How Software in Half of NYC Cabs Generates $5.2M a Year in Extra Tips | Hacker News Reader

How Software in Half of NYC Cabs Generates $5.2M a Year in Extra Tips

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268 pointsiquantny218 comments

I just ran into this last night: I took a cab home from the airport. One: he had no gps and took a wrong freeway change getting home. Two he barely spoke English. Three I basically had to navigate him back on track and painfully turn by turn.

End of the trip I go pay, and he's sad that I want to pay with a credit card. Then the tip meter only has 20% or other. I hit other with a much lower tip. He cancels the transaction from the front, and says that the ride is actually 150 not 100, and that's why I need to tip. So I say fine and end up tipping him the 20% at 100.

But seriously isn't a tip like a bonus!? Why are we all required to give 20% tips even when the service sucks?

Next time I'll just uber.

I've never had an experience this bad, but I've had plenty of bad experiences with sketchy rates in Baltimore cabs that I just take Uber or Lyft.

Baltimore cabs are The Worst. Meters are routinely rigged. When I lived there, I'd usually haggle on a fare before getting in the cab. Sometimes, I didn't feel like it and I'd take my chances. There was wild variance in the rates the meters racked up. Not only that, but cars are frequently in very poor shape and many drivers don't know where they're going in a city that's pretty easy to navigate. On top of that, at the time, credit card machines were unheard of, even after NYC had them in every single cab.

If this ever happens again in the future, take a note of the cab's number and call 311 or go to http://nyc.gov/311/.

They take reports of this kind of activity very seriously and will usually prosecute the driver if you're willing to testify.

>if you're willing to testify

Most people aren't over $20, which is why the system is a complete failure.

I believe you can testify via a phone call and it takes roughly 10 minutes.

And how long does it take you to schedule that phone call and fill out the appropriate paperwork?

Maybe about 10-15 minutes depending on your reading level and ability to fill out a web based form?

> if you're willing to testify

Relevant satire:

https://medium.com/@blakeross/uber-gov-29db5fdff372

Sounds like you got scammed. How could he just change the amount for the ride? Isn't there a meter that's visible to both of you that shows what's due? If he insists that you have to pay more than what the meter says, tell him to get bent.

The meter said 100, but after I tried to manually enter a tip other than 20, is when I found out about it "actually being 150". He claimed that he had turned the meter off at one point and was actually doing me a favor he wouldn't have done if he had known I was going to barely tip him. I would have stood my ground (having to give turn by turn to your cab driver for 20 minutes is hardly tip worthy), but being in front of my house I didn't want to cause a scene and was tired from my flight.

The irony is that I actually was about to take an über x quoted at $70, but I decided on a cab last minute (wish I hadnt).

Sounds like you are a very nice naive person, or/and a total sucker.

You have been scammed, proper course of action would be calling police on the spot (unless you are black).

I feel ya on not keeping it real every single time, but sometimes, you gotta be like, look man, it's what I'm going to pay, or it's nothing, you choose.

This sort of crap is exactly why I use Uber whenever possible.

There's plenty negative to be said of Uber, but at least the drivers aren't attempting to constantly scam me. I'm absolutely done with putting up with taxi bullshit. There's a lot of security in both parties knowing that their identity is known to a mutual third party, and that bad behavior will have consequences.

I can remember back in 2010, in sf, when taxis would haggle you for wanting to use a credit card, even when they all were labeled with visa window stickers and had machines! They would put cardboard signs in the back that said "cash only, I pay 5% to cc company". I felt bad for drivers who 'all of the sudden' found themselves making 5% less because of credit cards, but come on, let's get with the times! don't haggle your customers. hide that from the customers and raise all prices if you have to.

At the minimum, über has forced taxis to get with the program.

Back in 2010? You mean this isn't still the case?

Indeed, the entrance of Uber has made taxi rides a market for lemons. The most pleasant and least avaricious drivers are better off within Uber's higher-accountability system.

This is nothing specific to SF, either. This kind of nonsense is exactly what dysfunctional markets looks like, and it's everywhere, which is why Uber seems such a breath of fresh air to consumers around the globe.

Well, almost everywhere. You know where they don't pull this kind of flimflammery, right? That's right, in Japan, where Uber doesn't even try to replace cab companies, it just provides an easier way to book rides with one:

http://blogs.wsj.com/japanrealtime/2014/08/08/in-japan-uber-...

Japan doesn't bother with tips in the first place.

Japan and the Japanese as a society are very into following the rules and rebellion and standing out is frowned upon so the general MO of Uber wouldn't have worked there.

Given that offering a universal way to book a taxi is the best thing they could have done.

Not to mention by the looks of it taxi cab services there are way ahead of their peers in the US launching their own apps etc.

Rude service in a taxi in Japan would be somewhat shocking, but they're also comparatively more expensive than most other places. One time I couldn't find a hotel in Tokyo, so I took a taxi- it turned out to be just around the block, but it still cost like $6. But hey, the cars are nice and the white glove thing is always an interesting contrast to NYC.

I've had this tried on me before, in Chicago where we're supposed to have super strict taxi laws. The correct response is to dial 911, not 311, and say you've got a taxi attempting to rob you. Notice next time you walk across an intersection at a stop sign, who comes to a complete stop more.. the average driver, or a taxi cab. Taxi's fear police way more than the average driver.

Maybe they stop to run up the meter more

The taxi cabs are nearly as bad as the bikers.

BTW: If it was me I would have walked out, when he attempts to accuse me I'd invite him to call the police. He's trying to change the price after the fact.

>> "The correct response is to dial 911"

Is this not a bit of a waste of police time? Why can't you say "You tried screwing me, this is all I'm giving you. Got a problem? Ok, I'll call the police." Reading some of the comments in this thread it seems like people are seriously scared of taxi drivers. It's like any other business. If a restaurant tries to charge you for something you didn't order you don't pay them for it. You don't immediately call the police.

> He had no gps and took a wrong freeway change getting home.

Yeah that was planned. He's trying to run up the meter. About 30-40% of cabbies will take you on the scenic route if you don't give them specific directions. You don't have to be painfully specific. Just give them a curt overview of the route you wish to take when you get into the cab.

Be ready to pay with cash. I'm ready to tip 25% for a no bullshit drive. If they want to put the tip in the meter instead of their pocket that's their call.

Leave if there is any bullshit with insisting on tips or cancelling payments. If he threatens you with police, call his bluff. 'Please call the police, we can both explain the route you took.'

And people wonder why Uber is so popular...

and why the incumbent is lobbying so hard to stay relevant.

Uber will take a scenic route because they don't know what the area and/or their GPS gives them a shitty route.

But at least they take credit without an epic battle.

There is also a scam going in Las Vegas where it's a $3.00 or $3.50 fee to use a credit card versus cash. Fee + tip doubles the cost of some rides. Vegas has also banned Uber.

Why did you even pay at all? He just completely raised the price during the transaction. On top of that, why on earth did you give 20%?

Because you may get murdered if you don't. Better get out of the situation alive

Not really useful answer. I rarely give tips because I don't care about social pressure and most of the time the service is not special anyway.

You're not going to find a lot of "gangsta" taxi drivers or taxis in Englewood, so I think you're fine.

and if Uber does something bad, you'd complain.

You should also complain now.

Forget the tip, why did you pay? I would have taken the price he originally wanted, cut it in half because of the screw up and gave him a choice of that or nothing.

>> "Why are we all required to give 20% tips even when the service sucks?"

You're not, you should have said no.

There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less.

The federal minimum wage is $7.25 per hour (effective July 24, 2009).[1] Furthermore, the federal government requires a wage of at least $2.13 per hour be paid to employees that receive at least $30 per month in tips. If wages and tips do not equal the federal minimum wage of $7.25 per hour during any pay period, the employer is required to increase cash wages to compensate.[2]

So while it may be true that servers might get a base pay of something stupid like $2.13, they are guaranteed that they will make at least the federal minimum wage (which still sucks but that is a different topic). And... many states go above and beyond what the federal government requires[3]. I'm getting a little tired of the whole "but they live off tips" rhetoric. Tip what you want and don't let society pressure you into tipping more than you desire. For me, since sales tax is hovering in the 9% level where I am, I usually just double that and adjust accordingly (based on service quality, etc). That also makes it easy to not tip based on the bill+tax amount that they give you on the "sub total" line.

[1] http://www.dol.gov/whd/minimumwage.htm [2] http://www.dol.gov/elaws/faq/esa/flsa/002.htm [3] http://www.dol.gov/whd/state/tipped.htm

> guaranteed that they will make at least the federal minimum wage

Guaranteed legally, and guaranteed in reality are two different things. If I pay someone to drive me somewhere, it's legally guaranteed that they're licensed driver by the government by the appropriate regulator. But in reality, UberX.

I would like to know how often employee's end up following this up with their employer, and how often the employer makes up their wage.

This. I come from a culture where tipping implies "reward for good service". But in the US, I always feel that if I tip less than the expected 20%, practically I may be cutting into someone's wages. If they demand the difference, they may end up getting fired by their boss.

Does anyone know if these workers are that helpless in practice? Or can they make a single call and get the restaurant owner in trouble if he/she doesn't make up their wages to the minimum? (As an H1B employee, I know well that the theoretical extent of what you can do and the practical extent are sometimes far apart.)

Interestingly, I've seen that this perceived "power/responsibility to ruin someone's job" makes it so that as an outsider, I tip more than the average. I've seen American friends tip 10% when I was tipping 20% for 'average, not great' service.

They have to report their tips for tax purposes. If the reported wages don't add up to minimum, then the restaurant can get in trouble from a whole host of government agencies. Even if the employee does nothing, the IRS will come calling assuming that tips are being under-reported.

It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it. The service in Europe tends to be of a much lower quality than in the US as well.

In general, the US is a consumer paradise compared to Europe. In the US, it's better to be a consumer than an employee. In Europe it's the opposite.

It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it.

There is no "mandatory tip" in Europe. It's actually very simple: you pay for a service, the business pays it's employees. How much the employees get payed is not your concern as a customer. You can tip if you received excellent service, but that is totally optional as it should be.

In general, the US is a consumer paradise compared to Europe.

That is not true. US is business friendly. Europe is consumer and employee friendly. Just some examples: VAT is included in the price, all electronics include 2 year warranty, if you pay CRV you can return the bottle at the shop, shops must except returns, ...

Europe is not consumer friendly at all.

Service is terrible, many places only accept cash, more accept debit cards, most don't accept credit cards.

Store hours are terrible.

Where in Europe have you been? The diversity between countries is big and even in the same country you encounter differences.

Perhaps in the country. Europe is a big place. Places I go in Paris, Stockholm, London, Amsterdam usually accept cards.

Sweden runs almost exclusively on plastic and technology, so much so that even a lot of older people don't even get physical bills anymore.

To say "Europe is..." about anything is a pretty broad statement. Your one or two trips to a couple of european countries probably doesn't qualify you to make this statement.

It's true about some countries in Europe. Bulgaria, for example, generally has bad service and you're lucky if you can use card to pay for everything you buy during a day. This is not representative of even a majority of Europe, though.

> It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it.

Recently a lot of restaurants in London have started adding this, however the "service charge" is completely optional (UK advertising laws state that the advertised price, in the menu, should include all fees and taxes). I think they've only done this as European tourists are used to it, so they can get more £££.

This has been standard practice in the UK for a while now, but it's completely legal to cross through the service charge and tip cash (or not at all).

Service charge included in the bill, often 10-15%, has been standard for decades, though some restaurants decline to add it, as it is optional. You can refuse to pay it when included in the bill.

Tipping in the UK is not expected, nor is it expected that visitors from Europe will tip, unless they're tricked into expecting tipping is expected. It is appreciated, but not expected.

This is London, other parts of the UK may vary.

That's why it's all gone to pot. You don't realise that employees are consumers. You give them more money they spend more.

> In general, the US is a consumer paradise compared to Europe. In the US, it's better to be a consumer than an employee. In Europe it's the opposite.

Yeah, that's why every time there is a TnC/EULA dispute european courts are the ones to throw out garbage conditions stated in EULAs and US courts are the ones who uphold them.

Sweden has a very consumer-centric mindset, to the point where I haven't in 26 years of living there ever felt like I was 'being fucked'. Even in this thread I see stuff in the US about being charged for using a card to pay. That's illegal in Sweden.

As an even better example, you have a 3 year right to return a product if it breaks, which overrides any signed contract or anything you might agree with in terms of guarantee with a store. It makes things like Applecare (that you apparently badly need in the US) useless, because everyone already has "Applecare for everything" as a consumer right.

It's really not that most restaurants wouldn't make up the wages to the minimum. The minimum wage in most US states is not for most people would call a "living wage, it's around $15k/yr. It's not uncommon in a major city for waiters to be able to pull in $30-60k/year. The thing is that in many place tips are paid out in cash at the end of their shift, so if you don't tip you're literally taking money out of their pocket for that day.

Many paycheck I've seen from most wait staff is less than $20 for two weeks. The employer is required to withhold taxes based on the hours worked and tips reported, so the whole paycheck basically goes to taxes.

As for cases where someone doesn't make enough tips to hit minimum wage, in many places not making enough tips is a sign that the person isn't doing a good enough job. So they won't be fired for "asking for minimum wage", but because "their performance was unsatisfactory".

So yes, in practice most wait staff do live off their tips. Depending on the locale an extra $10 or $100 in tips could be the difference in what their kid eats that night or whether they can make their car payment tomorrow.

(Personal story time: I will always remember helping my mom wait tables at a local diner when I was young and someone tipped $10 on a ~$10 meal and instead of eating hamburger helper that night we got to go out an eat at Long John Silver's.)

Except that you're not "literally taking money out of their pocket for that day" - that would imply that the money was rightfully theirs, and that you've essentially stolen it from them by not tipping. That's not how tipping works - it's the customers money, given at their discretion. There's a strong sense of obligation felt by most people, but it is ultimately optional.

Most places require the wait staff to tip out the kitchen a percent of their sales at the end of the shift to the tune of 2-5%.

If you don't tip then you are actually actually taking money out of their pocket since they're now going to have to cover your 2-5% tip to the kitchen out of their own, rightfully earned, money.

That is illegal. Google it. A group of tipped employees (ie. servers and bartenders) may pool tips. But it is illegal to force them to include non-tipped employees (ie cooks, dishwashers, etc) in the pool. Servers may tip the cooks, etc themselves if they want. But they can't be required to.

Err, not in my province. Not only is it entirely legal, it's common and generally accepted practice.

Is minimum wage a living wage?

$7.25 * 44 hours per week * 51 weeks per year is still only 15,950 US$

That's gross, not net.

I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more.

> I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more.

Probably could be a really interesting research topic but Uber comes to mind as part of the reason I loved it at the beginning was the lack of tipping.

It's not about the living wage, it's about the audacity of paying a bit too much to be chauffeured around the city.

The problem is that it creates a system that is easy to abuse, by the employer.

And in a small business (restaurants and other service providers), that will happen either intentionally or through time pressure, inexperience, etc. I tend not to like systems that rely on something like this in theory rather than operate from a stronger structure.

They do "live off tips" though. They take the job with the expectation of making more than minimum wage.

I'm all for changing the absurd system where tipping is practically required for one where a reasonable wage is paid and pre-factored into the cost of the service. But if we all just stopped tipping suddenly, it's the most vulnerable people who bear the brunt until the system adjusts. I think that's pretty morally suspect.

Many changes that end up being pretty good hurt the most vulnerable in the short term. The biggest example of this is the Industrial Revolution.

It's tough to say whether you apply moral leanings towards no disruption at all vs. "in the long term" benefits to everyone, including the most vulnerable among us.

I'm not going to offer an answer, because I'm not sure I have one. I don't want anyone to suffer, but I want everyone to be better off in the end.

Cabbies seem like they're in the heart of every controversy these days - from medallions losing huge amounts of value to wage/tip adjustments.

In the end, do we all benefit?

A small sprinkle of restaurants[1] have begun trying an alternative where tips are disallowed but include some type of additional charge on your bill and in return the staff get paid a higher wage. According to another article this has resulted in better service from the staff --and that would seem to be opposite of what you might get from continental servers (who customarily don't get tips), so it bears watching.

[1]http://www.cbsnews.com/news/more-restaurants-adopting-no-tip...

PS. The strata of restaurant trying this approach might skew results, so, not sure what results one might get in a broad spectrum of restaurants.

You don't have to wait for the results to come in. Just go to Europe, where this has been standard practice for decades if not longer.

For what it's worth, in my own personal experience and that of others I've talked with, the service in Europe is markedly worse than what you usually get in the US. But anecdotes like mine are too little to go on. I'd be interested to hear if there's been any cross-cultural research on the subject.

I thought that too, buut then I thought about Japan --and there they get paid near minimum wage (comparable to US minimum wage) but also have no tipping policy (or rather culture) and yet service tends to be great. So I think culture has a significant impact --and I wonder where US staff might fall; towards European apathy or Japanese pride in vocation.

If they take pride in their work that might make me feel better, or it might make them feel better. But that alone is not going to put bread on their table.

Are you kidding me? I've had only a handful of bad service experiences in Europe compared to the numerous great ones.

The Europeans tend not to keep coming back to your table to ask how you're doing, or if something is wrong. If there is something wrong with the meal they'll come because they're watching/paying attention.

Most people want a waiter to come by because its rude to wave a waiter over.

European service sucks.

It's not rude at all to catch their eye, or are you using the finger clicking method?

Personally I loathe the intrusive cloying fake-friendliness of US waiters. I've had a few pretty poor[1] experiences despite not eating out that often in the US.

I have eaten out in the UK considerably more often and had fewer poor experiences.

maybe it's just a cultural thing?

How in the world do you know that the friendliness is fake?

Because the alternative - that people actually behave like that in their real life outside work - is not supported by my interactions with people outside the work environment.

Everyone has a level of friendliness. You step inside a restaurant and it gets ramped up dramatically. Some US places feel like the Disney store which has almost oppressive levels of forced-friendliness. (Where -employees- "cast members" are instructed to "spread the magic".)

I think it depends on how you see and interpret the friendliness. In some cultures it's not so much faking it as it is fulfilling a (n expected) role. So it is actually a sincere execution of a role and not fake --on the other hand outside this role their personality can be quite different.

Absolutely. I have a certain level of friendliness to random strangers. But customers of any kind? I sincerely care about their experience of dealing with me and my company. So if I come off as more friendly when dealing with them, I'd say that's genuine.

Because it usually runs out pretty quick and they're a little too friendly too quickly. I.e. Tries to sit down with you and make small talk.

No, most people probably want to eat their meal in peace and quiet.

They don't need a waiter coming over every five minutes - specifically so that you'll remember that and equate it with "attentiveness" and "great service" when it comes to time to tip.

Next time you are out at a fine dining place, which tend to be very selective about hiring wait staff, see how they do it. That's really what people want.

I'm sure there is a large minority who just want to be left in peace and quiet, but you aren't the average customer.

A good waitress will know when to time her visits so she isn't always there but you don't notice her absence.

For that type of waitress I will not hesitate to tip 22% or higher.

So it is okay to deprive generations of future servers of a guaranteed livable wage, just because the current one will be affected temporarily?

That's not the only alternative. And if your answer personally is not to tip, I think you have to ask yourself whether you're not tipping has made an impact on the policy, is is your action just hurting the poor sap who happened to serve you with no connection to a broader movement to spark change?

There's a cafe here in Toronto that adjoins a community centre that runs social programs, etc., and they have a tip jar next to the register. There's a sign that says something like "Our staff a paid a fair living wage. Any donations for the community centre are welcomed." or something.

The fact that servers are guaranteed minimum wage does not change "they live off tips" one bit. $7.25 isn't enough to reasonably live on. Like it or not, you're paying their rent with your tips. That doesn't mean you're obligated, but it does mean you have a strong influence over their financial well-being, even with minimum wage guarantees.

I did acknowledge that the minimum wage sucks. But it sucks the same for all minimum wage jobs... the ones that don't even have the chance at getting tips. How much it costs to live is a much broader topic than this and should include all jobs that get low wages. I think tips fall into the same rough category as bonuses and commissions. People who get bonuses have to accept that they are not guaranteed. If you take a job expecting a bonus and you don't get it then you expected too much. You still get your guaranteed salary. Same with commission jobs. They usually have a base salary and then commissions are paid on top of that based on sales or what ever the metric is for that job. But if you don't perform very well one month and commissions are down... well... better luck next month. Bottom line, don't go in expecting the highest possible outcome. Expect the lowest. If you can't live off that then you take a risk taking the job. If you do end up higher than lowest possible outcome then your risk paid off.

Bonuses and commissions can be really different. Sometimes they're just supplemental. Sometimes they're the real pay, and the salary is just a nominal token effort. For many jobs, expecting the lowest isn't realistic. You wouldn't take that job if you expected the lowest, because the lowest is unacceptably low and almost never actually happens.

Waiters get tipped. That's the expectation and the reality. Anyone who takes a waiter job not expecting to be tipped is deluded (assuming they don't work for one of the few places that ban it).

> There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less.

Minimum wage is a very low wage to start. I don't know any taxi drivers, but most waiters I know expect significantly more than minimum wage.

The problem is that taxi drivers don't really get paid wages at all. Most of them are "independent contractors" that rent the taxi/medallion from someone for the duration of their shift. If they don't make enough to cover that cost, they lose money. To me that is the most messed up part of this entire system -- that the wealth created by the enforced scarcity of taxi medallions accrues to a small owning class that shoulders none of the risk.

I thought this was a pretty blatant cheap trick the first time I saw it (similar to restaurants putting tip calculations on bills from 18-25% (which are usually post-tax no less!!)) and on the occasion I am in a cab always punch in "Other," or best option pay cash. Automatic deduction for cabbies who often tip themselves and hand you less change without asking - give me my change in full and I'll tip you, thanks.

To add a data point on tipping amounts I would say I usually tip 10-15% for a good cab ride or less for a bad one, or even zero if the driver "screened" my fare (common from yellow cabs in Queens - keeping the doors locked and asking where you are going before letting you in, which is illegal) or takes unnecessary routes, blatantly excessive slowing to hit red lights, etc. I might venture into 20%+ for a good service ride to/from an airport.

Restaurants I stay around 15% for fair or better service, 20% for good, much less than 15% requires the server to be noticably rude or inattentive. Sometimes I do feel like an outlier or cheapskate as the "norm" service for anything feels like it has become 20%, which I find a little ridiculous. I won't not tip because I don't "believe" in the culture of tipping, because all I would be doing is hurt mostly decent workers; at the same time I won't default to a high tip for average service just because other people are doing it. I try to find a middle ground.

>I won't default to a high tip for average service just because other people are doing it.

30% and up is a high tip. 20% is not. Life is short. Be the guy/gal who puts smiles on strangers faces. You can do this by taking care of service staff.

I can't wrap my head around tipping. Why do I have to pay extra? Why doesn't their employer pay them. Can someone explain tipping to me? Because apparently I'm the worst person on the planet for not tipping.

The theory is to incentivize awesome service by having each customer decide how much compensation to give based on the server's performance. Those who delight customers make more money, while whose who are bad at customer service make little money and are incentivized to leave the industry and do something not customer-facing.

How hard is it to bring someone a menu and then bring them the food they ask for?

I don't want to be delighted by the service, I'm there for the food and people I'm there with.

Have you ever worked at popular sit down restaurant during a dinner rush? It's a mad house... Not easy at all.

Good service is knowing the menu and wine/drink list. Being able to provide recommendations and advice on what to order. Trying to write down all the orders at this table while you see an empty water glass and someone is taking 5 minutes to decide which salad to order and you know there's food for another table getting cold in the window.

If you just want food and a place to sit, there's plenty of fast food/fast casual restaurants. If you go to a place with wait staff, it's because you are going to get waited on. A good wait person can be the difference in having a wonderful night or a horrible one.

Waitstaff are critical, and should be trained. Good waitstaff are a joy (prompt, pleasant, know the menu and can make suggestions, preemptively help avoid problems, revisit but don't keep badgering you).

However there's no night I don't cook that is 'horrible'. Its can be frustrating or amusing depending on my attitude. But if I'm sitting down and getting fed, then the rest is gravy.

I tip folks in the service industry whenever I have a chance, not just wait staff. I'll tip mechanics, my postal delivery person, the guy who delivers firewood, the hotel maid, etc. The way I see it, it's a very small percentage of my income to someone doing a job I'm glad I don't have to do. I worked retail growing up and dealing with people down right sucks. I'm glad I can ao easily bring a smile to someone's face.

When I get rude or incompetent service relative to the price point, I ask to speak to the manager, which I think is a better way to handle things.

I guess my struggle is internal then. I feel crappy about myself for being weak for tipping because I feel like I'm being scammed out of my own money via guilt given to me by their employer. And then I feel crappy if I don't tip.

You should feel crappy if you don't tip. It's an "honor system" but the wages assume that people tip servers. I know, it's absurd, but that's the system. If you don't want to tip, please don't eat at places where waitstaff are paid a wage that presumes tips.

And what places are those? And how much?

I honestly don't know, and so I tip 18-20% everywhere, if I order a sit down meal. I order for pickup if I'm trying to eat out and save money.

> And what places are those?

What places don't assume that waitstaff are tipped? Fast food restaurants and in-grocery-store ready-to-eat food-service areas. And places that explicitly advertise prices with "service included" (though these are rare.)

That's not true everywhere. In Washington State (and some other places around US) minimum wage is the same for everyone including tipped employees. So please stop spreading this flawed logic and accept that it's just another way for restaurant owners screw you over with your own full consent

You're not being scammed in the US. You're given the ability to give immediate feedback on the service you received by adjusting your tip amount.

What I don't understand is people saying they are "forced" to pay extra... Why would raising all the prices of the food 15-20% to make up for lost tips and actually forcing you pay that be better? Then you don't have the option to pay less if the service was bad.

Do you tip when picking up takeaway, or buying fast food? Or when checking in at the airport? Do you tip a web designer, or when buying a car?

Elsewhere in the discussion, someone notes that the vast majority would tip when buying Coke at the pub, but not at a fast food place. At either place, the process seems pretty similar to me.

If you walk into a sit down restaurant in the US with a plan not to tip, you are being pretty obnoxious.

It's not complicated, tips in that situation aren't extra, they are part of the compensation of the entire staff of the restaurant (the waiters usually tip the bussers and the kitchen...).

If you don't like the arrangement, you should refrain from eating in such places.

> It's not complicated

It _is_ complicated. It's so complicated that (i) there are discussions on the internet about whether 15% or 20% or 25% is fair, and (ii) there are many specialised 'tip calculator' apps.

When I walk into a restaurant, how much should I be expecting to pay for 'meets expectation' service? Is this a % of the bill, or a $ amount related to the amount of time I'm being served (a proxy for the amount of service I get)? Whatever your answer, are you confident that most other patrons of said restaurant would agree with your recommendation?

I didn't say tipping was a great system, I said that you shouldn't eat at sit down restaurants in the US if you have a problem with it.

I guess if you want external validation of what is fair you can make it complicated, but I was trying to focus on tips not being extra compensation in that specific situation.

> I said that you shouldn't eat at sit down restaurants in the US if you have a problem with it.

I expressed no opinion on this point.

> I guess if you want external validation of what is fair you can make it complicated

Even if I don't want external validation of what is fair, it is still complicated enough that I need to pull out a calculator after a date with my wife.

> I was trying to focus on tips not being extra compensation in that specific situation.

Agreed, and this is the reason I tip according to local norms when I'm in the US.

One thing that is true that makes no sense is that tips are designed to be based on the dollar amount of the bill. Why should a 45 minute service of a $100 meal mandate a larger tip than the same 45 minute service of a $50 meal? The staff has put in the same amount of time and effort to serve both meals... yet the more expensive meal expects a larger tip. This aspect makes no sense whatsoever. A tip should be based on the number of clients served at a table + the time spent in the restaurant + perhaps additional money for special requests or complex meals.

If anything, you'd think the cheaper meal should have a larger tip since you're occupying a spot for a cheap meal when they could have had a client sit down and spend 3x as much as you. It's all backwards, the fact that the tip is based on the dollar amount of the meal...

It's complicated because its so ingrained in our society yet its completely unenforced except only by at most intense personal judgement.

Do we tip because the food service industry cannot meet demands to pay all staff at least minimum wage?

Is it because minimum wage nationally is too low and people feel the need to fill in that missing %?

Why would I tip a waiter and not a customer service representative?

What about a cashier?

What criteria do you use to determine who you tip?

One guy above mentioned he tips all sorts of people and it seems like the underlying reason is because they provide a service. Everybody provides a service, do you tip everybody?

If the bottom line for tipping is that you provide a service, it seems to be a binary situation doesn't it? You either tip everybody or you tip nobody.

It's such a completely arbitrary social contract. Maybe I'm reaching too much into this. Maybe I'm just autistic, who knows.

In the specific instance of sit down restaurants, we tip because that is how the transaction is structured.

Do you think if restaurants had to pay their staff 4 times as much (minimum wage for servers is often ~$3 per hour but they probably take home closer to $10 or more) that the prices on the menu would stay the same? Do you see how that makes Do we tip because the food service industry cannot meet demands to pay all staff at least minimum wage? the wrong question to be asking?

I'd rather the burden of staff being paid be shifted to the employer and made up in the difference in cost of food. I'm from Canada where our minimum wage is quite decent, $10.50.

Yes, that's fine. My argument was quite clear, that you should not abuse the existing situation. I was even geographically specific.

I don't have to guess, I know the prices won't be that different. Not everyone knows it, but in WA state everyone including tipped employees must get the same minimum wage of over $9 an hour (to be increased to $15 in Seattle over the next several years). So the argument about underpayed workers doesn't hold any ground here, but people are still expected to tip.

> You either tip everybody or you tip nobody.

If i go to McDonalds and order a coke I don't tip. If i go to a pub and order a coke I do. Explain that one to me.

If it is so necessary and expected just include it in the price of the food. Why leave it to my whims at all? In what other situations(excluding restaurants/cabs) do you routinely part with more money than is legally owed?

>> "If you walk into a sit down restaurant in the US with a plan not to tip, you are being pretty obnoxious."

The owner is being obnoxious. It's not up to me to pay his/her staff. I've worked and know people who've worked in restaurants in the UK. They get paid above minimum wage and still get tips (which aren't required, but people usually round up the bill). It's not hard.

Like several other replies, you are talking about something different than I am talking about. You're expressing an opinion about including tips as an expected component of the transaction. I'm talking about flaunting this widely known expectation.

Your opinion that the structure is obnoxious does not make it any less obnoxious to fail to tip (especially when, as I said, someone walks in planning not to tip).

The obnoxious part imo is more that people feel obligated to tip even when the service is bad. There are several comments in this thread about tipping 10-20% for BAD service. Putting that decision on that customer is unfair.

Because you would not eat there if the employer paid decent wages and passed it on to you by charging 30% more than the "tipping" restaurant next door.

The only way to get around this is to mandate higher minimum wages for hospitality workers, putting every restaurant on a level playing field. This is what they do in Australia and many European countries.

Why must their new mandated wages be higher than the minimum wage? We already have the minimum wage, and I assume that's what it's for? Are hospitality workers better than other minimum wage workers?

Every tipping thread on HN becomes an example of why the rest of the world hates the SV/startup community. You have people who likely make more in one day than the wait person will make all week arguing over whether 15% or 20% to tip. An extra $5-10 is likely pocket change for someone on HN, but could make someone in the service industry's day.

20% is the default tip for good service. 30% and above is a high tip. If you have bad service, ask to speak to a manager. I'm embarrassed by the lack of empathy shown in this thread.

> keeping the doors locked and asking where you are going before letting you in, which is illegal)

Just out of interest: do you ever report those cabs?

Different country, I'm in Australia, but I've reported many cabs for breaking various rules (and laws) as well as being outright hostile. I have an intense dislike of our cab duopoly in Brisbane, but to both of the companies' credit, they appreciated the heads-up when it came to dangerous, rude or illegal drivers. I highly recommend others report cabbies who break the rules, as if we don't they will never improve.

This is a big reason that Uber and Lyft are a big deal - feedback systems are so ingrained that a bad driver won't last long.

I never have in maybe half a dozen times, but if I and more people did it would happen less. I believe the consequences to the driver are quite steep. Usually if you are refused and not in the cab yet the driver won't stick around for you to get a good look at the plate/medallion/driver info. Another anecdote: I had a cab passenger open their door into my car once and while chatting with said passenger the driver (who saw what had happened) sped off as soon as the door was shut.

> less than 15% requires the server to be noticably rude or inattentive.

As an Australian, in a country that doesn't have a culture of tipping, I find it very amusing that you would tip a server who was noticably rude.

Edit: For context as well, tipping is on the rise up in Australia, but only at classier/fancier/modern/hipster places, and the extent of a tip would be to round up to nearest $10 (or note, if paying cash)

See also above poster who feels 20% is not a high tip! To be fair most tipped workers do not make enough without tips and are allowed to be paid well under the minimum wage if they work in a tipping industry, so by not tipping at all you are really screwing them over.

Waiters in the US make an average of $4.63 and median of $4.00 per hour [1] from their employer in wages. They make the rest of their income in tips. If you don't tip, you're potentially taking a not insignificant chunk out of their pay for the day.

In the US, it takes fairly extreme circumstances to not tip (by most people's standards at least; some people just never tip, but they're a tiny group), like if the service was extremely bad or the waiter was insulting or hostile.

Employers are legally required to chip in if the employee doesn't make minimum wage for a pay period, so it's not completely insane, but it's still a rather weird system.

[1] http://www.payscale.com/research/US/Job=Waiter%2FWaitress/Ho...

At first I thought your comment may have been flawed but you clearly recognized that the restaurant owner must cover the pay difference.

How is the average/median less than the federally mandated minimum wage law? Could the waiters themselves be under reporting tips?

The average isn't counting tips. Sorry if my post was misleading in that regard.

It's very possible a waiter could be making $4.00 in wage per hour but average out to something like $18/hour when you account for tips, and I think this is pretty common in mid-tier restaurants and up. (My numbers may be way off for that; I've never worked in a service industry.)

Waiters serving establishments in wealthier areas can potentially make a lot of money from tips.

Yeah I mean I understand all of that, I just think it's crazy. As a consumer. Vox said it well with "consumers should not be responsible for paying the incomes of a restaurant owner's employees".

I find it hilarious how much intelligent and smart people rationalise the US tipping culture. It's always justified as you need to tip because the staff are paid low because they make it up in tips. It's circular reasoning.

Consumers pay 100% of the incomes of a restaurant's employees.

Well not directly.

Why, as a consumer, am I making a decision on how much the staff will earn that day. That's the employer's responsibility. Why doesn't the restaurant owner set the price of what they sell accordingly to cover all costs (incl. wages)?

In Australia, the price I see on the menu is the price I'm charged and the price I pay. That includes wages!

Why do you go to a restaurant rather than buying food from a grocery store and eating at home? The service aspect is what you pay for when going out to eat vs just buying food.

Tipping is about connecting the buyers and sellers of services directly. How does sending the money through a manager/owner result in better or more cost effective services?

What I said elsewhere in the thread:

IMHO, one of the employers responsibility is to pay their staff. I don't think that's really arbitrary, it's commonly accepted across the world.

If you're in the service industry, it's your job to be nice. That's what their employer (hopefully) pays them for.

If I have a good or bad experience, I exercise my discretion by choosing whether to go there again. If the employer notices a trend downwards in customers, it's their responsibility to assess what that is - hopefully their in touch enough with their business to identify if it's because of their employees service and 'apply pressure' if need be.

I guess ultimately it comes down to culture. I (and the large majority of the non-US world) isn't accustom to paying 10%+ extra for bad or rude service and it would be very hard for us to understand why that happens.

Honestly, I go to a restaurant so I don't have to cook. If I could get top steakhouse quality (or indian, or italian, etc.) food from a counter where there's no one between me and the cook, I would, but I can't, so I don't, and I'm forced to tip someone I don't even want involved with my food in the first place.

There are places where you order from a counter and tipping is not expected. You aren't going to find 'steakhouse quality' because people who want $50 steak from a counter is small.

>> "The service aspect is what you pay for"

Nope. I pay so someone else cooks my food and I have a nice selection. In fact anytime I've eaten at a restaurant in the US I hated the service. They just won't leave you alone because they want to be your friend so you will tip them. I don't need you to check how I'm doing every 10 minutes.

Tipping is the original crowd funding.

> Employers are legally required to chip in if the employee doesn't make minimum wage for a pay period,

My own (very uninformed) assumption is that employers would be reluctant to make up the difference and employees would hesitate following this up in fear of getting in their employers 'bad books'

>> some people just never tip, but they're a tiny group

In my experience, they're not tiny. I'm a young male who owned and worked in my own bar in a poor area of the bible belt, so there's those caveats--but I averaged about 8% in tips over 2.5 years.

My niece, on the other hand, averages over 20%.

My service was in all likelihood better than hers--at the time, we had fewer customers and therefore I was literally able to do more. Further, I'm well-liked by my customer base, and by my own measure I was an excellent bartender.

Anyway, I had a very large amount of customers who did not tip. I'd say > 30%.

>>My niece, on the other hand, averages over 20%.

Were you able to figure out why?

I just posted more about it here: https://news.ycombinator.com/item?id=8844833

But no, just speculation.

I speculate that people are less likely to tip barstaff than waitstaff, but I don't have any sources to back that up.

In the anecdata of my family & friends who have done both, they have come to expect a higher percentage on bar tabs (~20%) than on restaurant tabs (~15%).

There's a ton of factors to consider, of course. Some people get angry when drunk, some get loose with their money, some try to impress. Some people are surprised by large bar tabs and feel cheated. And all the normal factors, like that certain groups are notoriously tight with their money.

> "I averaged about 8% in tips over 2.5 years. My niece, on the other hand, averages over 20%."

Can you clarify the circumstances here, namely:

- does she work in your bar? If not, how similar is the place she works (same city? Same type of neighborhood? Same type of services?)

- did you work the same hours / days / crowd demographic? (There may be a difference in tipping expectations on Wednesday mid-afternoon when people are getting a single drink after work, vs Friday night when they're getting multiple drinks and food and trying to impress their date.)

- were there significant changes in the surrounding area, such as a factory opening or closing, that changed customer demographics?

- are there other wait staff you can compare to that would show a pattern? For example, are women in your establishment generally better tipped than men?

Sorry it was unclear.

Yes, same bar.

Over time our clientele has changed (we intentionally changed it, mostly via pricing and what we carried, like nixxing 'Best Ice'), however that has just led to increased sales, rather than an increased percentage for her.

My nephew also works in the bar now, and he is tipped well, though not as well as my niece. I would venture a guess that the old crowd tipped women better than men, and the new crowd tips based mostly on service.

Either way, I got the short end of that stick.

Yeah and a cabbie not giving full change is seen as 'tipping himself' rather than.. you know.. stealing?

It is stealing but it gets lumped into the "things that happen in NYC that screw you over" category where you lose patience over in taking more seriously past getting your own money back.

I've never experience that, but then if I'm paying cash, I ask for the specific amount of change I want back.

Tipping in the USA goes something beyond just being culture. We've even got it ingrained into our laws. Minimum wage for servers is barely nominal, and much less than what anyone else in the restaurant is making. It's expected that customer tips will form the bulk of their earnings. So if you believe that people deserve to be paid a living wage for their time even when they're not at their best, the status quo places the onus to make sure that happens on you.

The circular reasoning is what gets me - they get less than minimal wage because they earn tips because they get a poor wage because they earn tips because...

It's a ratchet.

Tipping predates minimum wage law in America. When they were written the laws just took into account the fact that some people get paid in tips.

Americans got the tipping culture from Europe before it faded away in Europe.

> the status quo places the onus to make sure that happens on you.

The onus is on the employer, not on the employer's customer. Implementation varies by state: http://www.dol.gov/whd/state/tipped.htm

Some states have a higher minimum cash wage (before tips) than the $2.13 mandated by federal law. e.g. in California this is $9 per hour.

In many places, the employer (restaurant) is responsible for topping up the employees' wages if wage+tip doesn't reach the state's normal minimum wage.

Do you work for minimum wage? But you expect waiters to smile for it.

Of course, there's no real protection against being fired for failing to make enough tips... and for those who make over minimum wage on tips right now, not tipping them amounts to them making less money.

Anyone remember this?

https://www.youtube.com/watch?v=0fJCjet2e3U

> We've even got it ingrained into our laws. Minimum wage for servers is barely nominal, and much less than what anyone else in the restaurant is making.

That's only if the tips don't make up the difference to get to minimum wage.

That's the "ingrained in law" he was talking about. The law assumes tipping, else it wouldn't make sense to have that exception at all.

Ok, i agree and don't agree at the same time. The law does make accordance for tipping, but it doesn't assume tipping or it wouldn't require at least the "real" minimum wage.

Think about it: if we weren't tipping our wait staff, service would be awful, yet, if we paid our wait staff a livable wage, the prices at restaurants would increase ten-fold.

Restaurant meals aren't 10x more in no-tip countries.

I might have been exaggerating, but my point is that labor is the most costly thing to restaurants.

I've worked in restaurants and I've waited tables at a very high-level. There are your entry-level Applebee's servers who have no experience, are in the "survival career" category, or have no aspiration to do anything but work at Applebee's. They should earn 3-4x minimum wage, or about $24k a year.

Then you have your more respectable chain: Ruby Tuesday's. 4-6x or about $40k a year.

Something in the middle: Longhorn Steakhouse, 5-7x.

Above that you start talking about restaurant professionals, where they expect to see at least $80k a year. Prices are now 14x, but your server? They're damn good at their job. Never seen a professional in action before? Go to your city's equivalent to Manny's Steakhouse[0].

[0] http://www.mannyssteakhouse.com/

Making up a stream of arbitary numbers doesn't explain anything to anyone.

Less middlemen between farm and plate?

This line of reasoning needs to come up a lot more, across a wide range of topics from universal health care to cab service and everything in between.

The US is unique in a few ways because it has oceans on either side of it, and is otherwise isolated. In most other respects, what works anywhere else should be expected to work there. If other nations can make restaurants work without forcing employees to take less than a pauper's wage from the owners, and thus depend on cultural norms and customer's generosity to live, then so can America. If other nations can get all their citizens health care, then so can America. If other nations can have elections without spending many billions of dollars, then so can America. And so on.

And if Americans for some reason can't make these things work, it is about time for its people to start looking for the fault within themselves, their government, and their society, rather than discarding the ideas as unworkable, because the rest of the civilized world has already proven them out.

>I find it very amusing that you would tip a server who was noticably rude.

Yes, it is an absurd system. Basically, employers offload the responsibility of paying their employees on customers. So a tip is not a tip, it is an expected surcharge. Sure you can not tip, but its incredibly socially unacceptable. Furthermore, most people leave the same tip no matter what. Even if you had an exceptionally good or bad server, many places pool tips anyways.

When I was about 15 my friends and I accidentally forgot to leave a tip for the waitress. It was truly an accident. She followed us outside and to our car asking us for her tip. We got her to go back inside and then ran away because we weren't going to give her money after that...

If you do not tip, they have no way of knowing if the lack of tip is because you never tip, or because you were displeased with the service. A small tip resolves this ambiguity.

It's somewhat common to leave a two-cent tip to signify you were displeased with the service.

A low tip can send a stronger message than no tip. If I was really upset with a waiter for some reason, a one-cent tip would convey my displeasure much better than leaving nothing at all. Not that I've had occasion to do this.

"Automatic deduction for cabbies who often tip themselves and hand you less change without asking - give me my change in full and I'll tip you, thanks."

Couldn't that be entirely (and easily) avoided by simply handing them cash and asking for a specific amount back? Ie. fare is $10 and you want to give a $2 tip, you hand them a $20 and ask for $8 back. Is there a benefit to not asking for a specific amount back that I'm missing?

> Couldn't that be entirely (and easily) avoided by simply handing them cash and asking for a specific amount back? Ie. fare is $10 and you want to give a $2 tip, you hand them a $20 and ask for $8 back. Is there a benefit to not asking for a specific amount back that I'm missing?

I've actually never seen anyone pay for a cab any other way but asking for an amount of change back (well, besides just giving them the amount you want to give them and getting out of the cab).

I find tipping culture really confusing. How is it that when your plumber saves the day and gets your leak fixed (saving you expensive flood restoration costs) you pay the price on the invoice, yet for a car ride from A to B it's worth paying 20% to 30% over the invoice price? Compare that to buying a new vehicle where, regardless of how knowledgeable and spectacular the salesperson is, you are considered to be getting a bad deal if you don't bargain to below invoice price.

In the US particularly, tipping is basically just making up for the fact that the person is underpaid. Plumbers are typically very well rewarded for the work they do - restaurant waiters, less so.

I agree.

And it's this tacit admission that those workers are underpaid that makes this particularly embarrassing. We can generally agree these people are underpaid (we all generally tip and agree on the reasoning behind it) yet we can't agree to raise the minimum wage to get them a livable income.

Waiting tables and other tip-based compensatory jobs are specifically granted an exception to the minimum wage, so I don't think raising the minimum wage would change anything.

Depending on where you work and how experienced you are, waiting tables or bartending can be very lucrative relative to the amount of education or experience required to do the job. I'll certainly not suggest that a Denny's waiter or a Wal-Mart cashier are not underpaid, but grouping all waiters together and labeling them underpaid is an oversimplification.

...but don't they get underpaid because they make it up in tips?

Vox said it well with "consumers should not be responsible for paying the incomes of a restaurant owner's employees. "

You've got the cause and effect backwards. They get paid so little because they are already getting tipped.

Otherwise you'd tip the poor son of a bitch at McDs who makes 7 an hour.

Specifically with regard to vehicle sales, dealerships absolutely do not pay invoice price. Between dealer cash, customer cash, holdbacks and other financial things, it is all but a made up number.

For anyone interested in this topic, This American Life recently did a great hour long radio show / podcast on how dealerships work:

http://www.thisamericanlife.org/radio-archives/episode/513/1...

"We spend a month at a Jeep dealership on Long Island as they try to make their monthly sales goal: 129 cars. If they make it, they'll get a huge bonus from the manufacturer, possibly as high as $85,000 — enough to put them in the black for the month. If they don't make it, it'll be the second month in a row. So they pull out all the stops."

Link from a while back on the case against tipping: http://www.vox.com/2014/7/17/5888347/one-more-case-against-t...

I think that the standard rationalization is that waiters and taxi drivers provide a subjective service. A good waiter will refill your drinks often, make sure you have everything you need, etc. A good taxi drive will get you someplace faster than a bad one, will know shortcuts and longcuts, and understands patterns of traffic to avoid them. A plumber, on the other hand, typically performs a pretty objective job, short of outright incompetence.

But yes, it's confusing, and it's probably a pretty bad deal for everyone involved.

  > A good taxi drive will get you someplace faster than a bad one, will
  > know shortcuts and longcuts, and understands patterns of traffic to
  > avoid them.

A good taxi driver optimizes the ride in order to maximize their fares. The more runs a driver can make between downtown and the airport, for example, the greater their income will be. Besides which, if tips impact the route the driver takes then passengers ought to tip up-front to avoid being "taken for a ride". And if the tipping percentage is to reward efficient driving, how would someone unfamiliar with the city (or drunk, or blind, or ...) know whether they got ripped off or not? Doesn't this ultimately result in tipping someone in order to prevent unethical behavior?

A lot of companies are giant faceless MBAocracies, and all their front line staff are designed to be minimum cost minimum fuss drones, which selects for checked out losers. The purpose of tipping is to bypass institutional apathy so you can deal with someone who will treat you as human for the right price

But you are supposed to tip even poor taxi drivers and waiters.

And, in my experience, taxi drivers displeased with your tip will make it clear, even if you have no idea what makes for a fair tip.

> A good taxi drive will get you someplace faster than a bad one, will know shortcuts and longcuts, and understands patterns of traffic to avoid them. A plumber, on the other hand, typically performs a pretty objective job, short of outright incompetence.

I find the opposite is true. There taxi drivers are barely different, but the quality of plumbers varies greatly.

In addition to the other reasons given, I think a lot of it is just historical. If an industry is traditionally tipped, there's a lot of inertia against moving it to be non-tipped. Employers won't want to pay more when their employees are getting tips, and customers won't want to stop giving tips until employers pay more. Likewise, there's a lot of inertia against moving the other way. I'd wager a lot of it is just luck of the draw over time.

Some great tips here for budding data scientists:

* Form a hypothesis before you start looking at data, else you're susceptible to post-rationalization.

* When in doubt, have the raw data available to reconcile with aggregate data.

* When publishing results, include your data sources, so that others can verify your findings.

(Since your comment appears to be the only one here about the article itself, I'll piggyback off it.)

This is a really great data analysis. The bottom-line conclusion of "cab drivers who are driving CMT programmed cars are making more money in tips" will definitely cause the Verifone drivers to say "Wait, what?"

The Businessweek article also shows the limitations of the so-called data journalism. The two reporters grabbed the data from the database, made some pretty graphs, got some quotes and called it a day. It took some readers revisiting the data to tease out the real insights.

But that's a bit unfair to the Businessweek guys. They're on a deadline and won't get paid extra for geeking out on the data too much, so their goal is to get the initial news out there to the world. Ben Wellington's interest wouldn't have been piqued if the article hadn't been written in the first place.

I guess what I'm saying is that it's a win all around.

Since Uber is currently banned in Vegas I took a cab and the defaults were 20/30/40 which is insane. They also take a $3.00 credit card processing fee, also insane.

Is a 20% tip the norm for cabs? I don't live in NY and don't take cabs often, but I would just assume tipping would be similar to eating out in the US (10% for bad service, 15% norm, and 20%+ for good service). Anyone care to weigh in?

Also I always heard how "cheap" taking a taxi was in NYC. That's why people did it all the time. But looking at his example fares ($40+), that doesn't seem cheap to me, in fact quite unaffordable.

Still cheaper than London's insane taxi fares however.

The table of example fares only includes trips with tolls, which are going to have higher totals, even without the toll.

The fare for people jumping around Manhattan would be quite a bit cheaper on average.

> Is a 20% tip the norm for cabs?

Not historically. It used to be 10% or 15%. But then they put a screen in the back of the cab whose software says, "How much would you like to tip? [20%] [25%] [30%]" and then in a less enticing spot, "[Other]".

The power of evil, manipulative UI design is being used to make riders think that 25% is the typical taxi tip, and in a short amount of time, they'll have managed to use this fake-it-till-ya-make-it strategy to turn that lie into the truth.

Within Manhattan, you can usually get where you're going for under $20 sans tip. When I lived there, I wouldn't necessarily call that "cheap" compared to the underground alternative... but definitely just cheap enough that, after a long day, I would raise my hand if I saw the light on instead of walking the next block to the subway.

But how often do people use cabs in Manhattan? If you used it say twice a weekday then that is like $10K a year on cabs alone!

$40+ fares, like in that table, are almost exclusively airport fares. A trip to the airport is usually around $50 in a cab.

If you are taking a cab within Manhattan for example, a very short trip is usually $5-10, and a fair from say, midtown to downtown, is usually $15-20. So yes, much more affordable than a London black cab, and much more similar to a London minicab.

As another sibling stated, 20% is now the norm entirely because the software defaults are 20%, 25%, and 30%. That was way higher than historical, but people are lazy and feel cheap if they click "Other."

Also, in NYC at least, 18-20% is increasingly pretty much the norm for food service. I almost exclusively tip 20%, regardless of the level of service.

> I would just assume tipping would be similar to eating out in the US (10% for bad service, 15% norm, and 20%+ for good service)

It's actually 15% for bad service and 20% for normal. Kinda strange that tipping has been inflated from the standard 10-15% the past decade or so.

How do you define what it "actually" is?

The 10,15,20% is still what I hear. Perhaps it differs based off where you live in the US? I've lived in CA (both northern and southern) and the norm is generally accepted to be 15%.

I would say 18% is the standard tip as that is what most restaurants (in GA at least) will charge as "automatic gratuity" for parties of 6 or more. The math on 20% is easier so a lot of people default to 20%

I always thought that 18% is standard for 6+ parties because 6+ parties are much harder to deal with and so require a higher tip. It seems a little silly that they would require a "normal" tip

Its just that it's the lowest automatic option. If the choices were 10, 20, and 30 10 would probably be the most selected option.

In fact, ~10% seems to be the most punched in option.

I usually just manually type "1.00" or "1.50" as tip for a short city fare (under $15), And "5.00" for a long trip (airport). I guess I'm cheap.

I would also be interested in a histogram of raw tip amounts to see if people cluster at 1.00, 1.50, or 2.00 as well. We could even bucket by fair sizes.

It would also be very cool if we had metadata on the credit card, for example, do corporate cards tip a lot better than consumer cards. Presumably company-paid travel leads to better tips.

>>Presumably company-paid travel leads to better tips.

Companies I've worked for have mandated the tip size (15% both places) that they'll allow for reimbursed travel, although I'm not sure how universal that is.

I was shocked when I saw these defaults on recent trips to NYC. I lived there before these machines and 15-20% has always been the standard--less if the driver was rude, reckless, or deliberately slow--but almost never more than 20%.

Including the surcharge is fine because it's part of the fare, but including tax and tolls is unreasonable.

I typically choose 20% or Other. Now I will be sure to check the software as well.

When I moved to NYC, there was no credit card payement in the cabs. Some friends told me that they tip about 10% (and at least $1). I was surprised when they introduced credit card payement to see that default tip was much higher than that. I assumed it was just to trick people into tipping more, and I kept with my old tipping habit. But this article makes me wonder, should I tip more?

Including taxes when calculating the tip seems like a class action lawsuit waiting to happen.

But it's the norm and expectation. Theres a reason why the post tax total is the biggest number on the check. (Other than thats how much you owe)

Agree. It is the norm. All restaurants, the most common places to tip, do this too. If they calculate/print suggested tip amounts they use post tax and also if you trigger a gratuity included they use post tax.

To be far, I think most people use post tax when calculating tip in their head too.

One thing I hear a lot is to just double the sales tax. Around CA, when it was around 7.5%, it added up to a nice 15%. Since they recently increased sales taxes to about 8.5-9% depending on the city, it doesn't work that way. Or yes, if you account for tip inflation.

One thing I saw recently is that a place did 18, 20, 22%. I'm pretty sure I tipped lower just for that.

> If they calculate/print suggested tip amounts they use post tax

I see it done both ways.

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