Maybe Tipping is a City in China Afterall

A lot has been written recently on the notion of tipping in restaurants. Should it stay or should it go? A few big names took to Twitter two months ago in an open discussion on the matter. There, Danny Meyer wrote that he "Considered eliminating tipping years ago," but didn't at his servers' request. David Chang also tweeted that he was "kicking around the idea at Momofuku of figuring out how to increase prices removing tips w/o revolt." In lieu of a review today, Pete Wells addresses the same question, Leaving a Tip: A Custom in Need of Changing?

Wells suggests three techniques for those seeking better service in restaurants: "1. Become very famous; 2. Spend $1,000 or more on wine every time you go out; 3. Keep going to the same restaurant until you get V.I.P. treatment; if that doesn’t work, pick another place." The critic goes on to explain his approach to tipping, but ultimately has this to say: "I could go on against tipping, but let’s leave it at this: it is irrational, outdated, ineffective, confusing, prone to abuse and sometimes discriminatory." But Wells also looks to adjust the system in a manner that would benefit both diner and server, "The people who take care of us in restaurants deserve a better system, and so do we."

There is a lot to be considered if the tradition of tipping is removed from restaurants. Servers are individuals, and they bring their personalities to the experience. With that comes their ability to convey the restaurateur's vision in a unique way that is all their own. Menu knowledge and efficiency are other reasons, but this isn't a discussion on whether or not servers deserve tips. However, applying a fixed-rate to every server in New York City is like enforcing a dress code. You take away the server's sense of self, their identity, and the modicum with which they measure their ability to do their job. A server with three weeks experience in a diner knows a great deal less - not just about service, but the industry as a whole - than a veteran server at Peter Luger or Le Grenouille.

Minimum wage for food service workers in New York is $5 an hour. Let's say for example a 30-hour workweek brings in $900. One hundred and fifty of that is hourly wages, making the difference (earned in tips) $750. If tipping is eliminated, $25 needs to be tacked on to the hourly wage to make up for the $750 - making it $30 an hour. That's all well and good (great) for the server, but consider the restaurateur here. If a restaurant employs 10 servers on a given night, and those servers work an 8-hour shift, the house goes from paying $400 to $2,400. In order for a restaurant to make up for the $2,000 difference, and not offend their clientele, it would be an incredibly challenging task.

Tipping allows restaurateurs to open restaurants with less capital. Consider the added cost to open a restaurant if you had to pay servers $20 or $25 an hour. If a restaurant opens and needs to hire 10 servers, that's $50/hour labor cost. If the restaurant has to pay the same 10 servers $20/hour, the hourly wage jumps to $200. The added capital is enough to thwart any reasonable soul from opening a restaurant.

From a servers point-of-view, some shifts are more desirable than others. Senior servers at restaurants earn the best schedules and work the busiest days. What's the incentive to work weekends (the busiest restaurant days) if servers make an hourly wage? In other words, why work twice as hard serving at least double the amount of people on Saturday if you're going to make the same working half as hard on Mondays?

A number of restaurants have abolished tipping and operate with implemented service fees. In New York, Per Se, Atera, and Brooklyn Fare work this way. Our concern with this model is that those restaurants are the type of places you rarely eat at more than once. When it costs two or three hundred dollars a person to eat out, it's easy to take a percentage of that ticket price and bleed it out to the service staff. It's also easy to do when the staff (Per Se excluded) doesn't consist of back waiters, runners, polishers, and baristas - all of whom share in a server's tips on a nightly basis.

Sure, working a service fee/surcharge into a restaurant's business model is an effort to make things consistent. It's subtle and nicely presented, but really no different than servers automatically adding gratuity to every check before they present it to the guest. Let's just make the fine print at the bottom of every menu read, "Gratuity may be added to parties of 1 or more."