So a in Businessweek caught my eye the other day. It discussed NYC taxi rider tipping habits and concluded that riders usually tip between 20% and 25% using the histogram below: Their plot showed bumps at 20%, 25% and 30%, the default tip options on the credit card readers in cabs, which made sense.

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But something else did not feel right to me about the plot. For the people not using the default buttons, why did so many more end up tipping 21% than 19%? Is every rider rounding up? As I looked more at the article, things kept unraveling a bit. Another chart in the article showed that at 4PM, people suddenly started tipping 1% more. For an explanation of the evening tip uptick, the reporters reached out to Bhairavi Desai, executive director of the New York Taxi Workers Alliance. Her of this increased tip in the article said: “During rush hour, people appreciate the privacy and convenience of a taxi more than being packed in a subway,” Desai says.

“Most of the riders who take taxis in those hours are regulars, who tend to talk more to drivers and have a more sensitive understanding of driver economics.“ Once again, this explanation felt pretty strange to me. A solid one percent gain felt too large for this behavioral response. So I decided to dig in a bit. The first step was to figure out how to calculate a tip percentage.

The TLC data has many cost fields: • Fare Amount • Surcharge - used during peak times • MTA Tax - fifty cent tax on most in-city trips • Tolls • Tip To calculate a tip percentage, the numerator was obviously going to be the tip amount. But what about the denominator? What are we tipping 20% on top of? Should it be just the Fare Amount? Fare Amount plus Surcharge? Or should we be tipping on Taxes and even Tolls? To find out how the in-cab payment systems calculate tip, I took a sample of taxi rides (with toll payments) and tried two different options: • Option 1: Default Tip = (Fare + Surcharge) * 20% • Option 2: Default Tip = (Fare + Surcharge + Taxes + Toll) * 20% I made a table with these two different ways of calculating tip, and I also colored round numbers in green: So for this table, each row has one column with a green box. Tntet Model Question Paper With Answers Free Download Pdf In Tamil more.

There is always either a round number in the tip column (most likely punched in by a rider) or a round value in the option 2 column (indicating choosing a percent, as opposed to a dollar amount). This means that the in-taxi payment system is calculating tips including taxes and tolls! I was pretty surprised by this, but then it got stranger. Here is another sample I looked at: Notice in this sample, Option 1 is much more prevalent in Green than Option 2. Meaning these riders (with the exception of two) seemed to be given defaults not calculated using tax and toll. So what gives? Well, notice the first field in each table.

It turns out that when it comes to calculating tips, payment systems provided by Creative Mobile Technologies (CMT) are programmed differently than those provided by Verifone (VTS). Since this data was from 2013, I looked at a few of my own recent cab ride receipts to verify that the issue is still present. The receipt on the left from RidLinQ (the payment app for CMT) shows the same 20% tip amount of $3.20 as the receipt on the right from Way2Ride (the payment app for Verifone). But the base fares in green are different. Here, CMT is calculating tips including tax, giving the driver the same default tip for less mileage as the Verifone driver. So what does this mean? Science Olympiad Division B Rules Manual 2015.

Well in short cab drivers who are driving CMT programmed cars are making more money in tips from New Yorkers than those driving Verifone programmed cabs. (About half of all NYC cabs have CMT payment systems.) To estimate the total size of excess tips, I looked at the subset of CMT processed credit card rides where users used default tips. The excess tips in 2013 amounted to about $2.0 million in tips from tolls and $3.2 million in tips from the $0.50 MTA tax on most standard rides, for an annual total of about $5.2 million in extra tips. That’s about $200 in extra tips on average for each unique driver of CMT enabled cabs per year!