• Uber and Lyft drivers are struggling with inconsistent tipping.
• Americans were less likely to tip rideshare drivers in 2024 than drivers for platforms like Grubhub.
• Drivers are trying new strategies, while others say it's not worth the effort.

Jay Keleher said his Uber passengers don't tip as often as they did a few years ago. To combat that, he'll try to win them over with a joke.

"If you can make someone laugh within the first 30 seconds, it's going to be a good trip, and you're going to have a good tip," the 42-year-old told Business Insider.

But strategies like this have only helped so much. Keleher's tip rate — the amount he received in tips relative to his base earnings from trips — is 11.6% this year, according to screenshots from 10 weeks between January and March provided to BI. Per Keleher's calculations, his tips as a share of his total earnings have dipped from about 17% over the last four months of 2024.

Keleher isn't the only driver struggling to land tips. Drivers, riders, and gig economy experts told BI that tipping customs for rideshare drivers, rising fares, and inconsistent driver service could be contributing to lower tips. However, while many drivers are testing new strategies to increase the frequency of receiving tips, others have given up — some said the efforts rarely paid off.

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Data provided to Business Insider by Gridwise, a data analytics company that helps gig drivers track their earnings, showed that Americans were much less likely to tip their Uber and Lyft drivers last year than drivers for platforms such as DoorDash, Grubhub Instacart, and UberEats. Gridwise analyzed 171 million trips to compile its findings.

"While tipping culture in restaurants is fairly well-established in the United States at this point, it's still evolving when it comes to rideshares, and many riders may not understand the financial realities of rideshare driving," Nick Leighton, co-host of the manners and etiquette podcast "Were You Raised By Wolves," told BI in June. "This may explain why there's so much inconsistency currently in when or how much riders choose to tip."

Uber told BI that its drivers and couriers collectively earned $20 billion, including tips, in the fourth quarter of last year — a 16% increase from the same period the year prior. Lyft pointed BI to statements made by CEO David Risher in the company's latest earnings call, in which he said drivers collectively earned nearly $9 billion in 2024, more than any other year.

Seven ride-hailing drivers shared what strategies have helped them land tips and why sometimes providing good service is not worth the effort.

How drivers try to win over customers and get tips

Christina, an Uber and Lyft driver in Las Vegas, said about half of her passengers tip on a good day. She feels tipping is inconsistent and that sometimes her efforts to please customers go unnoticed.

"The last few months have been hard," said Christina, whose identity was verified by BI but who asked to use her first name for fear of professional repercussions. "The pay from Lyft and Uber has been not enough to cover gas at times. It's made me look at alternatives."

She keeps a clean car, has a bubbly personality, and tries to connect with passengers by asking questions. But she's not always talkative: When she looks in the mirror and sees a passenger on their phone, she takes that as a cue to stay quiet.

"I think when a customer feels closer to you as a person — that they could see themselves in the position of the driver — then they are more likely to tip," Christina told BI in June. "However that still doesn't guarantee a tip because I've had fantastic rides and conversations, and they give me a compliment but no money."

When her mother was dying a few years ago, Christina sometimes mentioned it in conversation, which drove up tips. Still, she has to fight for tips. Some riders have told her they don't know how to tip, forcing her to show them on the app. Some international passengers don't tip because they don't understand tipping culture, she said.

Being helpful to tourists has been an effective strategy for Marilyn Cassidy, an Uber and Lyft driver in Myrtle Beach, South Carolina. She drives a few days a week to supplement her Social Security income and gets tips for nearly 50% of her rides, she told BI in June. Cassidy said female passengers are often relieved to have a female driver and tip more. Still, she acknowledges there's only so much she can do. Sometimes, the app's navigation falters, she said, which can delay some rides and result in lower tips.

"There are some days when I don't see any tips at all," Cassidy told BI in June.

Some drivers like Jillian, 67, who is based in Santa Clarita, California, have a simple solution for getting more tips — before riders exit her car, she asks them nicely if they could leave a tip.

However, it's not a perfect strategy. She told BI that tipping continues to be unpredictable.

In addition to telling jokes, Keleher said he tends to avoid accepting ride requests for passengers who have below a 4.7 rating, in part because he thinks they'll be less likely to tip. He said drivers rate passengers before knowing whether they receive a tip — so tipping isn't incorporated in the rating — but he still thinks a highly-rated passenger will generally be more likely to tip.

Some drivers have given up

Alex Santiago, an Uber driver in northern Virginia, used to dress business casual and catered music to passengers. But after years of inconsistent tips, he stopped trying so hard.

Some days, he drives with slippers on. Other days, he listens to podcasts he wants to hear. After making these changes, he said he hasn't seen tips decline.

"I'm not providing amenities such as water and games — I don't run a day care, I drive a car," Santiago, who's in his late 40s, told BI in June.

Jason S. told BI in June that the frequency and quantity of tips he's received fell during the pandemic. Between a third to half of riders tipped him pre-pandemic, but last year he was lucky if it was one in six, he said. He suspects increasing rates for riders has reduced tips, as he hasn't changed his driving habits.

"I used to look at tips as extra, now I desperately need those tips to keep my hourly up," Jason, who's in his early 50s, told BI in June. "I used to be able to earn anywhere from $32 an hour up to as much as $55 an hour with good bonuses. Now, if I hit $25 an hour, it's a miracle."

He thinks there's nothing he can do differently to maximize tips. Those who tip likely always tip regardless of service, he said.

For some drivers, trying to get tips can backfire.

Andre Kingston said passengers sometimes reprimand her for trying too hard to get tips. The Detroit-based driver said she's received one-star reviews for "talking too much" or not being polite, even though she says she always greets people and asks them for their music selection.

Kingston, who's in her early 50s, told BI that tips are rarer and lower than last year. She suspects it's because of higher fare rates.

Low tipping levels prompted Jason D, a 50-year-old Uber and Lyft driver in Phoenix, to no longer provide the same level of service.

"I used to open doors for everyone and adjust the seats for everyone and offer whatever music request any passenger wanted and engaged in whatever conversation the passengers wanted to engage in," he told BI in June. "But I don't get tipped for it anymore, and I'm over it."

He said his new strategy is to not accept rides that pay him below $20, even though this has lowered his acceptance rate and made him ineligible for Uber's driver rewards program. He said receiving a customer's appreciation isn't as useful as a tip.

"I am not working for star ratings or appreciation," he said. "Those do not pay my bills."

This story was initially published on June 28, 2024, and was recently updated with additional interviews and data.

• Democrats may need to help Republicans raise the debt ceiling this year.
• If that happens, Democrats aren't going to do it for free. They'll likely demand concessions.
• Rep. Ro Khanna, a Silicon Valley Democrat, says his party should demand a federal minimum wage hike.

At some point in the next few months, Congress will have to raise the debt ceiling.

For now, Republicans are planning to do it on their own. But if past is prologue, they'll probably need votes from across the aisle — and Democrats are likely to demand something in return.

Rep. Ro Khanna, a Democrat who represents Silicon Valley, told Business Insider this week that he believes the price should be an increase in the federal minimum wage.

"We should force Republicans to vote on it," the California Democrat told BI.

Khanna did not specify a particular level at which he'd like to raise the wage, but Democrats generally support a $15 per hour federal minimum wage. Some, such as Sen. Bernie Sanders, have proposed pushing it even higher, to $17 per hour.

President-elect Donald Trump said in December that he would "consider" raising the minimum wage, but several Republican lawmakers later told BI that they opposed the idea.

Scott Bessent, Trump's nominee for secretary of the treasury, said at a Senate confirmation hearing on Thursday that he does not believe the current $7.25 per hour federal minimum wage should change.

It's not clear if Democrats will follow Khanna's lead, though he told BI that he would "make the case to the caucus."

Minimum wage increases tend to be popular among both Democratic and Republican voters — in November, several Republican-leaning states passed minimum wage hikes via ballot measures.

Democrats still have to figure out their price for helping Republicans

As of now, Republicans want to avoid handing any leverage to Democrats in the first few months of Trump's presidency. They plan to include a debt ceiling hike in a broader party-line "reconciliation" bill containing a smattering of Trump's priorities on energy, immigration, border security, and taxes.

But there's a good chance that won't work, given some hardline Republicans' deep reservations about raising the debt ceiling without dramatic spending cuts. Some Republicans have never voted to raise the debt ceiling before, and in December, dozens of them openly defied Trump's call to raise the debt ceiling after Elon Musk helped tank a government funding bill.

If Republicans can't do it themselves, Democrats will have the chance to make demands, lest the country breach the debt ceiling and trigger a fiscal crisis.

"I'm not a cheap date," Democratic Rep. Jim McGovern of Massachusetts told BI. "The idea that we're just going to help them out when they can't get their own members to cooperate, those days are gone."

Of the several House Democrats that BI spoke to, only Khanna was willing to name a specific price. Others demurred, saying they were waiting to see what negotiations would look like in the coming months, and underscoring that Democrats would have to decide on their approach collectively.

"The sentiment from our caucus is: If you need our help on anything, you're going to have to help us," Democratic Rep. Alexandria Ocasio-Cortez of New York told BI. "All of this, I think, is subject to many of our internal conversations."

Democrats could also use their leverage to try to halt the deep cuts to federal government spending that Republicans may pursue in the coming months, rather than making an affirmative policy demand.

"There's clearly a whole host of things that I think the caucus would have as priorities," Democratic Rep. Joe Morelle of New York told BI.

• Minimum-wage workers in California, Vermont, and 19 other states will earn more at the start of 2025.
• Missouri voters passed a referendum in the November election raising the state's minimum wage.
• An analysis found over 9 million workers will likely be affected by the coming minimum wage increases.

Workers in 21 states are set to start the new year with a raise.

When the clock strikes midnight on New Year's Eve, minimum wages across the nation are set to be hiked. In a few states, the minimum wage will rise to $15 an hour, a longtime target rate for advocates.

Hover over the states in the map below to see how much minimum wages will change.

Of the 21 states that will see an increase, 14 are subject to inflation-based adjustments as part of existing minimum wage laws, per a report from the left-leaning think tank Economic Policy Institute. The EPI report estimated that full-time impacted workers in those states will see their annual earnings increase by $420 on average.

In the November election, Missouri voters approved a referendum to increase the state's minimum wage to $13.75 on January 1, 2025, and then to $15 in 2026. Some small business owners in the state are reportedly already bracing for higher costs, and business groups there have already filed a legal petition to attempt to overturn the new proposition. Recent research has found that independent businesses are, on average, able to shoulder minimum wage increases — although higher minimum wages can lead to smaller restaurants shuttering.

A 2022 ballot initiative in Nebraska has the state on a similar trajectory, with workers set to get an increase to $13.50 in January 2025 and then a hike to $15 in 2026.

Alaska will increase the state's minimum wage to $11.91 on January 1 because of an inflation adjustment. Minimum wage workers will get another raise on July 1 because of a ballot measure in the recent election. The state minimum wage will rise to $13 in the summer, $14 the following July, and $15 in 2027. Its minimum wage would be adjusted for inflation after that.

Delaware and Virginia are the only states in the South that will see minimum wage increases at the start of the year. Five states in the South don't have minimum wage laws, and Georgia's minimum wage is below the federal minimum wage of $7.25, based on data from the Department of Labor. That means those states default to the federal minimum.

An analysis from the Economic Policy Institute found that over 9 million workers are set to directly and indirectly benefit from increased state minimum wages.

Out of those workers, just over 3 million are directly set to see their pay go up. Even more will be affected indirectly. Over 6 million workers are within 15% of the new minimum wage floor — which, per EPI, means their employers are likely to adjust their wages to compete for talent.

In addition to state minimum wage increases happening in almost two dozen states on January 1, the National Employment Law Project said 48 cities and counties will also have minimum wage increases that day.

Nationally, the federal minimum wage has sat untouched at $7.25 since 2009. President-elect Donald Trump has signaled that he could be open to changing that number, telling "Meet the Press" that he would consider raising the federal rate — although he noted that the cost of living across the country varies, making it difficult to enact one flat rate.

Mike Draper, the owner and founder of screen-printing and retail business RAYGUN, whose 10 stores include a location in Missouri, told Business Insider that minimum wage increases — like the one recently approved by that state's voters — could help bolster workers' spending power. Draper already pays his workers a starting wage of $15.50 an hour.

"This is different from a tax increase, or a rent increase, or a cost of goods increase. None of that money is going to go directly back into your community, for the most part," Draper said, adding: "Increases to worker pay is going to be felt immediately."

Are you set to see your wages go up on January 1? Contact these reporters at [email protected] and [email protected].

• Trump said on Sunday that he'd consider trying to raise the federal minimum wage.
• Some Republicans have come around to the idea, including VP-elect JD Vance.
• It's likely to run into significant opposition in Congress — from members of the GOP.

Over the weekend, President-elect Donald Trump said he'd consider raising the federal minimum wage, saying that the current rate of $7.25 per hour is a "very low number."

"There is a level at which you could do it, absolutely," Trump said in an interview with NBC on Sunday, declining to commit to a particular dollar amount. "I would consider it. I'd want to speak to the governors."

As the GOP has sought to refashion itself as a working-class party, several Republicans have proposed increases to the federal minimum wage. Vice President-elect JD Vance cosponsored a bill in 2023 that would raise it to $11 per hour, while Sen. Josh Hawley of Missouri has proposed mandating a $15 minimum wage at companies that generate more than $1 billion in annual revenue.

While Vance and Hawley have led the charge for a more economically populist GOP agenda, their point of view remains unpopular within a party that's full of free-market enthusiasts and broadly supportive of business interests.

"If we're going to take a look at it, we should repeal it," Rep. Eric Burlison, a Missouri Republican who sits on the House Education and Workforce Committee, told BI of the federal minimum wage. "I don't think it should exist."

Despite Trump's comments, it's not clear that the president-elect views the minimum wage as a priority at all. He did not pursue an increase during his first term, he threatened to veto a 2019 Democratic bill that would raise it to $15, and he dodged a question on the topic during his McDonald's photo-op in October.

He has long struck a more open-minded note on the topic than many Republicans, backing a $10 minimum wage during his 2016 campaign and saying he'd consider a $15 minimum wage during a 2020 presidential debate. That gives more populist-minded Republicans hope that Trump, if he chose to spend political capital on the issue, could push the party to embrace a higher minimum wage.

After all, he's managed to break long-standing GOP orthodoxy on trade and foreign policy.

"These people wouldn't do two-thirds of what we're going to do in the next two years if it were not for Trump," said Hawley. "Let's be honest."

The Trump-Vance transition did not respond to a request for comment.

Not an 'area of emphasis' for the GOP

Any minimum wage increase would require an act of Congress, and Republicans in both the House and Senate told BI on Tuesday that they were against it. They generally echoed long-standing party dogma on the topic, arguing that wages are best determined by market forces and that any increase would simply trigger soaring prices.

"I don't think the federal government should be in that business," said Republican Rep. Chip Roy of Texas. "Let the markets go figure out how we can do this stuff."

Republicans aren't unanimously opposed to a minimum wage increase. The proposal that Vance backed — the "Higher Wages for American Workers Act" — is also supported by Republican senators like Tom Cotton of Arkansas, Susan Collins of Maine, Mitt Romney of Utah, and Bill Cassidy of Lousiana. Aside from increasing the minimum wage to $11 over the course of several years, that bill would also require companies to verify whether their employees are authorized to work in the United States — a priority for many Republicans.

Sen. Shelley Moore Capito of West Virginia — a member of Senate GOP leadership who also supports the bill — told BI on Tuesday that she doesn't expect any movement on that bill in the next Congress, and that she hoped "rising economic growth" triggered by Trump's policies would organically cause wages to rise.

"I just don't see that's going to be an area of emphasis that we're going to go to," said Capito.

A federal minimum wage increase would be popular. Polling has consistently shown a sizable share of Republicans support the idea, and several Republican-leaning states have approved minimum wage increases via ballot measures in recent years.

At the same time, few people still make $7.25 per hour. According to the US Bureau of Labor Statistics, just 1.1% of hourly paid workers were at or below the federal minimum wage in 2023. Most states have enacted higher minimum wages, and some cities have gone even higher.

"The question is, is there a need?" Republican Rep. Glenn Thompson of Pennsylvania said. "Honestly, when you look around the country, positions that used to be minimum wage are now paying $15, $16, $17 an hour."

President Joe Biden supports a $15 federal minimum wage, but was unable to get it enacted due to opposition from several Democratic senators in 2021.

Sen. Bernie Sanders of Vermont, meanwhile, has proposed an increase to $17.

• President-elect Donald Trump said in an interview that he "would consider" raising the federal minimum wage.
• It has been at $7.25 per hour since 2009; however, 30 states and DC have increased their minimum above the federal level.
• Here's where it stands in every state and the raises both parties have proposed.

President-elect Donald Trump said he'd consider raising the federal minimum wage. It's been $7.25 per hour since 2009, though 30 states and a slew of cities have adopted higher rates.

"It's a very low number," Trump said in an interview with "Meet the Press" that aired on December 8. While he didn't commit to a specific level, he said that a federal minimum of $8 or $9 "might have very little effect" because of the low cost of living in some areas.

Any raises to the federal minimum wage would directly affect workers in at least the 20 states where, as of July, the minimum wage was at or below the federal level, per the Department of Labor. Most minimum wage jobs are in the service sector, largely in food preparation and serving-related positions.

Washington, DC, has a higher minimum wage than any state in the country at $17.50, though some US cities have raised it even more. Washington state, with a minimum wage of $16.28, and California, with a minimum wage of $16, came in second and third, respectively.

On January 1, 21 states — and 48 cities and counties — are set to see their minimum wages increase, mostly as a result of existing laws, per the National Employment Law Project. In the most recent election, Missouri voted to raise its minimum wage to $15 an hour by 2026, and Alaska voted to hike its minimum to $15 by mid-2027.

The last federal minimum increase was in July 2009, from $6.55 to $7.25. Since then, overall prices based on the consumer price index have gone up around 47% in the US as of November.

Trump pointed out in his "Meet the Press" interview that the cost of living varies across the country, and a federal wage might not be a one-size-fits-all solution.

"The other thing that is very complicated about minimum wage is places are so different," he said. "Mississippi and Alabama and great places are very different than New York or California in terms of the cost of living and other things."

Indeed, regional price parities data from the Bureau of Economic Analysis show that Mississippi and Alabama had among the lowest costs of living in the country in 2023, while California and New York were more expensive than the national average. Alabama and Mississippi don't have state minimum wage laws. The minimum wage in New York is $16 in New York City, Long Island, and Westchester, and $15 for the rest of the state.

While Trump said wage changes like California's — which hiked it to $20 for fast food workers in April — might go too far, "there is a level at which you could do it, absolutely." He said before making any changes, he'd want to speak to governors.

President Joe Biden backed a $15 wage, which every Republican senator and eight Democrats ultimately voted against. Some lawmakers on the left have gone even further, with Sen. Bernie Sanders pushing to raise the wage to $17 by 2028.

Some Republicans have also proposed raising the federal minimum wage. While he was still in the Senate, Vice President-elect JD Vance cosponsored a bill to gradually increase it to $11, although that bill also includes additional measures like raising penalties on employers that hire workers living in the country illegally.

The Trump-Vance transition team did not immediately respond to a request for comment from Business Insider on Trump's potential plans for the minimum wage.