I manage a limo company, which is a service where tipping is customary. The average tip amongst all of our drivers and affiliates is between 20-25%, however there are some customers who don’t tip at all or tip so little it would almost be better if they didn’t tip at all so we could believe they just didn’t consider it. And it gets to the point where drivers don’t want to accommodate certain clients, because a decent tip is sometimes upwards of 1/3 of the driver’s net income, and nobody can be expected to enjoying working for 2/3 of their average net.
We have some competitors who will always say “gratuity not included” in their quotes. And we have some competitors who automatically add gratuity to their quotes and call it an “all inclusive” price. We’ve never done either of these things, as we think it’s a bit cringe/taboo to mention tipping before providing a service or when giving a quote, and if we went with an all inclusive quoting process, we might actually be pricing ourselves too far above our direct competition in our marketing space.
To try and give some examples of the complexity of the situation. We have groups of customers, where one family referred their friends to us, then their friends, and so on. So we’re in a position where we have to maintain the same price point for the service for all parties, because they’re all friends and could easily find out that the non-tippers are being charged differently if we were to just increase their fares to compensate the lack of tips. Another example is when one spouse tips more than the other spouse, for example sometimes the husband has cash and will pay the exact fare with zero tip, but when he doesn’t have cash we invoice them via email that the wife handles and always tips. These aren’t really situations where we can “cherry pick” when to accommodate these clients either. I’ve also had clients who tip me, but not the owner (who also drives) and said “don’t tell ______” when they tipped me. And sometimes a driver will get a $5-10 tip on a $400+ service, which just feels
disrespectful.
Here’s what we’ve tried so far; sending email receipts that will specifically show that no gratuity was added, but there’s no way to know that they’ve even reviewed the receipts. Or we’ll claim to be unavailable, and set the ride up with an affiliate, and explain that the affiliate’s price is “$X and gratuity isn’t included” as if that’s how our affiliate wanted us to present the quote. Some will tip, some won’t, and I’m really not sure if either of these tactics has changed anyone’s tipping behavior with us the next time they hired us.
Imagine trying to ask your customers for free money instead of just paying your drivers well. Thank goodness for the people that don’t give into the BS of “tipping culture” after paying $400 for a service and listening to an owner complaint about a $5 tip. What’s disrespectful is not knowing your history of why tips started in states in the south, the lower cost of meals to offset their tipping culture and then telling your employees it’s okay if they make less money as tips will offset the rest when tips are NOT a guaranteed thing as they are optional and NOT mandatory. Money does not grow on trees and people pay for the service they are receiving which includes a driver driving them around in the limo.
You can always add gratuity for a party of 6+ or you can raise your pricing model but just be prepared for competitors that may out bid your model.
Just from a customers perspective for whatever my two cents are worth to your business.
Thanks for the input, we have done an auto-grat when services require multiple vehicles, as sometimes those drivers are working for different companies, but together to provide the service. Like a restaurant handling a big table with 2 servers.
As for driver pay, all of our drivers are independent contractors and set their own rates. Our company just takes a booking fee.