A Tipping Guide for the Sharing Economy
Sulagna Misra

While I think the idea of having people doing a job for a “fair” wage sounds great the reality is that tipping is a great incentive program for workers to try harder. So called “research” may say that tipping isn’t based on performance but I’m pretty confident that’s a bunch of bullshit.

We know perfectly well that financial incentives motivate people to behave a certain way and in the workplace it doesn’t matter if you’re shoveling dog shit or you’re slinging deals at Goldman; the reality is that incentives motivate people to work in certain ways. Removing those incentives arbitrarily without a compensatory effect or a process improvement will result in drastically reduced levels of service or quality.

A good example of this in the airline industry. I worked for Skywest airlines for two years as a ground employee at a small town station in Oregon. We had young people, retirees, single moms, high school dropouts with GEDs, college/post grad moms working there. It was a broad spectrum of people doing a very low wage job that had the benefit of free travel. Many people couldn’t afford to travel so that travel benefit wasn’t generally a motivator. However, Skywest as a company gets paid based on contracted performance levels with the “Mainline” carriers such as Delta and United. Every employee in the company from airlines to ground crew had performance based metrics that they were keenly aware of on a day to day basis. Because there were quarterly bonuses based on different categories of performance people were self-organized to perform well and deliver the best results possible. If you have no idea how airlines operate this would be an amazing thing to witness as your small town station employee can usually handle every role of a Delta and United check-in agent, gate agent, baggage agent, ramp agent, cleaning crew, operations, equipment inspection, and de-ice crew. Often these tasks were performed in sequence by a single person — i.e. check-in, go load bags or do boarding at gate, de-ice plane, then marshall it out, and so-on.

I highly doubt these people would have been capable of performing at the level that I witnessed (including myself where I routinely felt out of my element) without process driven training programs and highly organized financial incentives. Skywest for example is still one of the only companies that hasn’t had their pilots join a union. This can be attributed in part to performance incentives and also clear paths for communication between management and all levels of employees.

Tipping may be obsolete but it isn’t a useless mechanism. Something happens between people when tipping occurs and I find mostly that people who don’t understand it should just think of it as karma. You’re part of a chain of goodwill. Don’t be the one to break it or you might be on the receiving end of some terrible, yet to be determined fate. Or if you find yourself miserable all the time you might try to be charitable without expecting something in return. This is known to be the key factor in determining your level of perceived happiness.