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Most people are comfortable with skimping on tipping their Uber driver.
That’s the conclusion of a new working paper released this week and co-authored by University of Chicago economist John List and published by the Becker Friedman Institute for Economics at the University of Chicago. Uber customers tip on just 16% of rides, the paper concluded, after analyzing 40 million rides. However, the average tip is $3.11, approximately one quarter of their fare.
Here’s what else he found:
• Some 60% of ride-share customers never tip, while only 1% always tip.
• Men tip on 17% of trips, while women tip on 14.3% of trips.
• Women drivers are tipped up to 12% more than male drivers.
• But men and women drivers aged 65 and over are tipped at the same rate.
• Uber customers tip better from 3 a.m. to 5 a.m., and on Fridays and Saturdays at 6 p.m.
• Riders with 5-star ratings tip more than twice as often as those with 4.75-star ratings.
The paper examined UberX trips from Aug. 18, 2017 to Sept. 14, 2017, and analysis was restricted to six cities: Chicago, Boston, San Francisco as three large cities in different regions; Salt Lake City and Asheville, N.C.; and Bloomington, Indiana, a college town.
Uber customers tip on just 16% of rides, he concluded, after analyzing 40 million rides. However, the average tip is $3.11, approximately one quarter of their fare.
“Field experiments provide an empirical look at consumer behavior that wouldn’t be possible otherwise,” List, the Kenneth C. Griffin Distinguished Service Professor of Economics at UChicago, said. “In this case, we found clear differences in tipping behavior informed by environmental and demographic factors, such as gender, age and race.:
“In addition, we were able to go beyond simple measurement and answer the ‘whys’ behind tipping,” he added, according to a statement provided by the University of Chicago. “In so doing, we can provide a unique glimpse of social preferences in the field and provide insights into how norms and defaults work in tandem to change behaviors.”
The paper was co-authored by economist Uri Gneezy of the University of California, San Diego, UChicago alumni Bharat Chandar, currently a doctoral student at Stanford University, and Ian Muir, who now works at Lyft LYFT, -1.10%, and is a former Uber UBER, +1.60% employee who still retains equity in that company.
“Even though social preferences affect nearly every facet of life, there exist many open questions on the economics of social preferences in markets,” they wrote. “We leverage a unique opportunity to generate a large data set to inform the who’s, what’s, where’s, and when’s of social preferences through the lens of a nationwide tipping field experiment on the Uber platform.”
Also see: Is this the worst tipper in America?
Previous research suggests that older customers are often times the most generous tippers, especially when it comes to ride-share services. “Give as if you were taking,” Hisham Matar, the Pulitzer Prize-winning author of the memoir “The Return,” said his late father advised him. But not everyone follows that rule when dealing with members of the service industry, according to separate research.
More than half of Americans aged 65 and over tip 20% or more at restaurants, the highest of any age group, the survey released Thursday by CreditCards.com found. Women are better tippers than men and baby boomers are more generous tippers than millennials, according to the survey.
Government data concluding that women are paid 83 cents on the dollar compared to men might suggest that men would tip more rather than less. But that’s not the case.
Baby boomers are more likely than millennials to tip restaurant servers and taxi or ride-share drivers (63% versus 40%), hair stylists (73% versus 53%), food delivery (72% versus 56%) and hotel housekeepers (33% versus 23%).
Why the differences? “Conventional wisdom says that if you have more money, you tip more,” said Ted Rossman, an industry analyst at CreditCards.com. “So maybe boomers have saved more money, or they have higher salaries if they’re still working.”
For many people, tipping is a source of anxiety. “Almost everyone knows that it’s customary to tip at a restaurant,” Rossman added. “I don’t think most people know that it’s also expected with a hotel housekeeper and a barista.” Or, for that matter, the person who washes your hair.
Case in point: More than half of U.S. adults (53%) said they give their kids’ teachers or child-care providers holiday tips at least on occasion. But a majority of people said they never give their trash/recycling collectors or mail carriers holiday gratuities.
