The Three Unexplained Mysteries of Taxi Tipping Behavior
businessweek.com
businessweek.com
As for the rest, if we're looking at cash fares, doesn't it seem necessary to examine the most common makeups of bills that would get you to that amount? If someone has all 20s, it's easy to tip $10 on a $50 fare. Boom, done. But if it ticks over to $60, perhaps people don't want to break that fourth bill, or maybe they don't carry more than 3 20s, so rather than pull out the card they just leave no tip, like a jerk.
But I don't get why cash versus card was not broken out here. Surely tipping habits differ greatly, or at least significantly, between the two methods. Why a card user doesn't tip at $60 is likely to be different to why a cash user doesn't.
It doesn't hurt that most of the time I'm in NYC, the taxi drivers "have broken credit card machines" or ask me if I can use cash to save them from the processing fees. Usually the currency in play is $20s and it's easier to just round up then calculate and fumble around for change and small bills.
For big fares, credit is just easier to deal with than a wad of money. The cabs all have touch screens for selecting the tip, I suspect there's some kind of psychology on that tip selection screen which explains the ending 5 and 0 fare tip dips.
And as for anything, as the price goes up, the tip goes down. If I go to Olive Garden with my wife and spent $30, I give them a $6 tip, because the waiter was nice, asked me how everything was and my water stayed topped off.
When I go to Per Se's or Le Bernardin's and drop $300 on a prix-fixe dinner, do I really want to tip them $60 because I got near enough the same service (but it involved 4 people) but they kept my wine glass topped off all night? No, but I might give them $50 because that's a nice number, is more than 15% (so I can make sure I can come back).
Most taxi rides, I'm paying cash because I don't want to be bitched out by the taxi driver about using a credit card. With cash, I'm more concerned about minimizing the amount of change so I'll usually do something like hand them a 20 and say "can I get 3/4/5 dollars back".
That could partially explain some of the weird shapes in the data.
Yet another hypothesis for tips going up in the $20 to $30 range is because for fares over $20, riders may switch to credit card payment where the fare has a clear paper-trail, while tips for fares under $20 are underreported because riders want to get rid of their singles.
My conclusion for the results of the study is that rider sympathy for the poor medallion owners of the world varies based on the fare.