The Economics Of Taxi Tipping

January 6, 2015 in Daily Bulletin

Eric Chemi and Ariana Giorgi analyzed some statistics about credit card tipping for taxi drivers in New York City:

  • By default passengers are presented with buttons with the option to tip 20%, 25%, 30% or other.
  • Unsurprisingly 20%, 25%, and 30% are among the most popular tipping amounts, with 20% being the most common.
  • The seventh most common tipping amount is 0%. Credit cards make it easier for passengers to tip nothing and then dash without awkward conversation.
  • The overall average tip is 19% but this increases to 20% during rush hour, in part because of travelers using corporate credit cards.
  • In the early am hours the average tip drops to 18% suggesting that alcohol and generous tipping don’t mix.

See excellent charts, and read more details about the numbers here.

Source: Bloomberg

Via: I Quant NY