Taxi drivers in New York were worried about adding credit cards to their cabs. The fee (5% or so) would cost them too much, they said.
It turns out that tips are up, way up. They're actually making far more money now.
Why? Because most of the machines offer a shortcut for the tip: $2, $3 or $4.
You can decide to be a cheapskate and hit the $2 button. Except…
Except that if you had paid cash, you probably would have tipped 75 cents for that $4.25 ride. It takes a few more clicks to type in 75 cents, and hey, $2 is the lowest and it's a more 'normal' amount.
It's a three second decision that happens over and over. People really like cues.