“Hmmm”, was the considered opinion of a member of the waitstaff at Manhattan’s Union Square Cafe last week when asked about working for a set wage, not tips. “It’s good to know how much is coming in”, the staff member later reconsidered. “Not so good if you need to make cash fast.”
A little over 18 months ago, restaurateur Danny Meyer announced that the famed cafe, as well as other full-service restaurants in Meyer’s Union Square Hospitality Group, would phase out tipping, ending a practice that Meyer said has roots in slavery. The news sparked a national discussion on tipping in a country where gratuities have embedded themselves in the national culture.
To date, seven of Meyer’s 14 restaurants have made the transition to ‘hospitality-included’. But in the restaurant business at large, the change has yet to be widely adopted, challenging, as it does, restaurant economics and deeply entrenched conventions of hospitality and service in the US.
Others describe hospitality-included as a well-meaning effort to address longstanding inequalities, including wage disparities between kitchen staff and serves, but say it adds a level of bureaucracy and bookkeeping to businesses already struggling under increasing real estate and wage costs.
Efforts to rid the industry of its tipping habit have been further complicated by the impending raises in the minimum wage in many states, including New York, following a campaign fueled primarily by service industry workers such as food servers. Many restaurants are waiting to see how that plays out on the industry’s stressed economics.
“We found that tipping stood in the way of being able to reward our backhouse staff and our managers”, says Union Square’s Chief Restaurant Officer, Sabato Sagaria. “If we eliminate tipping we can compensate all our workers.”
To accommodate the transition, the group immediately put up prices by 25 per cent, a shock to restaurants less well-supported by the expense account trade. Mr Sagaria says hospitality-included costs brings the restaurant business into line with other, tip-dependent businesses that have been transformed.
“People have seen the convenience with the all-inclusive pricing model of Uber and some of the food-delivery services”, Mr Sagaria says. “Plus customers don’t have to dust off their high school math.” In addition, says Mr Sagaria, “restaurants and waitstaff no longer need to read the appreciation of their performance through tips the group invites diners to direct their comments directly on a card provided with the check.”
Last week, customers said they did not object to hospitality-included since it took the mathematical guesswork out of paying the check but as veterans of waiting tables, they recalled the disappointment of being tipped badly.
Tori Campbell, a publishing executive who previously worked as a waitress, said it was shameful that the restaurant jobs often pay barely enough for workers to survive in a city such as New York. But “waitstaff”, she said, “are often doing it as a means to an end, while the lower-paid kitchen staff are often learning a career trade, so the inequalities are in some senses justifiable. “It’s the system that works, but unless you’ve been in it, it’s hard to understand”, she said.
Some say hospitality-included is a well-meaning effort to address longstanding inequalities, including wage disparities between kitchen staff and servers.
Rival managers say that while everyone would like to pay their staff more, killing the tip doesn’t work under the current model.
Chef Eric Ripert of Le Bernardin told the Daily Meal last year that the “vast majority of my employees prefer tipping and therefore I will not change the policy. The tipping policy is beneficial to everyone in my opinion, including waiters, customers, and owners. Only the government benefits from no tipping.”
Other well-known chefs have experimented with hospitality-included, including New York stars Gabriel Stulman at Fedora and Tom Colicchio at Craft, only to reverse course. Ms Stulman explained to Eater New York he’d have to raise prices or cut wages, neither of which he ‘felt comfortable’ doing.
Mr Sagaria concedes that the transition from a tipping to a no-tip model can be fraught.
There are a lot of subtle nuances that come into play. It requires a big shift, new learning and musculature to operate. But we see the benefits in the long term for our employees, guests and stakeholders. Even the timing makes a difference.
In addition to a set hourly wage, the Union Square group brought in a revenue-share program that’s distributed to the team according to their position and hours worked. “In the past, only the waitstaff was incentivised by sales. This way, everyone is … one team, one goal, and everyone working together to achieve that.”
Another restaurant that has been successful with hospitality included is Dirt Candy on New York’s Lower East Side.
“It’s tough to go against the flow this way, but it’s the only way to pay my staff a fair wage”, says chef and owner Amanda Cohen, who says she decided to get rid of tipping because she needed to pay her back of house higher wages to keep them. “There’s a real staffing crisis in New York with kitchen positions, and I wanted to make sure as many people as possible moved with me and stuck around for a long time, so I wanted to pay a better wage.”
Top tips on tipping around the world
Is 20 per cent really standard when on holiday in the US? What should you give a taxi driver in Spain? Can you just round up a bill in France? Guardian correspondents around the world provide the inside track on what you do, and don’t, have to pay. And yes, we’re rather confused by Austria too …
Last week, Ms Cohen described tipping as ‘a scam’ that New York restaurant owners have developed over the years to hide their actual costs by tacking on this surcharge to their customers and making it seem voluntary but, let’s face it, who’s the jerk who doesn’t tip when they eat out?
At Dirt Candy, pay for front of house staff starts at $25 an hour, and back of house at $15 an hour. Ms Cohen concedes that her servers will never have the “excitement of getting a $400 tip from a drunk customer again”, but nor will they have the disappointment of leaving with $50 during a snowstorm when few customers came in.
“In terms of how it’s working out, I think everyone who actually is affected by it is doing great. My staff loves it, and I have much less turnover than most restaurants my size. And my customers like knowing that the people serving them and making their food are being paid a living wage.”
At the same time, Ms Cohen has received an education in how emotive the tipping debate can be. She’s experienced staff who don’t want to interview because they view it as a scam and customers who view it through the lens of religious intolerance.
Ms Cohen says she’s received an extraordinary quantity of hate email and fake reviews trashing us because of what they perceive as abuse of my staff because I eliminated tipping. “It’s been eye-opening to see how much of this hatred has been antisemitic”.
The issues around tipping and service may not be resolved anytime soon, but Dirt Candy hostess Jackie Carson-Aponte says she is grateful for a regular wage. “It’s a different pace. It may be less exciting because it’s more like a salary but ultimately it helps to create stability.”
