Skip to content
Subscriber Only

Check Here to Tip Taxi Drivers or Save for 401(k)

April 9 (Bloomberg) -- If you have recently been in a taxi in New York City, you may have noticed a credit-card touchscreen, which suggests three possible tips. For rides of more than $15, the suggested amounts are usually 20 percent, 25 percent or 30 percent. You can give a larger tip, a smaller tip or no tip at all, but it’s easiest just to touch one of the three conspicuous options.

The touchscreen makes everything simpler. It also raises an intriguing question: Do the suggestions affect the average tip? Behavioral economists would offer a clear prediction: Because people don’t like to do even a little bit of extra work, the suggestions will matter a lot, and the average tip will increase significantly.