I get it. As someone who writes about the restaurant business, I hear a lot of talk about tipping, minimum wage, compensation, front- and back-of-house disparities and more. So when Danny Meyer made the announcement that he was doing doing away with tips, it made sense to me. After all, it’s not like he’s the first restaurateur to do away with tips. As one of the emerging trends we’ve been following at Restaurant Business, we asked if tipping had reached its tipping point back in January.
From the operator perspective, I think it’s a smart move. Between the tip credit and fair-payment issues, something has to be done to figure out how compensation will work going forward as more regulations are put in place.
When I spoke with Claude Andersen, operations director for Washington, D.C.-based Clyde’s Restaurant Group (Clyde’s, Old Ebbitt Grill and more), he said the biggest unknown for operators like him—who are watching to see what happens before making any moves themselves—was how customers would react. There’s a big difference, he said, in customers being charged a 20 percent service fee and opting to leave a 20 percent tip. The out-of-pocket expense may be the same, but the perception is changed.
The fact that Meyer—the man behind Shake Shack, not to mention 13 restaurants under his Union Square Hospitality Group—made the move away from tips is putting it more in the public eye. Heck, my pop radio station in Chicago had a whole morning section discussing it. And as customers hear about it more and more, chances are acceptance won’t be too far off.
But what about servers? As a former server myself, there are two major problems I foresee if no-tipping policies become more widespread.
Do you lose motivation for non-professional servers?
For those servers looking for a stable income, a switch from the uncertainty of tips to the dependability of a set wage is great. However, not everyone working in a restaurant is in that same financial situation.
I waited my fair share of tables while I was in college. Every summer, I’d come home, work as many shifts as I could (especially on the weekends), and have enough to support myself for the next few months. During my last few years of college, I got a server job near campus to make some extra spending money. I worked two or so nights a week and had enough to live on.
The reason I loved being a server in my student years: it was fast money. And I mean that literally—I made a lot of money in a short time frame. I could go in for a four- or five-hour shift and make at least $100.
What kind of hourly office job available to a student was going to pay more than $20-an-hour to equal that? None. Yes, it would’ve been nice to have nights and weekends free, but if giving up a few hours on the occasional evening meant enough to support my social and dining-out habits, I was all for it.
Take away that big perk—the ability to make a lot quickly—and make compensation closer to the hourly level, and I would’ve jumped to a job with a more stable schedule that didn’t require nights and weekends. How many servers will think the same?
Will hospitality suffer?
When servers know that they are being paid the same no matter what, how will that impact service? It has big implications, said Andersen, who asserted that service sometimes suffered when an 18 percent gratuity was tacked onto the bill of large parties.
This was the topic being discussed on the local KissFM radio station the Monday after Meyer’s announcement. Between songs from Selena Gomez and The Bieber, the DJs were taking call-ins on whether or not restaurant workers think this type of no-tipping policy would decrease the level of hospitality.
The answer was a resounding no. The station spoke with both waitstaff and managers, all of whom thought service would actually be better. Servers wouldn’t be worried about getting stiffed or stressing if they were going to make enough per shift—these unknowns would be removed, so servers could just focus on doing their jobs well without financial instability.
Personally, I’m not sure I agree. Granted, I think good workers will put their best foot forward most of the time in order to keep their jobs. But what’s the motivation to go that extra step? Is every server really going to bust their hump when they know that, no matter what, they will be making a certain hourly wage?
Other concepts who’ve gone the no-tipping route have added an extra payment cushion to answer just that: Ivar’s Salmon House in Seattle provides a sales commission to servers and Dirt Candy splits 10 percent of its quarterly profits with the staff. But not all restaurateurs can or would be willing to do that.
So, I ask again, what’s going to drive waiters and waitresses to go that extra step for guests?