The podcast discusses the confusion around tipping due to new technology, the rise of Venmo as a social status symbol, decreasing trust in scientists, ESPN's gambling initiative, and the changing landscape of tipping from discretionary kindness to an expectation.
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Quick takeaways
The rise of technology has made it easier for businesses to suggest tip amounts, leading to confusion and a sense of obligation among customers who now feel pressured to tip even in situations where it was not customary before.
While tipping habits at sit-down restaurants have remained stable, there is confusion and opposition among consumers regarding businesses suggesting tip amounts and automatic service charges or tips on bills, emphasizing the importance of tipping remaining a consumer's choice rather than being enforced by businesses.
Deep dives
Tipping practices have become more complex and confusing
A Pew study reveals that tipping in the US has become more expected and has expanded to new contexts, leading to confusion among consumers. The rise of technology, such as Square devices, has made it easier for businesses to suggest tip amounts, prompting customers to feel obligated to tip even in situations where it was not customary before. The default settings on these devices often include pre-selected tip amounts, requiring customers to opt out if they choose not to tip. This shift in tipping expectations has led to frustration and a sense of pressure to tip.
Tipping habits remain consistent, but with increased confusion
Although tipping expectations have changed, tipping habits have not drastically shifted. According to the Pew study, 92% of adults still tip at sit-down restaurants, while other contexts, such as fast-casual restaurants, coffee shops, and ride-sharing services, have lower tipping rates. However, the study highlights the confusion surrounding tipping, with 40% of respondents opposing businesses suggesting tip amounts and 72% opposing automatic service charges or tips on bills. The study suggests that tipping should remain a consumer's choice rather than being influenced or enforced by businesses.
The impact of technology on tipping practices
Technology has both encouraged and discouraged tipping practices. While devices like Square have made it easier for businesses to prompt tip amounts and create an expectation to tip, ride-sharing apps, like Uber and Lyft, initially discouraged tipping by not providing an option to tip drivers. The survey shows that 57% of respondents tip 15% or less at restaurants, with only a quarter tipping 20% or more. However, the data does not specify the percentage of respondents who tip below 15%. Overall, tipping practices have become more complex, with technology playing a role in shaping consumer behavior.
The influx of new technology has changed the etiquette around tipping, and a new study shows Americans are confused. Plus: ESPN’s big bet on Penn Entertainment.
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