From the blog (?) notes.unwieldy.net:
The average New York City taxi cab driver makes $90,747 in revenue per year. There are roughly 13,267 cabs in the city. In 2007, NYC forced cab drivers to begin taking credit cards, which involved installing a touch screen system for payment.
During payment, the user is presented with three default buttons for tipping: 20%, 25%, and 30%. When cabs were cash only, the average tip was roughly 10%. After the introduction of this system, the tip percentage jumped to 22%.
He calculates that the tip nudge increased cab revenues by $144,146,165 per year.
Cheap Talk 
3 comments
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December 5, 2012 at 2:23 am
Eric Crampton (@EricCrampton)
I wonder what portion of the medallion price increase since 2007 is capitalisation of this increased rent…
December 9, 2012 at 5:32 am
Dan
Yes, if you talk to cabbies, they will tell you about a mafia in medallions; that there is serious market power since the medallions are largely in the hands of a few wealthy individuals. Also, I am less likely to take a cab in New York because I think I have to tip 20%, i.e. you cannot ignore demand elasticities either.
December 14, 2012 at 6:25 am
Framing and Nudges: Part 2 « Close to the Edge
[…] to 22% after their implementation! A million dollar nudge if I’ve ever heard of one! (Source: Cheap Talk, from […]