FSR Readers Weigh In on Danny Meyer’s No-Tipping Decision

Danny Meyer recently announced that he will no longer allow tipping at any of his 13 restaurants.
Danny Meyer recently announced that he will no longer allow tipping at any of his 13 restaurants. Image Used with Permission

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



Tipping needs to stay! Owners need to pay a "fair" wage to solicite great help but the acknowledgement of a really good tip after you have serviced your patron is icing on the cake. For those who do it extremely well, pay them a little more and have them train/mentor the new hires. Create a culture of "excellence" in serving

Certainly takes the finesse out of the profession....tipping is the true measure that you executed to the last minute. Tipping ensures engagement with the guests, repeat business and builds character within the staff. Culture is the governing hand of all restaurants ....if you eliminate service standards and replace that with a participation wage....big mistake in the long run. You can't buy professional service help.

Theodore Barber, President Theodore Barber & Co., Food Service Consultant

T.I.P.S  To Insure Proper Service  R.I.P. 

I hope we aren't looking at R.I.P.

There is definitely a disparity between front and back of the house.  It's easy to recruit servers and bartenders, and far more difficult to recruit  kitchen positions. One way to avoid increasing menu prices is to pay servers minimum wage and collect a service charge, which the house gets to keep and redistribute in a more equitable fashion.  Customers don't like to feel obligated to pay a straight percentage, such as 20%, but you can always adjust it and keep the customer happy.  Since the service charge belongs to the house you don't have to redistribute 100% of the service charge.  The house can keep a percentage to cover the expense of tracking and collecting the service charge, i.e.,.the credit card discount fee which we all pay now for waitstaff.  Most of the banquet/function world already works this way.

Service personnel are the face of any operation...reducing their net income can have dire results that owners/managers won't feel until it is too late.  There has always been huge inequities between front of house and back of house workers.  The wait person that carries the plate from the kitchen staging counter &  delivering it to the patron can easily earn 5 times per hour than the person that actually created that dish. Correcting this on the backs of service personnel is a mistake.  This is an  industry that typically does not provide benefits, pays a little over minimum wage, fights politically to squash legislation to raise the minimum and yet I still read some many comments below that writers believe that eliminating tips will help to create a "this is a career not a temporary job" atmosphere in their operation.  It may  simply be  semantics but maybe the whole structure could be re-evaluated by positioning incentive earnings (tips) into a commission structure -- may have positive tax implications for owners as well.   

John Parmelee/ SUNY PlattsburghMeasuring the financial impact of this change in practice not only relates to wage cost increase but also the potential  impact on the revenue stream for a restaurant operation. The incentive for servers to up sell customers when taking orders could be compromised without the gratuity in place..... No more fries with that, or Absolute instead of bar pour could have a significant impact over time in actual revenue generated.

Fact of the matter is that most people don't adjust their tips for varying levels of service.  Studies show that on average, a person's standard tip percentage moves about 2% in one direction or the other based on perceived service quality.  If you run a restaurant, you also know that the best servers don't even look at their tips until the end of their shift--they just do the best job they can with each table and play the long game. So if customers don't really adjust their tip percentages, and servers don't vary their effort toward good service based on what tip they think they'll get, then the argument that service quality is related to tipping is wobbly at best.Think about it this way--the kitchen doesn't work for tips, but in well-run operations, the cooks do the very best they can with each plate.  So are servers a different form of creature that can only be motivated by having a part of their compensation determined by the customer?  Tipping is a feudal compensation system that the rest of the civilized world discarded a long time ago.  It's time for us to do the same.

I adjust my tips based on service. They missed me on that survey.

Agree wholeheartedly with Ted. Fortune favors the bold.

My question is how do you make it fair? Bob is use to making $700 a week in tips and Tom working next to him, working the same hours & number of tables only makes $300. How are you going to tell Bob and Tom they now have to make only $8 an hour?

Don, you asked a rhetorical question)  how do you tell Bob and Tom that they now are making $8.00 an hour?  You tell them standing by the door making it easier for them to immediately walk out  and hopefully they wont hurt you as they leave.  

Danny Meyer, based on his interest in Shake Shack alone, has a net worth that grew by almost $400 million dollars this year.   Wouldn't this be a much more serious conversation about treating the profession as a real career if we were reading an article about how Meyer makes it a standard practice to offer all employees an equity stake in their operation after a probationary period?  Wouldn't that be the great equalizer in the whole debate?   The restaurant business is so fickle.  Successes can be spectacular, but failures equally so.  Much like many other startups, the industry would be much more attractive to all layers of the team if there was a real opportunity for the sweat equity to truly pay off down the line.  

stupid, stupid, stupid, been involved with the hospitality industry for over 50 years in three countries and this is not new; but it is the height of stupidity EVERY company I know of that has tried this either regretted it and changed back or went bust. Apart from discouraging effort and hard work, it is a perfect vehicle for managers and owners to cheat the staff!!

I totally agree with Mr. Maffucci!

Consider putting a bonus into the budget to reward exemplary employees each month.  That should help keep the motivation for excellence.

How come no one is speaking about the impact to FICA Tip TaxWorkers CompOvertime

I would like to see DM go a step further by providing his hourly employees stock option benefits, much like the one just announced by Tim Cook


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