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Has Tipping Gone Out of Control?

Has Uber yielded to "gratuity creep"?
Wednesday, August 9, 2017
Antony Davies
Antony Davies
James R. Harrigan
James R. Harrigan
Culture

In 1922, famed etiquette writer Emily Post advised her readers that 10% is the standard for tipping your waiter. Since then, “gratuity creep” has been so steady that tip jars are now ubiquitous and 25-30% is considered the rule in New York City. Uber once resisted this trend, but recently added a tipping feature to its app. What is the economic rationale behind tipping? Does the usefulness of tipping diminish the more that a certain rate becomes an expectation? At a certain point, would it be better to do without the fuss involved and simply include that portion of a service provider’s compensation in the wages paid by the employer? Economists Antony Davies and James Harrigan explore these questions and more.

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Antony Davies
Antony Davies

Dr. Antony Davies is the Milton Friedman Distinguished Fellow at FEE, associate professor of economics at Duquesne University, and co-host of the podcast, Words & Numbers.

James R. Harrigan
James R. Harrigan

James R. Harrigan is Managing Director of the Center for Philosophy of Freedom at the University of Arizona, and the F.A. Hayek Distinguished Fellow at the Foundation for Economic Education. He is also co-host of the Words & Numbers podcast.

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