Tipping may become obsolete if the gig economy continues to grow into additional service categories. A series of new studies from MIT and the University of Michigan reveal that most people don't feel the need to tip gig workers, even if those workers providing services, like food delivery, for which tipping was formerly assumed.

In one study, researchers described a fictional grocery delivery service and asked participants whether they'd tip for a delivery that took exactly an hour. The study found that people were more likely to tip when the job was described as "the company pays their employees $10 an hour" than when it was described as "the worker agreed to do the job for $10."

It seems that much of the public has accepted the argument (endlessly touted by companies like Uber and Lyft) that gig workers are entrepreneurs (i.e. contractors who have their own business) rather than employees. As such, the public doesn't think of gig workers as being underpaid, in reality, the nature of the gig economy forces workers into a constant price war. As a result, many gig workers actually make less than drivers who receive a salary plus tips.

This situation appears to be a vicious circle. Because they know they won't be tipped, gig workers don't bother to provide superlative service, beyond what's needed not to get dinged on the app.

Another study showed that drivers employed by a restaurant tend to deliver food faster to regular customers they know will tip. By contrast, drivers who work for a service, like GrubHub, tend to make their deliveries in whatever order requires the least driving time. Because the nature of gig work is that the driver seldom has repeat customers who tip, there's no incentive to provide better service, especially since they know they'll probably not get a tip in any case.

California's newly enacted law forcing gig companies to treat workers as employees rather than contractors is unlikely to make tipping popular again, even if other states follow suit. "Once those norms deteriorate, it is very difficult to re-establish them," explains MIT's Erik Duhaime.

I think something else is going on, though. When I wrote a while back that people who undertip (i.e. anything less than 15%) are being jerks, I received a firestorm of email from cheapskates who felt the need to justify their cheapness, usually by saying something like "we shouldn't have to tip" or "we need to punish people who provide bad service."

Call me cynical, I think the real reason some people don't tip gig workers is that they're looking for an excuse--any excuse--to save a little money.

Published on: Sep 13, 2019
Like this column? Sign up to subscribe to email alerts and you'll never miss a post.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.