Cab Customers Bigger Tippers When Using Credit Cards

Filed in archive Credit on October 10, 2007

Cab drivers in New York City have been making a big stink over the fact that they've been forced to add credit card machines to their Taxis, because it forces them to pay credit card transaction fees, thus losing a small percentage of the money they pocket. They've been doing little "strikes" to show their displeasure.

But NYC's Taxi and Limousine Commissioner says that early results show the cabbies are actually making greater profits from the deal, because credit card customers give bigger tips. Where cash customers usually tip 10 to 15 percent, credit card customers are tipping an average of 22%. Take away the credit card fees and that's still over 16%, higher than cash customers.

That sounds right to me, as it does feel easier to be a generous tipper when you're using a credit card, just as it's easier to spend too much money on anything when you're using a card versus using cash.

Do you tip more when you're using a credit card?