Freakonomics Radio

Why Does Tipping Still Exist? (Update)

96 snips
Aug 6, 2025
John List, an economist and chief economist at Walmart, and Danny Meyer, founder of Union Square Hospitality Group and advocate for no-tipping policies, dive into the complexities of tipping in America. They explore the historical and cultural significance of tipping, revealing why it remains so entrenched. The discussion covers the effects of recent federal tax policies, the intricacies of tipping within the Uber ecosystem, and the growing movement to eliminate tips in restaurants. List and Meyer provide fascinating insights into the future of tipping and its implications for workers and consumers alike.
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INSIGHT

Tipping's Massive Economic Scale

  • Tipping in the U.S. is a $50 billion economy largely influenced by unique social norms.
  • Tipping is almost mandatory in full-service restaurants despite being technically optional.
INSIGHT

Danny Meyer Critiques Tipping Incentive

  • Danny Meyer believes tipping as an incentive for hospitality is flawed and unfair.
  • He argues staff should be kind and prompt without tipping as a motivator.
INSIGHT

Tipping Reveals Discrimination

  • Tipping reflects systemic discrimination, with customers tipping white servers more than black servers.
  • Personal traits like race and gender heavily influence tips beyond service quality.
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