Dive Brief:
- Austin, TX launched a program to assist musicians with receiving tips from the public via a digital device called DipJar. The Music & Entertainment Division of the city's Economic Development Department chose 10 bands from a pool of 100 applicants to participate in the six-month pilot program.
- The city used investment funds to purchase 10 DipJar devices and will invest in a social media campaign to promote adoption of the machines, Karen Jantsch, programming consultant for the Music & Entertainment Division, told Smart Cities Dive.
- The program is designed to help musicians combat rising costs of living as cash transactions are on the decline. "It's not a secret that Austin has had meteoric growth over the past several years. With that growth comes a rising cost of living, which many times affects our creative classes first," Jantsch said. "We're always looking for various opportunities to support Austin's musicians and make sure Austin remains the live music capital of the world."
Dive Insight:
Pilot organizers expect ease of use for the DipJar — users "dip" credit or debit cards into the machine to offer a tip — will prove to be a viable solution, compared to electronic tipping devices that were investigated by the city.
"I think the biggest thing this... pilot period will do is provide a proof of concept," Jantsch said. "If I'm a local musician, I'm not necessarily going to make an investment in a device that is untested... Maybe if we're seeing really big returns others might want to make their own investments in these machines or similar devices."
The tip goes directly into the band's account. DipJar collects fees of 6% plus 17 cents per transaction, Chad Khan, DipJar customer success manager, told Smart Cities Dive. Austin is not involved in the money transaction, only the initial device purchase. Device owners — in this case, the City of Austin — can add branded logos or images to the devices.
"That creates a little more trust. Psychologically, for someone who is tipping it makes sense. They know that [the money] is going toward the right place," Khan said.
DipJar initially was developed as an alternative way for employees in coffee shops to receive tips. It has become popular with nonprofits for fundraising, but private entities use it as well.
Austin began exploring the idea about a year ago when a manager of the Music & Entertainment Division saw one in use as a nonprofit fundraising technique. The city has had conversations with London, which last year launched a similar program for buskers to accept electronic payments. Participants in that program experienced a 50%-75% increase in tips, Jantsch said.
An evaluation after the six-month pilot will determine whether the program continues and if it could expand to additional bands.
The Music & Entertainment Division is in contact with other city employees about the possibility of rolling out similar programs in other divisions — such as those dealing with small businesses, culture and arts — and committed to sharing data as it comes out. The city intends to release a final, public report outlining the pilot program outcomes.
City employees put the members of the 10 bands involved in the pilot in touch with each other to share best practices for the devices. They also encourage employees in other cities considering this type of program to reach out for discussions about best practices for program implementation. Khan said cities that have shown interest in the concept include New Orleans, San Antonio and Nashville, TN.
"It is something we're seeing more and more. It's a nice way as a city to... support bands without giving a stipend," he said. "Here's a way [users] can earn a lot more donations or tips, a lot more income... It's a gift that keeps on giving."
