You’ve probably heard about the anti-tipping movement that’s causing controversy in restaurants and bars across the country.
If you haven’t, here’s everything you need to know.
A movement to eliminate tipping practices is gaining popularity in some of the country’s best restaurants. However, it comes layered with argument, shots fired from both corners.
The question of “how much should I tip?” has hovered at the end of our meals since the early 20th century. Bar and restaurant tipping guidelines are instilled in us from a young age, and gratuity is a large part of the way the American hospitality industry works. But this industry has struggled with minimum wage issues for years, and now people are questioning whether or not our model is the right one.
So, what’s this movement to ban tipping all about?
Let’s find out.
Believe it or not, when it first originated in the U.S., tipping was frowned upon and considered undemocratic. After repeated efforts to reject gratuity practices, they slowly transformed into an industry custom, but now some opinions are coming full circle.
Advocates of the no-tipping movement claim that restaurant economics are broken, and that the elimination of tipping would be better for both customers and employees. Rather than allowing patrons to tip only the front-of-house staff, they’re now building gratuity into the menu to develop fair wages for all employees.
Here’s a quick video that explains the argument against tipping.
The pioneers of this movement are San Francisco and New York City, and, more specifically, one of New York’s well-known restauranteurs, Danny Meyer. Meyer’s company, Union Square Hospitality Group, owns a variety of establishments, from the high-end Gramercy Tavern to the Shake Shack empire.
Meyer claims that tipping is unfair to some staff and the elimination of it will stop unjust issues like unfair wages, racial discrimination, and sexual harassment in tipping. Meyer also claims that providing good service should be expected as part of the job. “It’s troubled me for 21 years that the tipping system is antithetical to creating a real profession for people who take their jobs seriously,” he told The Telegraph. “You don’t tip your doctor if they do a good job. You don’t tip the airline pilot if the plane lands.”
To maintain a form of feedback and be able to reward his staff through raises and promotions (rather than tips), Meyer plans to offer an online rating system.
With New York State raising the minimum wage to $15 by 2018, some establishments are abandoning traditional tipping guidelines to help manage labor costs (with a fair wage for all employees, particularly back-of-house) and attract talented staffers with the promise of a consistent wage.
Several of New York’s Michelin-starred restaurants are following, adopting these “service included” models: Eleven Madison Park, Per Se, Masa, and The Chef’s Table at Brooklyn Fare.
A spokesperson from Masa said that adopting a no-tipping policy will allow the restaurant to “maintain talent across the board” and provide its employees with “a more consistent and reliable paycheck.”
“Reflecting the Japanese custom, exceptional hospitality is an integral part of the Masa dining experience and is provided to every guest.”
But, of course, these high-end restaurants are hardly reflective of the average American establishment—they can afford to experiment while still running a successful bar or restaurant. And the raising of both employee wages and menu prices through built-in gratuity leads us to ask the question, “How much will everything cost now?”
Not surprisingly, a large majority of customers and industry employees don’t want restaurants to adopt no-tipping policies.
This argument is backed by several claims:
According to Horizon Media’s Finger on the Pulse Survey, the majority of American consumers aren’t ready to accept tipping bans across the country. However, the study states, Millennials and Gen Z consumers are more open to change.
With tipping averages and the cost of dining out so high, it’s no surprise people are rejecting the idea that they’re paying more for their meals, even if gratuity-included menus do end up costing the same. New York City is currently ranked highest in the country, at $48, for average meal prices when dining out. Boston is close behind at $43. Many owners are afraid that raising menu prices to include tipping will scare away customers.
It’s also been said that most consumers identify tipping practices as their right to pay a fair amount for the service they believe they receive. And it’s understandable that people aren’t yet fond of the idea of someone taking this away.
And as for the servers, those who currently earn a good wage from tips aren’t ready to give up that income for the promise of $15 an hour—it may be a steady wage, but some say it just can’t beat the tips.
The reality is that the majority of employees in the food and beverage industry rely on tips to survive. And until each state implements an acceptable living wage, just as New York is doing, this will likely continue as the reality.
Some argue this is not a sustainable model for an industry to rely on, and, from an economic standpoint, business owners should be able to afford to pay their staff instead of expecting customers to pay staff for them. “This faulty business model continues to achieve the illusion of sustainability, when this is not the case,” says bartender Erick Castro.
But how should an owner be expected to turn their business on its head after so many years of operating under this model? Well, at least for now, bars and restaurants around the country have no need to worry. The anti-tipping movement is gaining traction, yes, but it’s a slow progression that, for now, is only being adopted by high-class restaurants who can afford to experiment.
Regardless, it’s an interesting industry move that we’ll be watching closely. Check back with BevSpot as the story progresses!
What do you think? Can a balance be found between a better minimum wage and optional gratuity? Or are you firmly planted on one side of the argument?
Want to know more? Head to our restaurant and bar industry news page for the latest stories.
There’s also a really great Freakonomics podcast about this, which has some fascinating stats associated with current tipping practices, and how “fair” they really are. Worth a listen…
I worked banquets for years and then the companies started taking a percentage for the back of the house. After they raised the percentage, they started taking some of the “Service Charge” and giving it to managers. Then, they started taking more and giving some to Sales people. After a short period of time they no longer gave money to the back of the house and they were taking 10% out of a 20% “Service Charge”. I stopped doing banquets because of this. Now most banquet departments pay their staff a set hourly rate with no tips and the wages are much lower than they used to be. The same will happen with restaurants if tipping is eliminated. Have you been to a banquet lately? The service is pretty mediocre.