As 2018 looms, the dawn of a cashless society feels at hand. Don’t believe it? Try throwing a couple $20 bills on the table next time you’re splitting the check. Or better yet, ask anyone not standing behind a cash register to break a $10 bill.
While the rise of Venmo, Uber, Seamless and Bitcoin et al have made it practically gauche in certain circles to flash a wallet thick with bills, there are many urban workers for whom the shift away from cash represents a serious financial problem. Doormen, elevator operators, manicurists — any employee who relies on small, spontaneous cash tips — are finding themselves left out in the cold by an increasingly cashless world.
“These guys, they don’t tip like they used to, because they don’t have the cash in their pockets like they used to,” said Mark, an elevator operator at an upscale Manhattan co-op, talking about his building’s tenants. He asked to use only his first name because his union and employer forbid him from talking to the press.
It’s a peculiar quirk of modern city life. The stock market is on fire, unemployment is down, and the average price of a Manhattan apartment is now more than $2 million. Yet good luck finding anyone with paper money in her purse.
Earlier this year, a U.S. Bank survey found that 50 percent of Americans carry cash with them only about half the time. In another recent survey, just 11 percent of Americans chose cash as their preferred form of payment, a distant third to credit cards (40 percent) and debit cards (35 percent).
For many people, particularly in dense urban environments, there is simply no incentive to visit the A.T.M. when cab rides, coffee, pizza delivery and even snacks from food trucks can be paid for online or with plastic. And that’s bad news for any worker not participating in the digital economy.
The problem is particularly acute for apartment building staff like doormen and elevator operators, who are not part of any transaction involving their “customer” and typically rely on change from cab rides or food delivery for their tips.
“Long ago, the tenants would take a cab home, and they paid with cash,” Mark said. “So if they get change out of that $20, they give you that change.
“Now they swipe a card in the cab, or when they come with the Uber, they don’t pay, so they just walk out of the car and they go straight up.”
Mark says that his tips have gone from $400 a week three years ago to, at most, $100 a week in 2017.
Roger Johnston, who became a Manhattan doorman in 2004 after working on Wall Street for 31 years, blamed not just the cashless society but also the general economy and cost of living. “These guys, they’re paying good money — almost five grand for a one bedroom,” he said “A cup of coffee is two and change, so a lot of these people, they rent here and walk to work. It’s just the economy.”
Mr. Johnston said his tips have dropped 60 percent since 2008, when he took his current job in a Park Avenue building.
But another doorman at a different Park Avenue building, who also requested anonymity, said it was specifically his tenants’ preference for virtual services that has all but eliminated his tip income. They order everything online, he said, including Uber, food and water. Even the tips for the delivery guys, he said, are online.
He doesn’t blame the tenants, but he is frustrated with the situation. The doorman said he could work a full shift and still not make any tips.
As everyday gratuities have dwindled, holiday tips stuffed into greeting cards — always a critical factor in a doorman’s income — have become more important than ever. Unfortunately, those envelopes are not quite as full as they used to be, Mr. Johnston said.
People who don’t carry cash aren’t oblivious to the plight of these workers. Maya Chung, 27, hasn’t carried paper money since she was a teenager, instead relying on a combination of digital apps, PayPal and plastic to get through her day. Her building in the Crown Heights neighborhood of Brooklyn doesn’t have a doorman, but when she visits the nail salon she perpetually finds herself embarrassed not to have cash for gratuities.
“Every time I go there without cash they miss out on their tips cause they don’t have the mechanism to put it on the credit card, and I always feel bad,” said Ms. Chung, a digital reporter at InsideEdition.com. Still, she can’t seem to remember to visit the A.T.M. before she goes. “I’m just not thinking about it because I’m so programmed to never have cash on me.”
Not all workers who depend on tips are hurt by the shift away from cash. To the contrary, touch-screen tablets in cabs and coffeehouses that prompt customers to give minimum 20 percent tips — under the watchful gaze of the beneficiary — have practically eliminated barriers to tipping those workers. And “there is research showing that people who pay with a credit card seem to pay a bit more than people who pay with cash,” said W. Michael Lynn, a professor of food and beverage management at Cornell University.
But credit card companies charge merchants a fee for processing tips, so there are still businesses — most notably nail and beauty salons — that largely don’t let customers leave electronic tips. This was a problem for Mr. Diaz (he asked not to use his first name because he was not authorized by his employer to speak to the press), a hairdresser of 22 years who works in Chelsea. His tip income dipped considerably until he signed up for Venmo, an app that facilitates person-to-person cash transfers.
Mr. Diaz said that his younger clients rarely have paper money, and often say they’ll tip him the next time they see him. His customers encouraged him to sign up for Venmo, and his tip income is now back to where it used to be, he said.
Though Venmo is popular for peer-to-peer transfers, many other apps, such as Bravo, Tipsta and TipGenie, have sprung up in recent years specifically aimed at providing digital tips for workers who rely on cash. But so far, none have reached the level of widespread adoption necessary to make a real dent.
“The problem is both parties, receiver and giver, have to have the app for this to work, and it’s difficult to create an incentive that causes both groups to sign on,” Mr. Lynn said. “Nobody has figured out how to fix that problem.”