To Tip or Not to Tip: Etiquette and the Service Sector in the Gig Economy

Technology and industry changes have altered service sector etiquette, including tipping practices

To Tip or Not to Tip: Etiquette and the Service Sector in the Gig Economy
Image: Pixabay
April 6, 2017

Pizza. Video game consoles. Dog toys. These are just a few of the items you can now buy from the comfort of your couch and have delivered almost directly into your hands.

You can make your purchases on your computer or through an app. You can even still do it by phone if you really want a touch of human interaction.

But what of the person delivering your item or performing the service you bought?

Tipping Tradition

It has long been customary in the U.S. to tip the wait staff at restaurants. It is also common to tip taxi drivers and takeout delivery drivers.

The Emily Post Institute recommends tipping taxi drivers and wait staff at a sit-down restaurant 15-20 percent of the bill, while takeout delivery drivers should generally receive 10-15 percent. Real Simple also recommends 15-20 percent for wait staff, but suggests 10-15 percent for taxi drivers and $2 to $4 for food delivery drivers.

The Gig Revolution

But technology and the gig economy—the growing portion of the workforce that relies on different "gigs," jobs, or projects to make their living, such as freelancers and independent contractors—is forcing us to rethink traditional ways of doing things.

Ride-sharing company Uber has embraced the gig economy and shaken up tradition. Its business model is different from that of traditional taxi companies. It classifies its drivers as independent contractors rather than employees, which means that they do not receive traditional benefits like health insurance and sick pay. It also relies on cashless transactions done in its app.

TIME Money (TM) writes: "Since Uber's inception, tipping your driver is the exception, not the rule." This is largely the result of the move away from cash-based transactions to digital ones using technology like company apps, Square, PayPal, and Venmo. It is also the consequence, as The New York Times (NYT) explains, of Uber's original tipping policy forbidding the tradition altogether.

"Uber drivers have said that the company prevented them from accepting tips and led riders to believe—through statements on its website like, 'Please thank your driver, but the tip is already included' and 'there is no need to tip'—that tips are included in the price of a ride 'when in fact tips are not included,'" the newspaper writes.

Uber under Pressure

The ride-sharing service is now facing increasing pressure to include a tipping option in its app. The lack of such an option limits the amount of income taken home by the drivers, independent contractors who already have to pay for their own insurance, gas, and other concerns usually paid for by traditional companies classifying their workers as employees.

"Uber's refusal to give passengers a tipping option has effectively slashed driver pay, making it all the more difficult for drivers to support their families," Jim Conigliaro, Jr., founder of the Independent Drivers Guild, told TM.

Although the company's app does not include a tipping option, it does now allow the practice in cash, as it states on its website: "If you decide you would like to tip, your driver is welcome to accept."

Tipping in the Gig Economy

So where does this leave consumers who want to follow the proper etiquette on tipping? The practice is still largely accepted, and it is still voluntary. But if you choose to tip, it may mean more than ever to the workers.