Danny Meyer—the Guru of Good Service—shook up the restaurant world this week announcing his plans to do away with tipping in all thirteen full-service restaurants in the Union Square Hospitality Group by the end of 2016. He refers to this new policy compassionately as “Hospitality Included” and when implemented it will entail significantly raising menu prices to subsidize staff salaries in a way that will result in greater income equality between kitchen staff and front of house. We admire this courageous decision and share Mr. Meyer’s core belief that we are an industry in need of reform. But before we go giving each other high fives, it’s worth examining closer what might happen as a result of these measures. Regardless of how you feel about the future of tipping, considering the consequences of overhauling how restaurant workers are paid will give some insight into the future of the restaurant business.
The many opponents of tipping will cheer restaurateurs like Meyer despite the fact that they will probably end up paying the same amount for service—even when they are disappointed with it. Meyer admits that some of his guests may actually pay more than they do now even when you factor in the generous gratuity left to the server. There will be many grey areas in how management chooses to distribute service charges or how they set pay rates among the different positions. Finding a balance in a way that is considered equitable by all “stakeholders”—as Danny likes to call the team—may be a divisive issue no matter how much more money people make. For many servers, the $200-plus tipped dinner shift that made it worth staying at a job might become the $150-minus salaried one that makes it necessary to start getting your resume together.
There is no guarantee that diverting income away from FOH and toward kitchen workers will resolve the issue of attracting and retaining BOH talent. The depressed wages of line cooks are not the only factor in the heavy churn. Young cooks leave restaurant jobs prematurely to pursue experience that can help them start their own projects and, in some cases, more money cannot replace the skills they can acquire somewhere else. Sure, a modest raise in hourly pay will go a long way toward paying kitchen workers more fairly, but whether it attracts more people to cooking as a vocation and/or prevents them from fleeing the industry is a different story. Let there be no confusion: We are unequivocally in favor of anything that results in higher incomes for our hard-working friends behind the line.
Satisfying FOH workers who have been hooked up to the tip I.V. for years will be an even greater challenge for the folks at USHG and other revolutionaries. Cue the bitching about how servers are spoiled, rotten little brats who inevitably complain about their situation regardless. Yes, sometimes they do, but every industry has its divas. The underreported reality is that many highly educated and articulate people who otherwise wouldn’t set foot near a MICROS terminal are attracted to the competitive earning potential of gigs in top restaurants. Let us put it in more direct terms: Sometimes the quality of your server is better than it should be because of tipping. There is a strong likelihood—and USHG knows it—that this demographic may opt out of the talent pool if FOH wages stagnate or drop.
Salary also isn’t the only concern most waiters have. People gravitate toward hospitality jobs for flexible schedules and may resist the demand for full-time commitment that may be expected of full-salaried employees in these new systems. The opportunity currently afforded tipped employees to quickly raise funds through performance-based pay is something that, for many FOHers, makes it all worth it. The sugar high you get from being tipped well makes it much easier to cope with the demoralizing elements of the business—insane hours, psychological abuse, micromanagement. Most of today’s FOH employees have peripheral pursuits outside of their restaurant life and will resist efforts on the part of management to lock them in with a more regimented work schedule and pay structure. While it’s true that service-included policies are geared toward cultivating a new generation of hospitality professionals who exhibit a greater level of commitment to the industry, it is unrealistic to assume that a majority of “amateurs” working in restaurants want to turn pro.
This is to say nothing about how changes in pay may affect the caliber of service you receive when you dine out. Not every restaurant delivers service up to Danny Meyer standards. The tipping culture is designed to stimulate a sense of urgency behind service that many Americans take for granted. It has stood the test of time for a reason. Sometimes it works to motivate the staff to your benefit. While it may not be the most humane system to let the customer determine a server’s salary and not his boss, travel around Europe for awhile—where gratuities, by and large, do not exist—and see how service compares. Imagine a busy New York City bar three-deep on a Saturday night with a salaried bartender presiding. What forces can you expect motivate him to expedite his service? Of course, you will always find people who perform at a high level out of pride. But if you give the mice all the cheese in advance, don’t expect them to be hungry.
Restaurant jobs do not function like nine-to-five jobs. The work load for every shift can differ drastically depending on the day of the week, time of day or even season. Under the current system, the top waiters or most senior staff prefer to be assigned the busiest shifts where they have the opportunity to make the most money. Under a salaried system, that dynamic will likely change (although some restaurateurs like Meyer have suggested “revenue sharing” models to keep staff motivated). Whether you work in the kitchen or on the floor as a server, there will be no incentive to work on busy nights anymore if you are paid salary or weekly shift pay.
It is unrealistic to think that eliminating tips will work everywhere. Restaurants like those operated by USHG and Amanda Cohen’s East Village veggie-centric Dirt Candy (one of the first to experiment with eliminating tipping) have a much greater chance to succeed implementing this formula because they are busy. In the case of USHG, their restaurants are established enough that they have pricing power to move to a menu that has the cost of service (er…hospitality) baked in. But what about restaurants who struggle to fill the seats? Will they be able to subsidize a server’s salary while they wait for revenues to catch up? In the nascent years of a restaurant’s fragile development, it may not have enough milky teats to nourish its entire staff at full salary. Shifting the burden for paying servers onto the customer is probably an important reason why the tipping system has outlasted its critics all these years. This is a fact that is conveniently ignored in the tipping debate: When a restaurant is suffering, the FOH eases the financial burden through it’s artificially depressed wages. You don’t hear too many people heralding their sacrifice in the bad times. Yet, you can be sure they will always be villainized when a restaurant flourishes.
This is not a defense of tipping as much as it is a caveat to those who view this action by Danny Meyer as a messianic act. As brave as we think it is, there will be a long learning curve. We agree that tipping is an arcane convention of the restaurant world that deserves revision. We just know that it’s going to take more than a few drafts to get it right.