Gulliver | Keep your change

A New York restaurateur bans tipping

By B.R.

TIPPING in America is out of control. On that most can agree. The minimum that a waiter in even the greasiest café now expects seems to be 20%. A barman won't pour you a beer for less than a dollar. And Gulliver has rarely been on the end of a more disdainful look than when he gave a Boston taxi driver $40 for a $35 fare and told him to keep the change.

Might there be hope? New York Eaterwrites that Union Square Hospitality, the big restaurant group run by Danny Meyer which owns several well-known New York restaurants, is to ban tipping:

It might seem surprising that Meyer is the guy to be doing away with tipping—more than any of those things, he’s best known for his dedication to hospitality above all else, and tipping is a practice that many see as an essential part of that equation. But this isn’t the first time Union Square Hospitality Group has taken a major business cue from social trends...Meyer banned smoking at Union Square Cafe over a decade before the city put its restaurant-smoking ban into law. So if Meyer thinks we’d all be better off without tipping, he’s probably got a good reason for it.

Mr Meyer says that the current situation is bad for everyone. Diners turn into employers, responsible for setting the pay of the person who serves them. Waiters effectively serve 1,000 bosses. And restaurants lose the ability to use payment as a way to influence staff behaviour, as they would in any other business.

It can also be counterproductive. As we have mentioned before, the idea that tipping ensures good service is questionable. Diners don’t tend to vary their tips, regardless of the service they receive. So to maximise earnings, the best thing for a waiter to do is serve lots of people as quickly as possible. All in all, if the price of the food were also to account for the cost of paying waiters—as it already does with, say, rent, corporation tax and servicing the boss's company car—then everyone would be happier.

In Britain it is common for restaurants simply to add a 12.5% service charge to the bill. Few people quibble about it. (Certainly the service would have to be truly dire for anyone to think of asking for it to be removed.) And many restaurants just add the money to their takings, usually justifying it by saying that it helps the establishment pay higher wages.

Yet although this might sound like just another way to increase the price of a meal to reflect costs, it isn’t. When people see a service charge on the bill, they naturally expect it to go to the person serving them. Unless the restaurant explicitly admits it is heading for its own coffers, it is duping customers. Gulliver always asks whether surcharge goes straight to the staff. But he usually has to read between the lines of the reply, because waiters are often instructed by their bosses not to let on. Unless the answer is a categorical “yes”, then I insist it is removed and leave the cash.

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