Momofuku Ko, a restaurant in the East Village in New York City, is letting go of its no-tipping model after four years. The service-included pricing will end on July 1, according to Eater.
Ko first instated service-included pricing in order to provide equitable wages for the servers and the back-of-the-house workers. However, Ko is turning back to tipping in order to become more competitive in its hiring.
James Parry, the vice president of operations at the group, told Eater hiring front-of-the-house workers has been challenging because of the no-tipping model. In 2018, when it went into effect, the service staff had a complete turnover.
To prepare for the July change, Ko upped back-of-the house wages by 15 percent to $25/hour. Parry told Eater the change helped bring in more workers.
Prices of food will stay the same, but that isn’t the reality for many restaurant goers who will now leave a gratuity in the wake of the change. According to Eater, the set menu will stay at $280, but after tax and tip will amount to $361.
Ko isn’t the first New York restaurant to ditch service-included pricing. Eleven Madison Park went back to tipping after years of using the model. They cited similar reasons for bringing back gratuity as Ko—staffing shortages.
Marguerite Mariscal, a chief executive at Ko, noted to Eater eliminating tips never really achieved what it set out to do. Parry said it did little to close the gap between lower-paid cooks and higher-paid servers.
Mariscal added she believes a tip inclusive model for all restaurants would work the best, but New York’s minimum wage makes that difficult.
The majority of city workers are required to earn a minimum wage of at least $15 per hour. Tipped workers can be paid $10 per given gratuities make up the difference (the so-labeled tip credit).
Ko’s a la carte bar room (dishes run $7–$60, per Eater) will get rid of the service-included system, too.
As a whole, Ko expanded benefits to include 16 weeks of parental leave, four-day work schedules, and is considering sabbaticals, per Eater.
