How Tips Are Framed

Gratuities are always and everywhere framed as a % of the customer's payment: you add 20% on top of your meal/ride/etc, and that goes to the provider.

It strikes me that there's another possible framing: namely, how much did you increase the provider's take-home?

Let's take Uber as an example, since each driver only has 1 customer at any given time and there is only one worker involved in each transaction. I've been told by drivers that they receive 40% of what I pay the company: as a result, if I tip 20% then they're effectively receiving 50% more for the ride. (This is before you even calculate their profit; since their costs are unaffected, a tip might well be increasing their profit by 100% or 200% or more).

In restaurants and coffeeshops, the tip is less directly tied to the person's main income – the waiter isn't getting a specific % of the cost of my meal – but (at least in the US) the general principle is roughly the same, where tips add 20% to the customer's costs but double or triple the waiter's salaried pay.

I found myself wondering what would happen if you framed it this way to customers. Personally I feel much more generous (and happy!) thinking I tipped someone 50% of their take than 20% of my spend, even though it's the exact same dollar amount.

Perhaps this means it would be bad to frame it this way, since people might tip less and still feel more generous. Or perhaps it can't be framed this way since it would confuse too many people. Still, nobody can stop you from doing it in your own brain.