Tip-Free

I came across an interesting article the other day about Danny Meyer's restaurant group, Union Square Hospitality Group, doing away with tipping in their restaurants. It isn't a short article, but it tackled the topic from a few angles. Europeans already have a tip-free culture but waiters and waitresses in the States depend heavily on the reward system of tipping to supplement their meager hourly wages. Mr. Meyer's group is attempting to change the way Americans look at the restaurant industry. 

Their arguments for a tip-free system include:

• Increased pay for chefs and line cooks who do not have the opportunity to benefit from a tipping system. Minimum wage rates in New York, where USHG is located, will soon mean that a cook at a fast food restaurant may earn a higher hourly wage than current line cooks at high end restaurants. It surely takes more skill and know-how to prepare house-made pasta than it does to toss a frozen patty into a microwave. The ability to increase their hourly rates will help with recruitment and retention of talented chefs. Of
• Stabilized wages for wait staff so that shift-envy becomes less important: you are more likely to earn more tips on a Saturday dinner shift than a Wednesday lunch shift. Eliminating the dependency on tips would make scheduling staff more fair.
• Eliminate the ability of patrons to determine the overall wait staff wages. This may seem odd to some, as many people see leaving a tip as a way to reward exceptional attention and punish mediocre service. Their thought here is that it really isn't fair for a server to essentially have 50 "bosses" a shift (or however many people she waits on that day) that determine their take home pay instead of one boss who is able to set wages and issue raises based off of seniority, experience and overall merit and performance. A patron having a bad day or one who has personal thoughts about tipping that go against the norm has the ability to affect their server's livelihood in a way that isn't accepted in most other service industry jobs. They pointed out in the article that often a patron has consumed alcohol prior to signing their check: would you want your boss to be tipsy when they decide how much to pay you? As an alternative way for customers to provide feedback Danny Meyer talks about creating a type of interface for information to be gathered. So essentially a survey for people to fill out. This way they can express compliments or concerns about their service/experience, but not in a way that directly punishes the server. 
• No-tipping is a way  to hold the restaurants accountable for paying their employees instead of relying on their customers to supplement pay checks. While I don't think that it was mentioned in the article, and I have never personally worked as a waitress, I would think that this would increase the amount of taxed income for service industry workers too. I assume it is easy enough to pocket cash tips without noting them and therefore not paying any income tax on that amount. So, in theory, this tip-free system will benefit the government as well. 

USHG is rolling this new system out slowly, starting with just one of their thirteen eateries, but has intentions of swapping all thirteen over by the end of 2016. As a very obvious way of eliminating tips, they are removing the line on the receipt for a customer to fill in. Of course cash can still be left, but it is being highly discouraged.

I thought it was a very intriguing article and that this will lead to a slow but steady transition for many restaurants nationwide to follow suit. There will be push back and resistance I feel sure, but if the larger picture is considered, it seems to me that the arguments for a tip-free culture make a lot of sense. Something to chew on.