An economic theory question.

[CFLoser]

I have an economic theory and I want to explain it to you all to see if its actually correct.


So today I tipped my Uber Eats driver 10 dollars in cash and 6 dollars in the app. The reason y I decided to tip her 10 dollars in cash afterwards was because I realized that $10 for her is actually worth more than $10 for me.

Let me explain.

When you tip someone they want it to be in cash, correct? Because it doesn't get taxed (it does but nobody self reports that income).

However, that $10 I had I was probably going to transfer back into the bank at some point because I only ever have cash when I got leftover from buying drugs.


So wouldn't giving her the $10 mean its worth more than my $10?

 

[seaweaves]

Depends on your unit of value (dollars, units of pleasure utility, its circulation in the economy, sentimentality, etc).

Ten dollars is worth ten dollars.

But one version of the ten dollars would end up being subject to fees. So it is more valuable overall in terms of outcome to give the cash, but ten dollars is still ten dollars.

And of course ten dollars can have a certain amount of utility to someone that differs from the money value. One hundred dollars means more on average to someone who is housing insecure than a millionaire. But that doesn't change the money value.

And it might mean more / be worth more also just for the awareness shown that apps claw back tips regularly, etc, or for their appreciation. But it's still ten dollars you're spending.

Typing on phone, which I'm bad at, so hopefully this is a lil clear

 

[Angst Filled Fuck Up]

Sometimes the gig apps will bug out and not process tips correctly or even take a small percentage of it for the company coffers. Even with cash, the workers do still have to declare it on their tax returns as part of their earnings. But yes, in general, tipping cash is preferred because nothing can go wrong and the workers know they're getting the full amount.