The shift has started and, like clockwork, hospitality is beginning to roll with Danny Meyer after he rocked the industry in October of last year with plans to eliminate tipping across his 13 New York Union Square Hospitality restaurants.
Since Meyer's announcement, the shift has officially begun. As evident in its steady climb to 20-plus NYC restaurants, tip elimination has become more operationally prevalent and instinctually motivating as current no-tipping locations and, in time, the thousands of impending restaurants to follow will begin to echo the same rallying cry: preservation.
As far back as 1994, and I kid you not, Danny Meyer has promoted the elimination of tipping, as evident in a well-documented Union Square Cafe newsletter. At the time, the no-tipping discussion revolved around curbing the volatility of commission for front of house staff. Here is an excerpt from this newsletter:
‘The American system of tipping is awkward for all parties involved: restaurant patrons are expected to have the expertise to motivate and properly remunerate service professionals; servers are expected to please up to 1,000 different employers (for most of us, one boss is enough!); and restaurateurs surrender their use of compensation as an appropriate tool to reward merit and promote excellence … Imagine, if to prompt better service from your shoe salesman, you had to tip on the cost of your shoes, factoring in your perception of his shoe knowledge and the number of trips he took to the stockroom in search of your size. As a customer, isn’t it less complicated that the service he performs is included in the price of your shoes?’
There you have it.
Fast forward to 2016 and the discussion surrounding no-tipping has evolved and the rest of the industry has finally smelled the coffee, read the newsletter, or what have you. More compelling than the 'awkwardness' or 'complication' associated with no-tipping, as referenced by Meyer in years past, is now compounded by forces more pervasive: the rise in minimum wage, the widening pay disparity between front and back of house, and the shortage of artfully talented cooks.
With the advent of the New Year comes comes a roughly 50% increase in the 'tipped minimum' for front of house wait staff, rising from an average of $5 to $7.50 (keep in mind: waiters will also be earning an additional $30,000 - $40,000 on average in tips, and for many, much more). Inversely, however, cooks will not reap the same gracious benefits. In fact, only a twenty-five cents pay increase from $8.50 to a cool $9 will be awarded to cooks. Come again, right?
More so than ever before, the pay disparity between the kitchen and the dining room has reached a new height and does not plan to temper as minimum wage will predictably rise to $15 by 2018 for front of house staff, that is. Not cooks. In fact, in 2015, restaurant operators, including Danny Meyer, have attested to the shortage of talented cooks for hire and an even lower amount of cooks settling in New York City as their career platform due to high costs of living.
All in all, extreme internal disparity between staff is problematic, especially under the imbalanced compensation levels inherent in hospitality. So how is this issue resolved? Well, no-tipping, for starters, but how else? Where do we find stability amidst the imbalance? Currently, outside of no-tipping, new and creative ways of mitigating disparity include higher staff salaries, revenue sharing among staff, and lastly, higher menu prices.
The general acceptance and success of this shift boils down to the goodwill of customers and their propensity to skew towards social responsibility. To be part of the journey. To save cooks. To save hospitality. To preserve.
While no-tipping resolutions through increased salary and revenue sharing resolve more internal issues, a rising tide lifts all boats in this scenario, including the added cost passed along to customers in the form of higher prices. However, coupled with higher prices will be, and what Danny Meyer so intuitively acknowledges, is the additional social and psychological cost to the customer: the loss of the tip as a tool to exercise power and control.
In an October Eater article where Editor Ryan Sutton interviews Meyer about his no-tipping decision in its entirety, Meyer imagined a customer complaining and realizing:
"I no longer believe I have a sword to punish a waiter with, or a pat on the back to praise with."
In an environment void of tipping and with incremental pricing costs of 20% or higher placed upon the customer in no-tipping restaurants, customer feedback becomes an invaluable substitution.
Preservation. The customer resolution comes next as the final component to balance the scales once and for all in the no-tipping shift. In this same interview, Meyer continued imagining a system where diners still could share their opinion on the service and the meal, but it would be communicated through a more precise language than cash:
"What if we could retain the consumer’s ability to praise or punish or just remark, and make it a fun game? Then I think we could actually accelerate the sense that this is the future, and we didn’t take away your ability to remark about the experience in real time." Furthermore, Danny elaborated that an online feedback system "would give us all kinds of data. Today, if you leave a bad tip, I probably don’t even know about it." But with mobile payments and experience-specific feedback, "I can follow up and say ‘Help us get better,’ or ‘Let me refund some of your money.’"
Finally, the loop gets closed.
Admittedly, Danny expressed no plans to create this platform for himself and it wouldn’t be required as the need is currently being satisfied in the space today.
In the transition to no-tipping, in its bold, imperative, and ever admirable pursuit of balance and preservation, hospitality will be included. And through Tattle, feedback can now be requested.