Earlier today, FSR magazine asked readers to share their opinions on Danny Meyer's announcement that he plans to eliminate tipping in his restaurants and increase menu prices to support higher wages. Reader responses have run the gamut, from enthusiastic support to total disdain, along with insights of how a no-tipping policy might impact the industry both positively and negatively.
“I applaud this decision. I have been threatening to make this move in our restaurant for years. Obviously, I have been met with considerable pushback from staff and so we haven’t made the move. I believe that tipping discourages the very team mentality that creates strong hospitality. I also feel that tipping helps to promote the notion that hospitality is not a career. Our society looks at serving as a position you take when you can’t find a career. I believe that if we offered a guaranteed wage and career path, we could recruit better staff for longer periods. As it is, we get young people just out of school until they get a “Real Job,” or while they attend graduate school. My plan has been to add a service fee and eliminate the opportunity to tip. I feel that the money is there to pay our staff what they currently make and some more. We could provide a much better guest experience because the staff would work together as a team more efficiently. … So, I believe it would be a win-win for staff and guest. But it is hard to go against the tide. I do feel that the push to increase minimum wage and new government regulations will continue to pressure tipping. And sooner [rather] than later we will be able to make the change.”
George Huger, Chef/owner, Southern Inn Restaurant, Lexington, Virginia
“Stupid. Never happen.”
Bruce Taylor, Owner, Taylor’s Steakhouse, Los Angeles
“This seems like a cutting edge move, but with the labor wage increases, you could feel it coming. My biggest concern is that service may slip in places where this new wage occurs, because the server no longer has an investment to provide top-notch service. I've always felt that chef/owners or chef/managers provided the best food, due to their longer-term investment. This new policy will require more policing of the service staff [another added cost] as their income is no longer at stake, and hence allow them to be less concerned about the overall guest experience.”
Harvey Singer, Director-Corporate Accounts, CHEF WORKS
“Serving in the hospitality industry has always been one of the purest forms of capitalism and is a great training platform for how to succeed in any career path you choose in life. A different philosophy like [no tipping] would [cause workers] to think much differently about success. This would be a game changer [in a bad way]. … And it's all in the name of fair wages for all employees in the hospitality world. This works very well in Europe where the majority of society is socialist in nature. At first look, the obvious problems with this philosophy are [that it] dis-incentivizes good service and creates a more complacent, lackluster service platform … It also goes hand-in-hand with the “everybody gets a trophy mentality,” which is downright un-American. … But let's call it for what it really is: It's just a giant money grab for the state and federal government. For years, half the tip money that servers make goes completely [untracked] … So this conveniently becomes a way for the government to see every cent of revenue coming to a restaurant, and now they get to tax everyone on everything, so who are the real winners here? The government.”
Rob Maffucci, Chef/owner and Entrepreneur, Vito's Restaurants
"Raising menu prices to compensate for server and other front-of-the-house wages would push menu prices into outrageous territory. With rising prices of food and beverage products, restaurateurs are forced to be very frugal and cost efficient in every aspect. In my current situation, people complain about the prices, and I am in a country club type of environment. My pricing structure is far below what a free-standing restaurant would charge for the same items. While I like the idea [of no tipping] and I know others have tried this in the past, like Charlie Trotter for example, I think the culture in this country is to [pay] tips based upon the quality of service received. I believe the servers will try harder and be more attentive when they have to always rely on tips as a major part of their income. If servers just collect a paycheck, there is not the incentive to perform at a higher level. As a chef, I really dislike going into a restaurant and seeing outrageous prices for things that should be more reasonably priced. I understand that each individual restaurant is surviving under very small margins, however, you need to think about the financial approachability of your establishment. It would be simple and clean to be able to raise menu prices to eliminate a service charge or tip. What is that number and does it make sense to a customer to pay that price for that dinner with that level of service? The only industry unaffected by such menu increases would be the fast-food industry.”
Charles Weber, Executive Chef, Adelina’s Bistro at the Monarch Club, Nipomo, California
"I think in the long run both tipped employees and small business will lose out. With the tip system, there is potential for greater money [to be] earned by way of larger tips. The new system eliminates that. Customers will not feel obligated to leave an additional tip. Without getting into legalities, hourly wages will be 100 percent taxed; we know its common that not all tips are currently declared. Not all foodservice/bar workers are full-time and many are in it to pick up extra cash. I feel we will lose part of that demographic. In establishments that are Union, I don’t think the Unions will allow the new system to happen. They are the employee advocates. If workers are getting a higher wage, workers won’t necessarily feel the need to be in a Union or pay the Union Dues. Small business owners will obviously have a hard time paying higher rates and [the] payroll taxes that go with it. It will be yet another hit for small business after the Affordable Care Act."
Jeff Isaacson, Ark Restaurants, New York City
“Funny, heard that on the news this morning. Two weeks ago I was playing it out on paper, though I've been considering it for years. Being seasonal, I can't afford to pay my kitchen crew more than $12/hr. If I went total communist, every one from the dishwasher to the maitre d' would make $18/hr. I'm very excited that Meyer is making a go at it. If there's anyone that can set an example for the rest of us, it's DM. Can't wait to hear how it rolls. I could go on and on, but gotta get day crew off the clock. Thanks for asking.”
Ken Gordon, Chef/owner, The Gamekeeper, Blowing Rock, North Carolina
“I think it is a good idea. Labor rules are only getting more and more complex. Employees that receive tips as a significant portion of their compensation present challenges to government regulators. It also brings all restaurant workers to a more equal compensation level. Being in the fast-casual segment and not having tipped employees, I welcome the change, which would allow companies like [ours] to raise prices to cover increased cost. There will result a larger spread between my price and a full-service operator, that has raised its prices to offset the loss of tips. In the end, it will be positive for all in the industry—except for tipped servers, who have been over-compensated compared to their co-workers.”
Shelby Collier, President, Beyond Bread, Tucson, Arizona
“Eliminating tipping is a bold move, but it makes sense in terms of how it will assist restaurants to recruit good culinary staff. The real talent can be difficult to attract, and by including them in the “tip distribution,” it will definitely serve to entice and keep them. One of the downsides is that service quality could potentially drop, as the motivation to provide great service is less apparent. Professional waiters take pride in their ability to provide exceptional service. The reward is quantified by the amount of the tip, with this eliminated would we see decrease in personal pride? Additionally, customers in America are value-driven and like to make their own decisions as to how to reward value and quality. They adjust their tips for both good and bad service, so they may object to having the gratuity included in the bill. Also, with the rising cost of food and utilities already being passed on to guests through menu prices, this may not be the ideal time to add another factor that will increase the pricing, and it may further put off customers. While this is already in place and working in many European countries, I think that a major shift in mindset will have to take place with both staff and customers in America in order for this to become more widely accepted.”
Mark Sapienza, Executive Chef, The Langham, Boston
“I applaud the leadership and vision of Mr. Meyer, and support his decision to eliminate tipping in his restaurants wholeheartedly. Balancing wages for front- and back-of-house employees has long been a challenge for restaurateurs, and this policy will help restaurant owners to redistribute dollars to everyone on the team who works tirelessly to create an outstanding guest experience. I hope Mr. Meyer's new policy ignites an industry-wide shift in the hospitality industry overall, and one [it is one] we hope to follow."
Sherry Villanueva, Managing Partner, Acme Hospitality