Thinking About Tipping Culture

Hello, hello. And the topic today is tips. So, do you like that we have a culture where we pay tips? Would you prefer that to a culture where the prices are fixed and there are no tips? And for me it’s kind of mixed.

So first of all, we need to recognize that since payment methods have become electronic in the way that they have, there are many more places that ask us for tips. It used to be that tips were reserved for taxis and restaurants and very few things. A hairdresser for sure, but now they’re everywhere. You order coffee and you pay with a machine and the machine asks, would you like to add tip? Suddenly, we pay tip in all kinds of ways. maybe grocery stores will start asking for tips soon. Lots of places are self-service now include tips.

For me, tips are about the power of the consumer. We have a service person and we have a consumer. If I pay a tip, I have some power. To a waiter it says, “If you’re nice to me, you’ll get more of a tip. If you’re not nice to me, you’ll get less of a tip.” I like it as a way to balance the powers, right? You’re going to give me a service at the end, but I want you to think about the fact that you need to give me good service. I like it for this reason. And because of that I don’t like tips that are not about service that I can reward. Like if I buy coffee from behind the counter, it’s just a way to hide the price. The price is $5; it will become a bit more. It’s a way to extract more money from me, but it’s not really about the power between me and the server.

By the way, I’ve used tips as a power the most with taxi drivers. Some of them are great, some of them use their phone while driving, some of them drive a little bit too fast, and I usually say something, and if they listen, I give them the regular tip, or maybe a little higher, if they don’t, I give them less. Clearly, there are many of them that when I ask, “Would you please drive slowly? Would you please not use your phone?” they get angry at me rather than the other way around, and I think the tip in that case is important. So, I like tips that are responsive to service, and I don’t a tip that is a way to get us to pay more but has nothing to do with tips. But of course, not all services are the same. For example, in restaurants, what if the dish comes out not so good? Is it the waiter’s fault? Not really, it must have been something in the kitchen. In taxis, I feel that the tip is exact to the person. No other people are involved. They are making the decision to use their phone while driving. In restaurants it’s much more complex.

Okay, so back to the question: do we like tipping or not? I think in most cases the answer is that I don’t. I would have preferred that the restaurant is in charge of paying the waiters a living wage and it’s not about tips. In cases when the service is clearly observable and directed at the person serving, like taxis, then I think the tips are a good mechanism. I know that the taxi driver has an incentive to drive me extra fast to get the next ride. I don’t want him to drive extra fast. Tipping is good in this case but I think that the cases where tips are good are very minimal.

And even when tips are good, we can easily replace them. Imagine, for example, that a taxi company would send me a little survey afterwards that asks, “Hey, did the person drive at the speed limit? Did they use their phone?” And I would respond to them directly and they would then be able to have a discussion with a taxi driver. I think that would be even more convincing.

So anyway, do you like tips? I don’t. In most cases, I think that tips are just a way to extract more money from us as a consumer in a way that we don’t really think about and I don’t like it. Just charge us more from the beginning. Let’s see if people want to pay that amount or not. Don’t hide the price. I don’t like situations where tips to the person involve lots of other people and we don’t know who to reward or not. And even when it is direct, I think there are better ways to try and improve service quality. Let the person get their wages and let the company deal with drivers in cases that are not great.

So to more balance of power between service providers and consumers, to clear pricing, to the ability to give feedback that creates better service.