Why some New York restaurateurs are looking forward to the end of tipping

http://www.theawl.com/2016/03/after-tipping

by elorant • 10 years ago

35 70 10 years ago

chatmasta3• 10 years ago

Tipping will always exist in some capacity. Unless the service industry blatantly refuses to accept tips (will never happen), wealthier clients will be able to tip, and will do so. If you are the only client that tips, the staff will treat you better than someone who does not.

Anecdotally, I've already seen some of my friends tipping uber drivers in cash. Sure, it's not required. But everyone knows about how Uber drivers are getting constantly screwed over. If you can afford to throw them a little extra cash, why wouldn't you? It makes the driver happy, and it makes you a better customer.

Whether tipping is required or not, it's just a nice thing to do. And if you don't do it, someone else will. Don't be surprised when they get better service than you.

existencebox• 10 years ago

I have to question both that it will always exist, and that it's a nice thing to do.

To the former, there are many occurrences of societies without tipping (Korea?), although this is shifting as western influence progresses.

To the latter, let's look at this as a commons problem: The more people who tip, the less business owners think they need to provide as base salary, eventually tipping becomes assumed to maintain a minimum standard of living as it has for most minimum wage American service jobs. It distorts incentives and muddies the water around providing meaningful minimum wage guidelines.

On top of that it provides a negative customer experience. I have the money to tip. But I'd like not to turn making simple purchases into a "how much do I have to give extra to not have people look at me odd?", a game of "how can I drop this in the tip jar so that they SAW me drop it in" and other really... fake social tendencies that I'm not happy with myself for exhibiting, but I can understand the need for. If I knew I could go somewhere that might have slightly higher base rates, but both treated their employees at a better level AND spared me the social/mental cost of the tipping ecosystem, I'd let my money speak for itself.

chatmasta3• 10 years ago

My mom has been a waitress my entire life, so I feel pretty qualified (if a little biased) to talk about this subject.

She regularly has nights where she makes $300+ in tips. If tips did not exist, the restaurant would presumably pay her minimum wage or something close (as opposed to the "minimum wage with tip" they currently pay). There is no way this would come even close to paying her the same amount that tips do.

From what I've seen, tipping is a far more efficient way of allocating resources (direct from the client to the waitstaff) than employment (client -> restaurant -> waitstaff). Not only is it more efficient, but it encourages waitstaff to build good relations with clients, and vice versa.

Removing tipping removes a fundamentally personal element from the service economy. It hurts the workers by putting less money in their pocket and reducing their economic autonomy. And it hurts the restaurants because, I guarantee you, it will cause them to lose their best waitstaff. Why work for peanuts of a salary when you can make way more in tips?

(Also, tipping is a wonderfully efficient way to discover which customers are not worth being nice to. ;) )

NeutronBoy• 10 years ago

Whether tipping is required or not, it's just a nice thing to do.

In Australia, I tip when a person provides exceptional service to me, and goes above and beyond what you would normally expect them to.

I do not tip them for doing their job.

jamesblonde• 10 years ago

That's the same in most of Europe. I agree with the sentiment that it's the emotional cost of having to not give too little, be seen to given and worst of all having to carry round loads of dollar bills in my pocket. Every time i go to the States, it's stressful thinking where i can get some dollars before i leave the airport. Here in Scandinavia, it's pretty much cashless - we buy gum with credit cards.

danieltillett7• 10 years ago

Tipping is total evil. I want to be charged the price required to pay the staff the amount the business requires to provide the level of service I want. There is not one single legitimate reason for tipping an employee of a business that is not counterproductive to society as a whole [1].

1. You could make an argument that tipping a business could be desirable, but that is a different discussion.

savanaly• 10 years ago

There is not one single legitimate reason for tipping an employee of a business that is not counterproductive to society as a whole

Not necessarily in favor of tipping myself, but I take issue with that statement. The reason that springs to mind immediately is that tipping is a mechanism by which good employees (polite ones, or ones who go above and beyond to provide excellent service) are paid more relative to worse ones. The mechanism is imperfect which is why I don't take this argument as proof of the necessity of tipping, but it's a solid argument.

To put it in academic terms, tipping is a technology that can help an employer solve the principal-agent problem.

maxxxxx3• 10 years ago

Then we should tip DMV employees, cops, firefighters and plumbers too? Also don't forget the cook in the restaurant and border immigration officers at the airport and airline pilots. I am only half facetious. Why only waiters?

danieltillett7• 10 years ago

The reason that springs to mind immediately is that tipping is a mechanism by which good employees (polite ones, or ones who go above and beyond to provide excellent service) are paid more relative to worse ones.

If only that were true. It is not quality of service that drives tipping size, but to put it crudely, hotness.

Even if your statement were true it is for the business to resolve, not the customer. If the level of service provided by the employee does not match the level expected by management then management needs step in and solve. All tipping does is screw up the normal relationship between the employer and the employee.

tacostakohashi• 10 years ago

This doesn't make any sense. Firstly, it's common practice (the norm) for tips to be pooled and split among all staff, so it doesn't, in fact, result in good employees being paid more than worse ones.

Secondly, solving the principal-agent problem is the employer's problem, and they could do that by collecting feedback, paying bonuses, firing people, etc. Punting the whole thing to clients just means that it becomes a lottery based on the client's mood, wealth, expectations, instead of something objective.

aggie• 10 years ago

If tipping was merely a bonus, it might be useful as a mechanism for rewarding extraordinary service. But tips are expected unless there is really terrible service. This is because it has been accepted that in some professions, workers rely on tips for their income to be reasonable for their work.

cowpig2• 10 years ago

I see tipping as just a form of socially-enforced minimum wage. Since businesses are unwilling to pay their employees reasonable salaries, and the government is unwilling to regulate wages, tipping has become a way to make earning a living wage possible for some Americans.

mhurron2• 10 years ago

Since businesses are unwilling to pay their employees reasonable salaries, and the government is unwilling to regulate wages

Except this is not true. The government does regulate a minimum wage. Businesses never want to pay minimum wage so they have to.

But because tipping existed, the restaurant industry was able to carve an exception that if someones tips do not equal up to minimum wage the business will cover the shortfall, but if it exceeds it, the business only has to pay a special lower minimum and the server gets to keep the gratuities.

Either way, your server is guaranteed to make minimum wage.

That people like you exist, who think that they are doing society a good thing, is one thing that keeps this practice alive.

A lot of servers and bar tenders want to keep the special minimum wage + tips setup. Tips are often paid in cash and are much easier to keep off reported income.

loco5niner2• 10 years ago

if someones tips do not equal up to minimum wage the business will cover the shortfall, but if it exceeds it, the business only has to pay a special lower minimum and the server gets to keep the gratuities

Wow. Did not know this.

cowpig2• 10 years ago

You seem to be implying that the current minimum wage system is effective in some way. Try living in any city in the US on minimum wage...

Tips are weakly proportional to rents and other costs of living (restaurants have to charge enough to make a profit, and tips are a % of what they charge). Minimum wage is probably enough to get by if you live outside of a major city, but that is definitely not true inside them.

Businesses will pay whatever the minimum people will work for, which tends to be well below what society at large feels is reasonable. Obviously, because the business' interests are directly at odds with paying the employee a reasonable salary. With tipping, social forces decide what is reasonable, not the businesses.

DrScump• 10 years ago

In what state(s) does this apply? It doesn't in mine.

hanklazard• 10 years ago

As an American, when I'm traveling to other parts of the world where tipping servers isn't the norm, I feel like I have more time to sit and enjoy my food. I can't say for sure that this is related to a tip-based experience or not, but it stands to reason that if a server doesn't benefit financially from getting more volume through his/her tables, he or she will probably be happy to let you sit and enjoy your lunch conversation as long as you'd like. I love it and wish I could have this no-rush dining experience in the States more often.

DamnYuppie3• 10 years ago

Is that a factor of tipping or of the overall traffic in a restaurant?

chrismcb• 10 years ago

I've never been rushed while dining in the States. The main difference is they usually bring the bill in the States without you asking. Abroad you always have to ask. But I would say table turnover is more to the restaurants benefit than the waiter.

hagbardgroup• 10 years ago

"Tips" are another word for "commission." Waitstaff are sales people for restaurants and bars.

Restaurants can certainly try to motivate their sales staff with a wage instead of paying commission, but the consequence will be that their sales people will lose motivation, be less competitive, and less aligned with the interests of customers and more aligned with the interests of management.

piptastic• 10 years ago

I would say tips are another word for "broker fee" then.

If restaurants want to motivate their wait staff, they can pay them an actual commission based on sales if that's the goal.

danieltillett7• 10 years ago

Exactly. This is how sales staff are motivated in all other industries where tipping is not the norm.

jeffwilcox• 10 years ago

What I find interesting is that this article re-iterates that many times credit card processing fees have been entirely or partially subsidized out of the _tipped employee's tip_.

I was recently eating dinner at a French restaurant in Seattle that is working toward introducing a service charge (the current Seattle practice of a fixed service charge, vs raising prices, as consumers don't want to see a $40 steak frites on the menu before tax) and the owners were most concerned with how to fund the credit card fees, since they had not been doing this at all!

Talk about unfair to the workers...

DamnYuppie3• 10 years ago

Can you elaborate on how this charge is passed onto the service staff? I waited tables in college and I don't recall ever being forced to eat the CC service charges. for

vatotemking• 10 years ago

I dont understand tipping. Customers are already paying for the food and service. Why is there a need to tip?

danieltillett7• 10 years ago

The problem is the customer are not paying for the service in the bill. The restaurant pays the waitstaff low or no wages and expects them to earn their wage from the tip. It is nothing more than crude tax avoidance.

chrisabrams• 10 years ago

After spending a few weeks in Europe last year, where tips are not the norm, I realized I LOVE tipping because...people are incentivized to wait on me. Man...not seeing your waiter for 20 minutes sucks.

eric_h2• 10 years ago

I agree with you to some extent. I universally tip well (my baseline is at least 25% largely regardless of the circumstances) and I am rewarded because of it due to preferential service. If service in a given situation is objectively terrible, I'll cut that down to 15%, but the service must be absolutely terrible for me to do that (rude and intentionally unhelpful).

I will never tip 0% because I have worked in the service industry

I tip well because I know that I make ~3-7x what the people in the service industry are making annually and I feel obligated to share the wealth.

lr4444lr• 10 years ago

I still do not see it asked whether the workers themselves want to move away from tipping. Anecdotally I hear that they believe they can make more in the current system by significantly underreporting their income.

danieltillett7• 10 years ago

I don’t think tax avoidance is a good argument for anything. Do we really want to be encourage millions of young workers that avoiding tax is OK?

mindslight• 10 years ago

Um, yes? That millitary-industrial-surveillance complex certainly isn't going to defund itself.

sridca5• 10 years ago

I eat out every day, and always tip the recommended percentage out of nothing more than it being a social norm. There was a period (about a month) wherein I decided not to tip out of principle[1] and it only made me feel guilty. I support the no-tipping movement as it takes the guilt out of what is supposed to be an enjoyable and relaxed experience (dining out).

Although I may end up paying the same (the cost of food will be increased to account for proper wages for the waiters), the main positive difference is the absence of guilt and pressure to stick to a silly social norm.

[1] Reasons: https://www.youtube.com/watch?v=Z-qV9wVGb38

geebee2• 10 years ago

I've been to a restaurant that totally eliminated tipping in SF (Zazie in Cole Valley). They really, truly eliminated it, there isn't even a line for an "extra" tip if you feel like leaving one, and there is an explanation on the bill that they really have done away with tips. The price on the menu is the price they charge (there is still tax, of course).

Honestly, I loved it. It makes me want to go back. Worrying about how much to tip has always been a vaguely unpleasant ritual for me. It's not that I don't want to pay for good food and service, I am more than happy to pay for good service and food, I certainly don't expect anyone to work for free or poor wages. I just really found it refreshing to simply be charged the price that was quoted on the menu.

Unfortunately, eliminating tipping can be complicated, and evidently can also lead to a higher tax bill…

http://www.sfchronicle.com/food/article/Eliminating-tips-bri...

FireBeyond• 10 years ago

"Unfortunately, eliminating tipping can be complicated, and evidently can also lead to a higher tax bill…"

Any time on many forums where this is brought up a cadre of 'service industry staff' will show up and trot out lines about how they are "legally required to pay tax on a certain amount of tips, even if that's not what they make", when the reality is that "if they make less than that they should be able to show it" (and even that's not a perfect science, and still errs on the side of the server) by virtue of bank deposits (you can still keep some cash on the side).

But that "seems like a lot of work" to those people - why should they have to expend effort to document their (lack of) income in order to minimize their expected tax?

Nope... while service industry work is rarely glamorous, it's not that horrific. Unsurprisingly, those same people can often be found mocking people's ideas of tipping - apparently according to them, you should be expecting to tip 25% as a baseline these days... huh.

So if I go to Red Robin and my partner and I have a drink or two, and our bill comes out to about $60, and you have four other tables, all doing something similar, and we are there for about an hour, maybe a little more, you should be picking up $60-75/hr for tips?

Huh.

But "if you tip 15% or less, then I am actually having to pay to serve you because I have to tip out all these people no matter what tips I actually get, and the IRS demands I pay taxes on all these tips even if I make less"...

The reality is there's no requirement like that from the IRS - there's a base expectation, and if you can't provide documentation that you made less, that's what you'll be taxed. I wonder how many of these same servers provide that same documentation when they make -more- than the base?

marklyon• 10 years ago

I'm not going to deal with the paywall, but is the "higher tax bill" the result of "actually paying taxes on your income"? If so, I'm not sympathetic.

geebee2• 10 years ago

I didn't realize there was a paywall.

But based on the above comment, it does appear some of this may be manipulation.

beloch• 10 years ago

You shouldn't necessarily assume that waiters receive a lower base salary than kitchen staff. In some places (e.g. large parts of Canada) minimum wage is minimum wage and, at lower class chain stores, waiters are paid the same hourly wage as kitchen staff: minimum wage. They can easily more than double their earnings with tips but, in most places, tips are not shared with kitchen staff to a significant degree. This means the people who bring your food to you often make a lot more than the people who make your food. This bothers me.

hackuser• 10 years ago

Lots of people here are complaining about tipping. How hard is it for a bunch of software developers to calculate 20% and add it to the bill? How hard is it to understand that it's not a bonus, it's just part of the bill where the customer chooses the amount - giving you a little power and flexibility.

Think of it like Patreon or donating to your favorite FOSS.

This isn't a statement for or against tipping. I don't really care; either way is trivially easy and all that matters is the bottom line.

I do care about labor conditions. I don't believe restaurant owners are doing this to benefit their employees. I wonder how it affects the power relationship between workers and owners, and I especially note that discussion of it rarely includes input from the people who actually do/don't receive the tips.

anotherevan• 10 years ago

Recent Freakonomics podcast interview with Danny Meyer on the same topic. http://freakonomics.com/podcast/danny-meyer/

Why some New York restaurateurs are looking forward to the end of tipping

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