. I mean overwhelmingly!

So I'm wondering if that's representative of what Uber Eats couriers as a whole are feeling. Or is it just that the ones who feel that way are the most likely to comment because they feel the need to vent.

I get it. If a change is causing me to lose money, I want to vent as well. Fortunately I have a podcast where I can do that.

My experience is different.

Why is it some are making less on Uber Eats while I'm finding it is paying more, both because of the same tip update?
Why is it some are making less on Uber Eats while I'm finding it is paying more, both because of the same tip update?

I'm very surprised by the reactions so far. Usually I think I have an idea of what people are feeling, but this caught me off guard.

Maybe because my experience has been exactly the opposite.

Is Uber Eats pay or tipping less with the new tip update? In my experience, no. It's up for me.

In the seven weeks since Uber Eats made the change in my market, I've completed 223 Uber Eats deliveries. In the 7 weeks prior, I completed 247 UE deliveries. Here's how it broke down:

Average delivery pay

Under the old system, I averaged $9.83 per delivery.

Under the new system, I averaged $10.62 per delivery.

That's a 7.4% increase pay per delivery

Average tip amount

Under the old system, the average tip was $4.18

With Uber Eats including the tip in the offer amount, average tip has been $6 even.

That's a 43.5% increase in tip per delivery.

Profit per hour

My profit per hour when they weren't including tips in the offer was $25.03.

My profit per hour under the new setup has been $30.18.

And all this while boosts and promos have been decreasing as things are slowing down. My profit per hour has increased by 20.5%

If you're not familiar with the profit per hour that I use, I calculate 25 cents per mile as my cost, as that's right around what my actual cost of my car per mile is. So it's earnings minus 25 cents a mile, and divide that total by hours on the delivery.

Other notable statistics:

The average time to complete a delivery was 20 minutes 25 seconds prior to the change. It dropped to 18 minutes 40 seconds with the change. I averaged 4.4 miles per delivery previously and 4.1 miles after the change.

Average base pay was $3.69 per delivery prior to the change in August. That was $2.60 for the fare and $1.09 for the trip supplement. In that same time, average boost was 52¢.

Overall the Uber Eats portion of my pay including all base, supplement, and promotions was $5.64 per delivery.

After the change was made, I received $3.16 base pay ($2.52 for fare and $0.64 for trip supplement). The average boost was 21¢, another sign that things have slowed down a lot in the latter 7 weeks.

Overall, my pay from Uber Eats was $4.62, more than a dollar less.

A week by week breakdown of the average pay for the week. You can see the tip portion of the pay increasing quite and the average pay increasing in the time since the change was made (the thick line in the middle)
A week by week breakdown of the average pay for the week. You can see the tip portion of the pay increasing quite and the average pay increasing in the time since the change was made (the thick line in the middle)

So the bottom line is, the portion of my earnings from Uber went down significantly and the tip amount went up even more significantly. Tips were 43% of what I received prior to the change and 57% after.

From $9.83 per delivery to $10.62, all while the Uber Eats portion of my pay was reduced by 18%.

That's quite a bit different an experience than what I'm hearing from others.

Wait… so, is Uber Eats paying less out of their own pocket with this new tip update?

Wait, why is it one moment I'm saying I'm making more but another moment I'm saying Uber Eats is paying less out of their own pocket?
Wait, why is it one moment I'm saying I'm making more but another moment I'm saying Uber Eats is paying less out of their own pocket?

The portion of my pay that came from Uber Eats did drop substantially.

That said, I don't think it's because of a change in how Uber Eats figures their pay. Of course, now that they changed to a less transparent pay model they could do that without anyone knowing.

But here's the main reason that I don't think they changed anything. The base pay was nearly identical. From $2.60 under the old method to $2.52 under the new.

I would expect that because time and distance are factored into that base pay. Both were reduced in the deliveries I did under the new system. So nothing seemed to change there.

Differences in trip supplement and boost

The biggest changes were in trip supplement (down 45¢, a 42% drop) and in Boost pay (down 31¢, a 60% decrease).

For those of you new to the Uber Eats pay model, I'll quickly explain the two.

Uber Eats bases their pay on a few things:

There's the base fare. That's the piece that's calculated mostly on picking up, dropping off, miles and time involved in a delivery. We no longer know the formula they use.

Then they include what they call a trip supplement. This is a lot like how Doordash uses a factor called Desirability. Essentially, if Uber Eats thinks they'll have a harder time getting someone to take an order, they boost this amount.

On top of that, they'll add some incentives to get drivers out when they need drivers. They pay a boost, which is a percentage increase over the base fee, during busier times. If they think they'll need more drivers, they increase the percent.

Finally there are some other incentives and per delivery bonuses.

Why I think the drop in boost and trip supplement are normal.

Now that I have a better idea what I'll be paid on a delivery, I'm accepting better paying deliveries on average. I know the ones that won't pay much, so I know what to avoid.

The trip supplement kind of becomes Uber Eats's way of sweetening the deal on deliveries that won't pay as much.

If I'm taking higher paying offers now, that means that there are fewer of the deliveries where the deal needed to be sweetened.

As far as the boost, if you've delivered for Uber Eats for long, you know that the boosts go up and down with the need for drivers. If Uber Eats needs drivers badly enough, they increase the boost. If they have more drivers than they need, the boosts shrivel up like the fruit that sits in the basket for two months.

I expect the boosts to drop because things are slowing down here. It's become very noticeable. As we get into colder weather, they'll probably go back up.

What I'm getting at is, no, I don't think Uber Eats has decreased their pay as part of this. I think it's the circumstances of the deliveries I take and the slower climate overall.

So why is it seeming to so many like Uber Eats is paying less (and that tips seem down) to so many drivers with this new tip update?

Based on all the comments like I listed above, that kind of thing isn't imagined. I don't doubt that some folks are truly making less. So why is that happening?

I have a few thoughts.

You've had enough time now to figure out that they're not paying less than offered.

There was a lot of confusion right when the changes rolled out. I had a couple of comments in different places that Uber Eats would offer so much and then the pay would be lower.

That's because nothing changed with the way that Uber Eats shows you your earnings. The only thing that changed is the offer amount now includes the expected tip. But here's what happens:

Uber Eats offers a delivery. We'll say that their fee for the delivery is going to be $4. The customer added a $6 tip before the delivery. So now Uber Eats shows you the expected earnings of $10.

Okay, great, you take it. You deliver. Then you see the earnings pop up for the last delivery.

$4???? What happened to the $10?

Just like they have since the beginning of the year, Uber Eats immediately shows you the portion that THEY are paying. They don't include the tip in the earnings because they do give the customer an hour to add or subtract from (or delete) the tip.

When you look at the earnings an hour later, the tip has been added. It's the $10 that they offered to begin with.

There are only four instances where the earnings change (and three of them are in our favor)

If the customer decides to add to the tip, you'll make more.

If the delivery took substantially longer than they estimated or the distance was substantially longer, you may make more. Uber Eats still uses real time information to adjust for longer waits.

If the customer originally tipped more than $8, you'll make more than the offer. Uber Eats is apparently capping the amount that they add to the expected pay at $8. If Uber Eats were to pay you $4 themselves and the customer tipped $20, the offer is only going to show up as $12 ($4 plus the $8 cap). In the end, the actual pay would be $24.

If the customer reduces or deletes the tip, you will make less than the offer.

In 223 deliveries, I've had several that paid more than the offer. I've only had one that paid less. I was expecting that one – the customer was messaging me before I even got to the restaurant because the order was already quite late by the time I received the order. I was sure that the tip would be pulled completely but they only dropped it $2.

Nothing has changed in the tipping itself.

I know some feel like now that the customer tips before the delivery, the tip amount has gone down.

Uber Eats customers are not paying or tipping less with this new tip update, because nothing has changed in how they tip. Uber Eats has been allowing customers to tip when they place the order since JANUARY of 2019. That's a year and a half ago.

They did not make that change just now. It happened a long time ago.

If you've been around long enough, you know how different tipping is with Uber Eats. Back when customers could only tip AFTER the delivery, most didn't. If you got tips on 40 to 50 percent of deliveries, you were doing great. Tipping improved dramatically once they allowed customers to tip when placing the offer.

There has been no change in how customers tip. The only change has been that Uber Eats is now letting YOU know what the total will be INCLUDING the tip.

So I do have some theories on why Uber Eats is paying less and tipping is lower for some contractors with the new tip update
So I do have some theories on why Uber Eats is paying less and tipping is lower for some contractors with the new tip update

Theory number one on why it seems Uber Eats is paying less with the new tip update: More bad offers.

I do believe that a higher percentage of delivery offers that you see on your phone are lower paying.

But I don't believe that there are more lower paying deliveries.

Wait… that doesn't make sense. How can that be?

It all has to do with what offers are being rejected and accepted.

Under the old system, you had no idea if you were getting a tip or what the tip amount would be. All you were being shown was what Uber Eats was going to pay. So you decided based on other things.

With the new system, now that Uber Eats is showing the TOTAL expected pay, you know when an offer is a stinker. When you see that $3 or $4 offer, you know the customer didn't add a tip when they ordered.

A lot of people would have taken those offers before, but now that it's obvious that this thing won't pay much, they get rejected a lot more. So if you reject it, it gets sent to someone else. Sometimes it comes back to you again – I've had that happen. It keeps getting offered out there until someone finally accepts.

At the same time, good offers are snatched up more quickly.

One thing I didn't like about the new system was I felt like it took away a bit of a competitive advantage.

Most people are lazy. They don't want to put the thought into what might make a delivery good. They see dollar amount and miles. Ultimately, they don't want to put the brain energy into thinking about the restaurant or anything like that. So too often they pass on some really good offers.

But now that everyone knows the full amount, even the lazy drivers will snatch up the good ones.

And that means the bad offers are floating around longer, the good offers are taken immediately.

Because a no tip delivery might get offered a dozen times and rejected a dozen times, it's still hanging out there longer. The good deliveries aren't staying out there.

What that means is, any offer you receive has a higher percentage of being a stinker. And when you get stinker after stinker after stinker, it's easier to cave in.

This is especially going to impact you if you take everything that they throw at you. The number of stinkers hasn't gone down, but the number of times it's been passed around has. And if you just take everything, your pay will go down because of this.

Theory number two on why it seems Uber Eats is paying less with the new tip update: People havent' adapted to the new system.

I mention the improvement in my pay under the new system for a reason.

Because I make more money doesn't mean that pay overall has improved. In the same way, because you're making more doesn't mean that Uber Eats is paying less with the new tip reporting system.

What has changed is how we accept and reject deliveries.

Under the old system, I relied a lot more on “reverse cherry picking.” Uber Eats pays much better for the additional time and distance for longer deliveries. That made the old offers deceptive. A $10 offer looks appealing to some, but I knew that $10 almost always meant a LONG drive and a long time to complete the delivery.

So I focused more on shorter time and distance.

The change in how Uber Eats revealed the tip allowed me to make better decisions.

I think that much of the reason that I've been able to do better is that I already had a well defined idea of what a good delivery meant.

I had a 50 cent rule. My price is 50 cents per minute. A Delivery has to pay 50 cents a minute to be worth taking.

So things changed. Now I know what an offer will pay. With all the other information that Uber Eats provides it's real easy to evaluate.

I double the offered pay and that gives me maximum minutes. A $10 delivery has to be done in 20 minutes to be worth taking. A $5 delivery has to be done in ten minutes. Both scenarios pay $30 per hour, or 50 cents a minute.

Many who are making less are probably accepting deliveries they wouldn't have in the past.

If you don't have a good comprehensive idea of what a good delivery is, it's harder to adapt to a new method from the platform.

If you're used to the old system where tips aren't included, you might take that $5 delivery because you're pretty sure a tip will come with it. And most times it does, right?

So now, new system, and here comes a $7 delivery. The way you're conditioned that seems like it's sure to be better than the $5 delivery. And somewhere in your mind you're used to getting a tip on top of that.

That extra tip isn't happening, folks.

Because the tips have always shown up later, I think we've gotten this false idea that we're getting more because of our service. People aren't changing the tip that often. The reality is, they never have been. But it feels like it.

So we're more likely to hope it will be more than that $7. And ultimately, you just picked a bad delivery.

How to make better decisions on deliveries with Uber Eats.

Ultimately I think the reason why Uber Eats seems to be paying less for some drivers has to do with their decision process has changed. We need to look at how to accept delivery offers differently with the new tip update.
Ultimately I think the reason why Uber Eats seems to be paying less for some drivers has to do with their decision process has changed. We need to look at how to accept delivery offers differently with the new tip update.

Uber Eats is not paying less with this new tip system. They're not paying more. The customers are not tipping less or more either. The whole process there has not changed.

The only thing that's changed is how they are presenting the information to you.

It's honestly a fantastic opportunity to make more money. It just involves putting more thought into the decision process.

Here are three secrets to making more on Uber Eats deliveries.

Assume that what you see is what you will get.

Do not go in hoping the customer will tip more. Customers just don't go in and change the tip. Not that often. I'm talking less than 5%, probably less than 2%. It's not often enough to make a decision based on hope.

The only time you consistently get more than what's offered is on offers that are already high dollar amounts. It only happens consistently if the customer tipped more than $8. What do you think the normal delivery fee would be? Add $8 to it – so it's got to be AT LEAST that much for it to have a chance.

In other words, if the offer is under $11, your chances are extremely high that that's all you're going to get.

Set your price

The most comprehensive way to decide on a delivery is to set a price per minute. It's real easy to do with Uber Eats now that you have total price AND estimated minutes. Quick math, that's it. I set my price at 50 cents a minute and I'm hitting that.

Can you get 50 cents a minute like I am? I don't know. I know you won't get it if you're not setting a minimum. Maybe go at 40 cents a minute.

Divide dollars by minutes. Uber Eats gives you both. Pay attention to how accurate that minute amount is on the offer screen and adjust accordingly. Divide dollars by minutes and if that total meets your price, take it.


And don't set your price too low. I really recommend at least 40 cents a minute.

And maybe try 50 cents a minute for a long enough time.

Be ready to say no.

There's really no excuse for having your tip amount be significantly lower than what you're paid by Uber Eats. You know the amount now.

If you don't like getting more from Uber Eats than you do in tips, then don't accept deliveries that don't pay enough in tips. You have an idea how much that delivery fee shold be. That means you have an idea what the tip should be.

Don't accept crappy orders and then complain about what you were paid.

Could this help someone else? Please share it.

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Tommy Maverick

Thursday 29th of October 2020

I'm from a customer perspective. Why is tipping a thing? isn't Ubereats paying you to deliver the food instead of the customers? It just ridiculous how a company can't take care of their employees and expect the customers to pay "tip" to make the ends meet.

Dave Wheeler

Friday 13th of November 2020

You may be under the wrong impression that drivers receive the service fees you pay UE. None of that goes to the driver. UE is upcharging the menu item cost for you, plus additional fees. The restaurant pays a commission to UE of about 25%. The drivers pay about the same to UE. So you can see that UE is the only entity making money. The restaurant definitely loses but during this time it’s a necessity. Drivers are paid 2.50 base per delivery. We pay for our gas, taxes, insurance, parking if needed, occasional parking violations, and Uber’s commission. Most of us average less than minimum wage but with many of us having lost jobs... The food delivery services are not models that are built to last. Theyre designed to make quick money for the company. It’s also not for every customer. It should be considered a luxury service. If having someone else brave the weather, saving you gas and time, affording you the time to relax, plus having someone else protect you from possible Covid contact isn’t worth your tip, you should rethink it. For the most part customers are very appreciative for the service and realize that they’re going to pay for any other service. Perhaps you shouldn’t use UE. It’s really not that much trouble to pickup your own orders.

ronald.l.walter

Monday 2nd of November 2020

That's a good question. I think the whole question of tipping as a societal thing is an important discussion.

Here's how I see it as a driver. Personally, I don't care.

That's because I'm not an employee. I'm an independent contractor, meaning I'm doing this as a business. As a business it comes down to this: Am I getting enough for this delivery to make it worth doing? I really don't care if it comes from Uber Eats or it comes from you, or whatever combination it is.

You and Uber Eats have to work out who pays what. If whatever the two of you work out is enough to cover my time and the cost of running my business (including the cost of using my own vehicle) then I'm glad to deliver your food to you. If it's not enough, that's cool - hopefully, you'll find someone who will do it for you. I'll find someone else who will pay enough.

It's like if I ran a widget store. It costs me so much for overhead. It costs so much for the overhead. And then there's the time to operate it, whether I do it myself or I hire someone. I have to sell my widgets for enough to cover all that and for it to make sense to do it. The thing is, no one owes me anything. I can't force people to buy widgets at my price. At the same time, someone can't just walk in and expect to buy the widget for less than it costs. There's a balance in there somewhere.

Sometimes the market just doesn't support that widget store. Not enough people are willing to buy widgets or able to buy them at whatever it costs to keep the store in business - and if that's the case then hey, it was a bad business model. Time to close up shop and do something else. Either someone else will provide widgets, or people just won't be able to get widgets any more.

I don't expect you to tip. I also don't expect Uber Eats to pay me a higher delivery fee. Whatever anyone wants to offer me for my services is their choice. But if it's not enough, it's my choice to say no thank you. You don't owe me anything. And I don't owe you. I'm okay with that. If you and Uber Eats don't offer enough to meet my price, that's cool. Someone else will. Hopefully, the two of you can find someone who has a lower price.

Alberto Benitez

Thursday 29th of October 2020

Before the new system the shortest delivery (lets say 15 mins) was 3 dollars flat. Now I had get$ 2.70 rides. Of course I know better and don't take them anymore. So during the first months of the pandemic I was making 18 an hr and then it went down to 14 and with the new system down again to 12 am hr.

Michael Cuellar

Tuesday 27th of October 2020

Forget theories and everything you mentioned. Here’s the numbers. I used to make 120 to 150 every night I’d work from around 5 to 10. I’m barely making 80 now.

Berenice

Monday 2nd of November 2020

Exactly the same is happening to me. Also do you see the surges and the red on the map? I haven't seen it in 2 weeks now maybe 3.

david dravenack

Wednesday 21st of October 2020

The tip up front for Uber was great but I notice now. Almost all the orders I get are 2.50 to 3.50. That’s including the tip. Any idea what’s going on?

Mike

Friday 13th of November 2020

Its not about the TIp. UBER IS NOW PAYING LESS PER DELIVERY!! Because when they show the tip it seems like it's a good trip when compared to the way that used to be Uber paid a lot more per trip now they don't have to! That's why the drivers hate Uber among other things.

Comments are closed.