Jan 29, 2022 - Economy & Business

Tipping has soared during the pandemic

Illustration of a stack of bills balanced on a nickel with a penny and quarter see-sawing on top
Illustration: Sarah Grillo/Axios

From restaurants to ride-sharing, Americans are tipping a lot more than they did before the pandemic.

Why it matters: The past two years have upended the way we express appreciation to the people who provide us food and services.

Where it stands: We're leaving tips much more frequently, in part because a lot more transactions are prompting us to — sometimes before the service we're tipping for has been completed.

By the numbers: Overall, gratuities are up, according to experts and data provided to Axios by digital payments company Square.

  • Immediately before the pandemic, people tipped on about 63% of in-person credit-card transactions that provided an option to tip, according to Square. By August 2021, they were tipping on about 66% of such payments.
  • The average tip amount was about 20%, pre-pandemic. It has risen slightly, to about 21%.

Tipping on remote transactions — things like ordering takeout — has become far more common.

  • The percentage of remote transactions in which the consumer tipped (when the chance was offered) has soared from about 46% before the pandemic to about 86% now, according to Square.
  • The average size of remote-transaction tips has gotten smaller — from 21% immediately before the pandemic to 17% now — but that's mainly because the overall number of those tips has risen so dramatically, according to Cornell University consumer behavior professor Michael Lynn, an expert on tipping.

“People tip less for carryout than for dine-in,” Lynn says. “But when we don’t have that dynamic, tips are increasing during the pandemic.”

  • The average person tips 20% at a sit-down restaurant, 17% for food delivery and 15% for carryout, according to a June survey by CreditCards.com.

Uber is now prompting riders to tip before the ride is over. That option was always available, but the app previously didn't send a prompt until the end of the ride.

  • Before-the-trip-is-over tips have increased 20-fold since Uber implemented the change, Uber spokesperson Harry Hartfield tells Axios.
  • “Customers have gone out of their way to support drivers, with the average tip increasing throughout the pandemic in the U.S.,” Hartfield says.

The other side: Tipping opponents have advocated for ending the practice at restaurants and service destinations by raising prices to enable businesses to pay workers a fair wage.

  • But the trend hasn’t extended beyond a couple hundred restaurants — many of which soon reversed their policies.
  • Even New York restaurateur Danny Meyer, who famously ended tipping at his restaurants in 2015, announced in 2020 that his no-tipping endeavor was over.
  • “Restaurants that eliminate tipping — their online ratings go down,” Lynn says.

The bottom line: America is undergoing a cultural shift, with tipping permeating areas of life where it was previously uncommon.

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