How We Tip Cabbies

NYC cab fare data for 2013 is now publicly available. That means 100 million cab rides, 55% of which were paid for with a credit card. COMMENCE TIP CREEPIN’.

Evening rides tip the most (~19%) (“regulars” leaving work, i.e., people with money), and middle of the night rides are the worst (drunk people). All of this makes sense. Even the fact that the seventh most common tip amount on credit card machines is ZERO DOLLARS. I have been shocked by friends who routinely tip a dollar in a cab, no matter the fare. I guess using the machine makes it easier for people to stiff the driver, since there is no verbal communication.

In a follow-up piece, though, Businessweek looks at some of the more surprising tipping trends, such as:

• Tip percentages tend to go down as the fare increases… • … and yet tip percentages increase as fares move from $20 to $30. • But for larger fares of $40 or more, there is a very clear trend that fares ending in the digits 0 or 5 have a much smaller average tip than fares with similar values.

The first point makes sense if you’ve ever ordered a couple eggs at a diner and left a few bucks on a $3 check. Once you get into higher fares, leaving the full 20% gets more painful.

As Businessweek points out, “above $50 people may feel that a $10 tip is good enough regardless of the final fare.”

I took a black car recently where the fare was more than we expected ($40ish) and we only had a dollar or two for tip. Dustin told the driver he’d just run to the ATM Then the driver goes, “It’s fine, I charged you too much, anyway.” Ha! I remember thinking — when I was younger! and more broke! — that cars were kind of a rip off anyway so why tip on top of the inflated fare? I mean, maybe so, but I tend to assume that inflation will be going back to the dispatch company, not the driver.

Either way, I’d venture that that is a bit of the psychology at work with tipping at higher fares. The passenger thinks, “Oh my god, this is so overpriced anyway,” and doesn’t want to be “scammed” out of any more money. Or maybe the fare ends up being more than they expected and they can’t bear/afford to spend 20% on top of that.

Now, the thing where tips are much lower on fares with round numbers is kind of insane. Do people just like keeping that round number, and not want to add a tip on top of it? Do they get mad when the fare jumps into triple digits, or from $59 to $60, say, and decide they don’t want to tip? Businessweek points out that the average tip on a $64 ride ($11.41) is higher than the average tip on a $100 ride ($11.21). They recommend stopping the meter before the number jumps into a round number. You’d end up making up the difference and then some.

People are crazy.

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