Things that make life easier often cost more than their do-it-yourself counterparts — this is not a new concept. For example: You pay a valet to park your car when spots are few and the weather is bad. You buy a meal at a restaurant and tip the wait staff rather than make food or serve yourself. You shell out extra cash to take a cab rather than ride a crowded bus or train.
But as convenient as these things are, there’s something that can make them a little awkward: paying someone to serve you.
It’s not that we don’t want to compensate people for their work; it’s figuring out how much to pay that gives some people trouble. When you’re in a tipping situation, you’re making a numerical assessment of a worker’s performance, and you often do it to the person’s face — which might sometimes be uncomfortable.
One solution: Remove the physical exchange of money. Here’s where we all can say, “Thank you, technology.”
Removing the Middle Man
Apps that streamline the service-payment process are everywhere, allowing us to use smartphones to pay for parking, coffee, car rides, restaurant bills, odd jobs — if there’s not an app for it yet, someone’s probably working on it.
Take, for example, Cover — an app that allows you to pay for restaurant meals without having to end the experience with money concerns, splitting a bill or calculating a tip. Or, as Mark Egerman, Cover’s founder, puts it: “At the end, you always have to do the same dance.” It’s an unenjoyable one, he says.
Cover is accepted at select restaurants in Manhattan and continues to expand. A customer walks in, tells the server they want to pay with Cover, and everything else happens on the mobile device. Users have a default tip amount they set when they set up their Cover account, but they can change the tip whenever they want. At the end of the meal, they leave, the restaurant closes out the bill and a receipt is emailed to the user.
It may feel a bit like a dine-and-dash the first time you leave a restaurant without that physical transaction, but Egerman says people find it very liberating.
“It’s not about time, it’s not about convenience — you leave on a high note, as if you have an account,” Egerman says. In other words: It’s about having a good feeling.
The Bliss of Simplicity
Swine, a restaurant in the West Village, accepts Cover, and owner Cris Criswell says customers seem to enjoy the ease — they don’t exactly stick around to talk about the experience, of course.
“It’s quite easy,” he said. “They seem to be very happy.”
That’s the key right there: Happiness.
“The consumer is always in control,” Egerman said. “I think the ability to just get up and go is so powerful.”
That feeling isn’t unique to Cover. People who use services like Uber and Lyft, which are essentially a twist on hailing a taxi, describe a similar experience.
“It’s such a relief,” said Jessica Gambacurta, a Columbus, Ohio, resident who has used public transportation most of her life and has loved having the option of Uber. “There’s no stress, too. There’s not any exchange of money, there’s no tipping.”
The Uber model is structured so users don’t have to worry about gratuity — the amount a rider is charged at the end includes everything, though that’s not always clear to first-time users (if you take a close look at the Uber website, it mentions there’s no need to tip). Lyft, an Uber competitor, allows riders to choose a tip for their driver.
Gambacurta has used both services.
“I do like (the tipping option) for Lyft, because I do think tipping does incentivize service,” she said. “There are times I don’t really want to think about tipping or anything. … Sometimes you just want to get where you’re going.”
Michael King, an Uber VIP user in New York City, knows the feeling. He says he uses Uber about twice a week and enjoys the convenience.
“One of the things I really love about Uber over taxis is I often don’t carry cash,” King said. New York taxis accept credit cards, but that slows down the exit process. “You just get there, and you know you don’t have to jostle through your pocket and wonder, ‘Do I have enough on me?’”
But that comes at a price.
King takes Uber a lot more than he used to take cabs before he started using the service, and he knows a trip in an Uber car will cost him more than a cab ride.
“It’s definitely more expensive, but I don’t really think about it,” King said. “The comfort of the ride, the quality of the drivers — it’s just so much better that it’s worth it.” (For the record, not everyone loves the Uber or Lyft experience, but you can find plenty of those stories with a simple Web search.)
Ask and You Shall Receive
It’s pretty clear that many people don’t like calculating tips, and they’re willing to pay more to skip or automate that process, whether they realize it or not.
King talked about the times he takes a traditional taxi: “I don’t mind doing the tip when I take cabs,” he said. “You just hit 20% and you’re done.”
He’s talking about the gratuity option that pops up on the screen when a passenger swipes a credit card in an NYC Taxi. The options are 20%, 25% and 30%, or you can choose your own amount or tip in cash.
That’s a little ridiculous, according to etiquette and tipping expert Jodi R.R. Smith. Smith, who has tracked tipping trends for decades, says a 10% tip is appropriate for cab drivers. But when people are given options, they often go with what’s in front of them instead of thinking through the calculations.
“When you give consumers a choice between good, better or best, they’re almost always going to choose the middle option,” Smith said. “You don’t want to feel cheap.”
But here’s the other thing: Who really knows what’s “appropriate”? There’s no master list of tipping guidelines out there.
“Tipping can seem arbitrary because it is,” Smith said. “Tipping develops over time, and it develops differently in different countries.”
All the more reason to have someone do it for us, right?
That’s certainly the trend. As payment technology changes, you may find yourself prompted to tip more often.
Here’s a recent example: In March, Starbucks released a new edition of its payment app that now prompts you to tip 50 cents, $1, $2 or no tip when you pay with your smartphone. More than 14% of weekly in-store Starbucks transactions happen through the app, and nearly 10 million customers use it. As for the reason behind the preset tipping options:
“We figured this is a good starting point,” said Maggie Jantzen, a spokesperson for Starbucks. She said customers have requested a mobile tip option for a long time, and they’re open to feedback on the tip amounts. “This has actually been one of the most requested ideas.”
So in some cases, consumers have wanted to tip through a smartphone and haven’t had the option. In other cases, merchants have decided to tap this compulsion by prompting patrons to tip in situations they may not typically do so.
The mobile payment system Square gives its merchants the ability to do that. If you’ve ever gone to a business that uses Square, you may have noticed this. For instance, perhaps you’re checking out at the counter at an ice cream shop, and the cashier shows you an iPad with the Square payment system. You may be prompted to tip — but do you normally tip someone who scoops your ice cream? Maybe. Maybe not.
“We really want to give sellers that are using our app the options they need to set up the experience that makes sense for their business,” says KC Simon, a Square spokesperson. “We want to encourage more tips.”
And they do.
“We find that our sellers definitely report seeing more tips when they switch (to Square),” Simon says. “They also report that their customers like to have that option and have it be so seamless: They don’t have to do any math, they don’t have to think about taking change out.”
The payment landscape is changing. The convenience aspect can be really exciting, for both the shopper and the seller, but the thing consumers need to focus on is keeping their expenses in check. If you connect a debit or credit card to your Uber or Cover account, the ease of payment could lead you to drive up large balances on your cards, even overdraft your account.
There’s no harm in taking advantage of technology, as long as you’re smart about it and know what you’re paying for.
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