Does giving consumers a menu of tipping options make them tip more?
A working paper that looked at millions of rides from New York City Yellow taxi cabs from 2010 to 2018 found that the menu did result in higher tips—up to a point.
For example, when a menu presented three tip options, the average tip increased by about 11% compared with having no menu at all. But increasing the number of tip options beyond that didn’t cause riders to tip more than they tipped when there were three options.
People tend to use tip menus as a reference point or anchor, interpreting the options as indicators of what they should actually tip, says
Kwabena Donkor,
an assistant professor at Stanford University’s School of Business, the paper’s author and a former New York City taxi driver.
