Reaction to No-Tipping Policy at Union Square Hospitality Group Restaurants


FSR readers continue to share impassioned opinions about the announcement from Danny Meyer that he plans to eliminate tipping in his restaurants and increase menu prices to support higher wages:

“We operate three very high-volume full-serve units (total of 1,500 seats), and with Seattle going to a staggered minimum pay increase we decided to take everyone to $15.00, and we allocate 8 percent of sales as the tip pool and it goes to all employees evenly based on hours. We raised our prices 21 percent to make this happen. It has been in place for 5 months and is working. We have found some guests will tip additionally. I think Danny will do just fine, and it is about time we stopped tipping in this country…the key is balance between the front and back of the house; it has never been fair.”

Harry Roberts, Ivar’s Seafood, Seattle

“Brilliant move by a brilliant guy. It directly addresses the industry’s most pressing issue—retaining great kitchen talent. Most restaurateurs would balk at raising menu prices, but it will work for Danny Meyer because he has built so much equity in these restaurants. Plus, he is getting a lot of buzz from being the first to do this which will help his business.”

Peter Nolan, Chief Brand Officer, Roti Modern Mediterranean, Chicago

“The move towards a no-tipped model is still somewhat of a bourgeoning concept within the industry. I wouldn’t call it a trend as only a handful of restaurants across the country have implemented this system—usually in the fine-dining segment in more urban areas. With over 1 million restaurants across numerous segments, what might work for one restaurant may not work for another. In an industry as fast paced and ever-evolving as the restaurant industry, America’s restaurateurs should continue to have the freedom to do what what’s best for their business and their workforce.”

Christin Fernandez, Director, Media Relations & Public Affairs, National Restaurant Association, Washington, D.C.

“I do not feel it would be in the best interest of the restaurant patrons to eliminate tipping. Neither will it be in the best interest of the small, independent restaurants. Our costs are high enough as it is, and we are continually having difficulty competing with the large chain restaurants that can absorb the costs a little easier. At the end of the day, the restaurant patrons are bearing the brunt of the cost whether in the tip or in the cost of their meals. Regarding the service, we have been in business for the past 22 years in the same location. We have seen many servers come and go. The days of the "career server" are gone. What restaurants are left with nowadays are students paying their way through college. They're here today; gone tomorrow. Without the incentive of tips based on their level of service, I feel the restaurant patron will not get the best service they deserve because there is no incentive on the part of the server to go above and beyond for that guest. When their income is directly affected by their level of service, the guest will have a better dining experience whether it be in a small mom and pop shop like ours or a large chain restaurant. People work hard for their money and deserve to be treated well.”

A. John Aouad, Owner/Master Chef, Osta's Lebanese Cuisine, Grand Rapids, Michigan

“I'm going to be meeting with Danny Meyer and other folks on Monday to discuss ending tipped wages. I am very much on board and want to see this happen.”

Andy Shallal, Owner, Busboys and Poets, Washington, D.C.

“Wait staff prefer tips over [a] wage increase. Their best waiters will leave; quality of service will diminish.”

Steven Carroll, Director of HR/Training, Hooters of New England/NY

“A great move forward for a big restaurant group but I worry that our customers (we are a small, single-location restaurant) would be faced with sticker shock if we were to raise our prices enough to offset the payroll increase.”

Sasha Miranda, Miranda Restaurant, Brooklyn, New York

“In the short-run, sometimes it’s pioneers who take the arrows, as the top earners under the existing system are candidates for changing employers. Our concept is full-service cinema dining. For us there may be applicability of either Danny Meyer’s approach or a separately stated service charge—not because the tipping system creates inequalities among different positions (we pay our starting cooks market wages with further merit increases above market), but because a significant portion of our patrons don’t understand that our service staff lives on gratuities.”

Allan L. Reagan, President and Chief Enthusiasm Officer, FLIX Entertainment Group (Flix Brewhouse), Round Rock, Texas

“Something has to change to make it possible for independent restaurants to survive. When you combine the addition of line items in restaurant P&Ls like Open Table, mandatory sick time, and crackdowns by the DOL and DOR—restaurant margins keep shrinking. In addition, when sales are almost 100 percent credit card taking about 3 percent off the top hurts as well. In the end of the day, most chefs that I speak with want to increase pay for the kitchen team, but there is very little money after operations to give raises. It seems to me something has to change, but the specifics need to be worked out in a way that allows owners to make an informed decision on which way to go when laws vary from state to state. I think that a service fee to the guest makes more sense than raising menu prices because the guests’ price perspective is way behind the increase in ingredient [costs] that we have seen over the past 6-10 years. Combining a profit sharing system that is based on performance and longevity in the job might allow service not to suffer and encourage employees to excel and also progress in their career.”

Jeffrey P. Fournier, Chef / Owner, 51 Lincoln / Waban Kitchen, Newton Highlands, Massachusetts



The pay inequity between FOH and BOH has been a part of this industry since I began in 1974 as a dishwasher. I tried being a server and bartender at one point of my career. I didn't enjoy it or have a passion to do it. My passion is in the kitchen. Yes, the pay was at times awful, but if you put in your time and effort, you will grow into sous chef and chef positions. I do not think that every restaurant can afford to get rid of tipping and increasing their menus prices by 21% to accomplish this. My understanding is that those who have gone this route have done so by increasing the menu prices by 20-25%. The second issue is that it takes away the incentive for many servers. How does a server who puts great effort in and currently averages $30-$50 an hour feel about going to $15 per hour and a pool of whatever percent that the house is offering? Thanks, Tom Siders Executive Chef, Hopkinton Country Club, Hopkinton, MA

Some great positives and negatives have been brought up in this line of feedback. As an owner of 3 smaller restaurants, I am petrified of the financial burden that a major increase in the minimum wage will bring, while completely agreeing and understanding that some qualified folks should be better compensated, but not everyone. I think it's great to see a leader in our industry at least giving this a chance. I think our greatest wish should be that Danny or his people share the information with the rest of us once they can ascertain whether this is a success or a failure. There is no question that top servers will jump ship and that his kitchen team will be a much more motivated bunch. In our business we teeter on a fence top with most of the decisions that we make. Let us be thankful that someone was willing to "take the arrows" and lead the charge. Hopefully we will be able to make a more educated decision as to whether we do or do not follow in Danny's footsteps in the future.
Andy Fox, owner, AWE Hospitality, Knoxville, TN


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