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This article is beyond absurd. It's bending over backwards to promote how tipping is actually for the tipper's benefit. And that recommending large tips via t

This article is beyond absurd. It's bending over backwards to promote how tipping is actually for the tipper's benefit. And that recommending large tips via touch screen menus is so helpful in saving them the time to do mental math. Then the author places an arbitrary value of $1 on that mental math (???) to exclaim that large suggested tips saves the passenger both time and (fictional) money! Welfare has increased by more than 200,000 (completely made up dollars) per day! Seriously, wtf, Stanford Business?

celtain 5y ago
Assuming you need to tip (and given that 97% of riders tip, it seems like you do), not having to calculate the amount is clearly a benefit. The author didn't just make up that $1 value, it's derived from the situations in which riders choose a custom tip instead of using a default option.
- LegitShady 5y ago
  >not having to calculate the amount is clearly a benefit. Why? Calculating a tip isn't something that has a failure state because even if you give the wrong amount it won't matter. On top of that the exercise of calculating the tip is beneficial for your long term mental acuity. I'm not sure why doing a simple calculation that doesn't benefit me and has no failure state is a benefit. It's a benefit for the tippee maybe, but not the tipper.
  - celtain 5y ago
    Doing work incorrectly is still doing work. The presence or absence of a failure state doesn't matter, what matters is the time and mental effort you have to expend. It's not a lot of effort, but $1 also isn't a lot of money. >On top of that the exercise of calculating the tip is beneficial for your long term mental acuity. If you can honestly say that you think most people enjoy doing math, I don't know what to tell you.
    - fshbbdssbbgdd 5y ago
      The machine should allow people who don’t like doing mental math to select from some pre-calculated numbers, then also give the option of playing a mini game that presents the user with math problems, riddles, visual logic puzzles, and memory tests. This will generate millions of dollars in expected utility, so the taxi companies are morally obligated to do it.
      - celtain 5y ago
        I don't understand how "replacing a manual process with an automated one provides positive value" is a controversial opinion on hacker news.
        LegitShady 5y ago
        It doesn't provide $1 worth of value to anyone but some of the highest earners for whom such a "time savings" of seconds might be valuable. It's primary value is to the person being rolled because they aren't paying for anything. Automating something people weren't getting laid to do provides value to someone else not the person paying. Maybe it's not controversial so much as misguided and looking at the picture from the wrong perspective. Who is it providing value to? What did that person save through the automation and how much is that worth if you actually parse out how many such "value periods" they experience in a day. The idea that a very simple division question is worth $1 when everyone has a cell phone they already paid for in their pocket to do division for them is ludicrous when you realize there are tens of thousands of such time periods in a day but very few people are making tens of thousands of dollars a day.
    - LegitShady 5y ago
      Taking 10 or 15 percent of a number even if you get it wrong is not difficult and does not take any appreciable time. If you assign that 1 dollar to every instant of every day you will not find a real daily value for your time. The idea of $1. Ring appropriate is crazy. Let's say you took 10 seconds to calculate it which is generous and also time to lunch it into a phone. There would be more than 36 thousand of such time/labour units in a given twenty four hour period. Unless you hang around with CEO's you aren't making 36 thousand a day to hand it out so easily. $1 for nothing or value is a lot ofoney.
- beezle 5y ago
  If it takes you 30 seconds to calculate the tip that $1 is at a $120/hour rate. Most people don't take home that amount ($250k/year). Would hope most people could do the math in under 15 seconds as well, doubling that rate. A far more reasonable "value" would be 10 cents.
Ensorceled 5y ago
This is actually a pretty good economic analysis that you are projecting you own biases onto. I take it you are not a tipper and disagree with tipping in general? The article plausibly establishes that tipping is a cultural norm, hence people wish to tip. It establishes a threshold beyond which the rider will manually enter a tip rather than use the menu from statistics from millions of rides. It derives the “arbitrary” $1 amount from the difference in tips once the manual methods are used. I don’t see any methodology issues on the surface.
- nostromo 5y ago
  I am happy to tip based on social norms, but I despise dark patterns, and that's what's being used here to try and inflate tips. Nobody is rationalizing a larger tip saying, "I will tip more to avoid doing mental math." What is happening is they are busy getting out of a cab and being forced to either spend a minute or two fighting an annoying touch screen to enter the amount they'd like to tip, or to just give in and give 20-30%. Note that suggested tip amounts did not center around the cultural norm of 20%. Instead, that is the lowest suggested tip. This is weaponized behavioral economics put to use, in this case to push up tips.
  - kfarr 5y ago
    Exactly this is a UI dark pattern that forces consumers into a specific option, not an economic utopia of helping the working class via social norms The fact this is turned into a paper like this shows the disconnect between reality and economics research. To compare and contrast, I could see a skilled growth product design expert looking at this data and say, despite an existing cultural norms of 15% tipping, through our UX design we have altered behavior away from the norm by making lower tip options difficult and time consuming to choose.
    - wolpoli 5y ago
      > The fact this is turned into a paper like this shows the disconnect between reality and economics research. I am not even sure if this is even an economic paper. After all, Donkor is an assistant professor of marketing at Stanford Graduate School of Business, and not in the economics department.
deleted 5y ago
[deleted]
brtkdotse 5y ago
Do tips count as actual, taxable income or is it a wink-wink arrangement where the money goes under the table?
- gruez 5y ago
  Legally it counts as taxable income. However, if you receive it in cash, it's trivial to not pay taxes on it.
  - daniel-cussen 5y ago
    For now. Soon as there's more inflation...who knows.

celtain 5y ago

Assuming you need to tip (and given that 97% of riders tip, it seems like you do), not having to calculate the amount is clearly a benefit. The author didn't just make up that $1 value, it's derived from the situations in which riders choose a custom tip instead of using a default option.

LegitShady 5y ago
>not having to calculate the amount is clearly a benefit. Why? Calculating a tip isn't something that has a failure state because even if you give the wrong amount it won't matter. On top of that the exercise of calculating the tip is beneficial for your long term mental acuity. I'm not sure why doing a simple calculation that doesn't benefit me and has no failure state is a benefit. It's a benefit for the tippee maybe, but not the tipper.
- celtain 5y ago
  Doing work incorrectly is still doing work. The presence or absence of a failure state doesn't matter, what matters is the time and mental effort you have to expend. It's not a lot of effort, but $1 also isn't a lot of money. >On top of that the exercise of calculating the tip is beneficial for your long term mental acuity. If you can honestly say that you think most people enjoy doing math, I don't know what to tell you.
  - fshbbdssbbgdd 5y ago
    The machine should allow people who don’t like doing mental math to select from some pre-calculated numbers, then also give the option of playing a mini game that presents the user with math problems, riddles, visual logic puzzles, and memory tests. This will generate millions of dollars in expected utility, so the taxi companies are morally obligated to do it.
    - celtain 5y ago
      I don't understand how "replacing a manual process with an automated one provides positive value" is a controversial opinion on hacker news.
      - LegitShady 5y ago
        It doesn't provide $1 worth of value to anyone but some of the highest earners for whom such a "time savings" of seconds might be valuable. It's primary value is to the person being rolled because they aren't paying for anything. Automating something people weren't getting laid to do provides value to someone else not the person paying. Maybe it's not controversial so much as misguided and looking at the picture from the wrong perspective. Who is it providing value to? What did that person save through the automation and how much is that worth if you actually parse out how many such "value periods" they experience in a day. The idea that a very simple division question is worth $1 when everyone has a cell phone they already paid for in their pocket to do division for them is ludicrous when you realize there are tens of thousands of such time periods in a day but very few people are making tens of thousands of dollars a day.
  - LegitShady 5y ago
    Taking 10 or 15 percent of a number even if you get it wrong is not difficult and does not take any appreciable time. If you assign that 1 dollar to every instant of every day you will not find a real daily value for your time. The idea of $1. Ring appropriate is crazy. Let's say you took 10 seconds to calculate it which is generous and also time to lunch it into a phone. There would be more than 36 thousand of such time/labour units in a given twenty four hour period. Unless you hang around with CEO's you aren't making 36 thousand a day to hand it out so easily. $1 for nothing or value is a lot ofoney.
beezle 5y ago
If it takes you 30 seconds to calculate the tip that $1 is at a $120/hour rate. Most people don't take home that amount ($250k/year). Would hope most people could do the math in under 15 seconds as well, doubling that rate. A far more reasonable "value" would be 10 cents.

Ensorceled 5y ago

This is actually a pretty good economic analysis that you are projecting you own biases onto. I take it you are not a tipper and disagree with tipping in general? The article plausibly establishes that tipping is a cultural norm, hence people wish to tip. It establishes a threshold beyond which the rider will manually enter a tip rather than use the menu from statistics from millions of rides. It derives the “arbitrary” $1 amount from the difference in tips once the manual methods are used. I don’t see any methodology issues on the surface.

nostromo 5y ago
I am happy to tip based on social norms, but I despise dark patterns, and that's what's being used here to try and inflate tips. Nobody is rationalizing a larger tip saying, "I will tip more to avoid doing mental math." What is happening is they are busy getting out of a cab and being forced to either spend a minute or two fighting an annoying touch screen to enter the amount they'd like to tip, or to just give in and give 20-30%. Note that suggested tip amounts did not center around the cultural norm of 20%. Instead, that is the lowest suggested tip. This is weaponized behavioral economics put to use, in this case to push up tips.
- kfarr 5y ago
  Exactly this is a UI dark pattern that forces consumers into a specific option, not an economic utopia of helping the working class via social norms The fact this is turned into a paper like this shows the disconnect between reality and economics research. To compare and contrast, I could see a skilled growth product design expert looking at this data and say, despite an existing cultural norms of 15% tipping, through our UX design we have altered behavior away from the norm by making lower tip options difficult and time consuming to choose.
  - wolpoli 5y ago
    > The fact this is turned into a paper like this shows the disconnect between reality and economics research. I am not even sure if this is even an economic paper. After all, Donkor is an assistant professor of marketing at Stanford Graduate School of Business, and not in the economics department.

deleted 5y ago

[deleted]

brtkdotse 5y ago

Do tips count as actual, taxable income or is it a wink-wink arrangement where the money goes under the table?

gruez 5y ago
Legally it counts as taxable income. However, if you receive it in cash, it's trivial to not pay taxes on it.
- daniel-cussen 5y ago
  For now. Soon as there's more inflation...who knows.