Tipping is one of the everyday experiences of living in a new place that makes you immediately aware of being away from home. When at home, I understand food service workers, taxi drivers, package delivery people, hotel bellhops, and valet parking drivers to be among the more poorly paid workers. I tip to the maximal extent of the socially acceptable range. I don’t usually think too much about how that range comes about.
We need to start several thousand years ago to understand the moral basis of this outwardly simple exchange. The word ‘gratuity’ is the same as the word ‘grace’, ‘congratulations’, and ‘charisma’, but also merci, grazie, and gracias!  They all derive from a word-root found in the southeast range of Indo-European languages, exemplified by the Sanskrit gir, a song or hymn of praise, but also of grace, or to give thanks.  These come into the northwestern languages through the Greek Χάρις (Charis), charity. Benveniste notes that this semantic heritage requires us to understand ‘gratuity’ not as a isolated grant or benefit, but as the locally-correct behavior governing relationship between kin, between strangers, between socially superior and inferior persons, and between dependent and independent persons.
Gratuities are given not in order to obtain an economic return but to give pleasure within the parameters of these relations. “Rounding up’ as the servers make change sees their task with almost no effort on the diners’ part. As such tips exist alongside ordinary exchanges, but operate from a different social logic: they calculate social position instead of value. We can exchange in many ways with other people: “pleasures, woes, secrets, marriageable children, insults, vengeance, hospitality, conversation, stories or songs, and above all gifts, but the economic justification for exchanges based on a calculation of value is subsidiary or lacking altogether.” 
Gratuities are double-edged. They can be used to honor or to shame, express sympathy or to make one feel needy. If the tip is too large or too small for the context, it can humiliate or incite anger. This is why we feel anxiety around tipping. If you get the amount wrong, even a small gift can have the unintended effects.
A gratuity in a restaurant or taxi is a paradox. It is a gesture that purports to be complete in itself. It only requires acceptance to active its goal, which is to establish a tie of mutual respect between the giver and receiver. Here is the paradox: that tie almost always ends as soon as the tip is received. It cannot be given with the intention of receiving anything in return since the service was already completed. The expectation of a future relationship between the parties is contingent on factors beyond the control of either. If a tip is given in expectation of future service, it abuses the notion of generosity. And if it is not given in the hope of some return favor, then the receiver could interpret it as a gesture of pity, an arrogant demonstration of the superiority of the giver. This ambiguity could be resolved by the size of the tip. When does the receiver of a tip feel honored rather than humbled? When the size of the award exceeds expectations. Where do these expectations come from? The tips of other patrons. In this way, an auction of sorts ensues the end result of which is a growth in honorable tips from 5% to 10% to 15% to 20%, and in the future, farther still.
The tipping practices are not confined to their place of origin. People travel. The effect of Americans in Vienna is bizarre. Servers come to expect that those patrons identified as Americans, Canadians or Mexicans (primarily through their accent in English and/or their inability to communicate in German) will leave a 15-20% tip, “as is the custom in their country”. If they don’t, the servers feel ‘stiffed!’ Place of origin determines the rules of morality, a very Roman concept (natio) but one that is alive and well in Viennese tourist districts.
1. The English word ‘thank’ shares the same semantic space as these words, but derives from think and seemingly has nothing to do with gratuity, except in practice.
2. Benveniste, Emile. 1969. Le Vocabulaire des institutions indo-européennes, Vol. 1, Economie, parenté, société. Paris: Editions de Minuit. P. 199.