Thursday, March 25, 2010

Taxi Tipping: Why?

by Mario Rizzo

Every so often people become annoyed about tipping expectations, especially in New York. It is hard not to become annoyed because prices here are already so high relative to other parts of the country. And it is also often the case that service, regardless of what you do ex post, is perfunctory.

Why am I tipping the cab driver whom I shall not see again? I tip cabdrivers very small amounts because they really don’t do anything more than drive the cab. They are not especially careful drivers. Frequently, they don’t know where things are and you then must give them instructions. Furthermore, there are now all sorts of surcharges for evenings, rush hours, and even a tax to support the inefficiently-run mass transit system that I am not taking when I ride in a taxi.

The argument that tipping taxi drivers gives them an incentive to do a better job is vitiated to the extent that people tip a certain percentage automatically. In addition, many other service personnel are not tipped and they do a decent job. In New York we do not tip supermarket baggers and we get our groceries bagged just fine.

In general, an alternative to tipping is to go to another provider who’ll give better service.

Most of all, however, anything above the competitive “wage” goes to the owner of the medallion who may or may not be the cab driver. You don’t really know. (Only about 40% of medallions are owned by drivers, but not necessarily the one who is driving at any given time because the owners will lease the cabs to other drivers.)

I would really like to not tip taxi drivers at all. (And sometimes with bad service I do not.) But I often do simply because drivers sometimes say nasty things to you if they don’t get a tip. It is a failing of my psychological make-up to let that bother me.

Read the rest here.

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