To Insure Prejudice: Racial Disparities in Taxicab Tipping
114 Yale L.J. 1613 (2005)
Many studies have documented seller discrimination against consumers, but this Essay tests and finds that consumers discriminate based on the seller's race.
The authors collected data on more than 1000 taxicab rides in New Haven, Connecticut in 2001. After controlling for a host of other variables, they find two potential racial disparities in tipping: (1) African-American cab drivers were tipped approximately one-third less than white cab drivers, and (2) drivers who are "rational" statistical discriminators would expect African Americans to tip 56.5% less than white passengers (African-American passengers are also 3.7 times more likely than white passengers to leave no tip). Both black and white passengers participated in the discrimination against black drivers.
These findings suggest that government-mandated tipping (via a "Tip Included" decal) might reduce two different types of disparate treatment. First, mandated tipping would directly reduce the passenger discrimination against black drivers documented in this Essay. Second, mandated tipping might indirectly reduce the widely documented tendency of drivers to refuse to pick up black passengers.