On my way to the Las Vegas airport I asked my cab driver if he'd been busy today and it turned out to be an open invitation for him to vent. Apparently he'd had a poor day and it lead to him showing me his last two paychecks and talking about how cabbies earn their living.

Cabs in Vegas use meters with a fixed rate of $3.30 for the first 1/11th of a mile, $0.30 fees for each additional 1/11th of a mile, and $28.00 per hour for time spent waiting. A driver earns about 28% of his meter, so if you take a $100 cab ride his share is $28. On that $28 the government assumes about a 23% gratuity, or $6.44, and he'll pay taxes on $34.44. It seems like the problem arises with shorter trips. For instance the 1.5 mile trip from the Luxor to the MGM Grand is about $5.10 and most people give him $6.00, about an 18% tip. His withholding will be based on assumed earnings of $6.27 though.

Subject aside he was a very friendly and personable guy. The average cabbie in Las Vegas makes around $30k/year, or $600/week before taxes.

The moral is to tip at least 20% and remember that a few bucks makes a big difference.