Dumb Luck

Data from Uber riders’ tipping habits show there’s something wrong with our meritocracy. Only 1% of riders always tip.

The United States, founded as a rebuke to the old world, has allowed a de facto aristocracy to bloom in our country, where low taxes on the rich, combined with meager welfare for the poor, lead to income inequality reminiscent of a feudal state. Tips are a tiny part of that big picture. But they’re a perfect representation of the philosophy that underlies it: Tipping survives because of the notion that industriousness must be coaxed from individuals through constant threat of their immiseration.

Service workers are trained to play a game—smile for 20 percent and wink for 30. But the game is worse than dubious; it might not exist at all. The lesson of the Uber paper is that tips mostly aren’t about service. The quality of the ride isn’t nearly as important to a driver’s bottom line as the characteristics of the stranger holding the phone that hails the car. As with so many other aspects of the economy, we sustain a false theory of merit-based rewards to explain a world often governed by dumb luck.

October 30, 2019