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Why tipping needs to be abolished in restaurants

I long for a restaurant that charges me one price, ending all this nonsense about tips and just letting me enjoy my meal. And it seems I’m not alone, writes Vir Sanghvi.

brunch Updated: Nov 29, 2015 11:44 IST
Vir Sanghvi
Vir Sanghvi
Hindustan Times
service charge,Tom Colicchio,Shake Shack
Tips of the trade: Waiters are not idiots. They know which table is likely to leave a large tip. For instance, if you look visibly rich, you will get better service.(Photo: IMAGESBAZAAR)

When I wrote about tipping some weeks ago, I had no idea that the piece would lead to so much debate on social media. I wrote that I thought tipping in restaurants was a stupid and pointless practice and should be abolished. First of all, I said, it allowed restaurateurs to pay their wait staff low salaries on the grounds that they could make up their wages by wheedling money out of guests as tips.

Secondly, I argued, the tipping system was intrinsically unfair because it rewarded waiters alone, even though many others (chefs, cooks, managers, dishwashers even) had contributed to the success of the meal.

Thirdly, I had seen very little correlation between good service and tips. The people who got the highest tips were often younger, prettier, smarter or more flirtatious. Good professional service was rarely rewarded.

Read: Is service charge any different from tip?

Fourthly, I said, the cult of tipping tyrannised guests who were never sure how much of a tip to leave. The old ‘ten per cent of the total’ rule was now dead. In New York, for instance, tips of 20 per cent or more were routinely expected, which, I thought, was too much. If I order a good bottle of wine for say $300, why should I add another $60 for the guy who pours it into my glass?

And finally, I argued that the restaurant industry had conned us into believing that tipping was a normal practice. In fact, it rarely exists outside the hospitality business. If you have had a good flight, do you tip the stewardess? If a nurse (who performs a much more valuable function than a waiter and earns much less) treated you well during your hospital stay, she did not expect a large tip in return.

My view has always been that a service charge is better than a system where you are expected to tip. But this charge should be distributed among all the staff members and not just the waiters. There should be no pressure on guests to tip extra after the service charge has been added to the bill (no leaving the space for extras on the credit card slip empty in the hope that guests are embarrassed enough to add something more).

But, I warned, unscrupulous restaurateurs often did not pass the service charge on to the staff but kept it for themselves. There should be a law against doing that. Ideally, however, they should just do what other industries do and pay their staff full wages. They could raise the prices if they wanted. After all, we were already paying much more than menu rates once you added tips and/or service so it is not as though we would be out of pocket. We would still pay the same total amount without dividing it into bill plus service.

I tweeted, once the debate heated up, that I longed for a restaurant that charged you one price, ended all this nonsense about tips and gratuities and just let you enjoy your meal.

Most people on social media seemed to agree with me though there were some (only semi-coherent) responses from restaurateurs, who pulled out all the old chestnuts about “rewarding good service”, and “making sure that the server gets a reward”. (Sorry, pal, it is your job to pay him, not mine. I just pay you. And it’s for you to work out how much you want to pay each section of your staff.)

By some co-incidence, a few weeks after that piece appeared, the great New York restaurateur, Danny Meyer, announced that he was abolishing tipping at his restaurants.

That this simple announcement should have generated headlines all over the world is a measure of the esteem with which Meyer is regarded. He made his reputation with the Union Square Café (after which his group is named) and his empire now includes over a dozen restaurants including the Gramercy Tavern and The Modern, which just won its second Michelin star. (Meyer is also the founder of Shake Shack, which is not part of the Union Square Café group and he launched Tabla, which made a star of Bombay’s very own Floyd Cardoz, and Eleven Madison Park, which he later sold to his chef, Daniel Humm, and others).

No extras here: New York restaurateur Danny Meyer, who runs several places, including Shake Shack, has announced that he is abolishing tips at all his restaurants. (Photo: SHUTTERSTOCK)

The chef/restaurateur Tom Colicchio, well-known to TV viewers, has been experimenting with the same sort of idea at his Craft restaurant. He believes – correctly, or so I think – that the Uber-using younger generation prefers a fixed service charge to the concept of arbitrary and nerve-racking tipping.

But Colicchio does not have the clout of Danny Meyer and had wondered how guests would react to larger bills (because the tip/service element was already included in the total). “Danny has a lot of trust out there with his customer base,” Colicchio told the New York Times, “and if they are willing to pay higher prices, it’s going to make it easier for everybody else. That is still my biggest concern: whether the dining public is up for it.”

Obviously Meyer has thought long and hard about this. He considered implementing the change some years ago and finally went ahead after his star chef, Abram Bissell, at The Modern said he needed to pay higher salaries in the kitchen. Bissell had a point. As Meyer explained to the New York Times, during the 30 years he has been in the business, the earnings of servers have gone up by more than 200 percent, while kitchen income has gone up by only around 25 per cent.

(Photo by Mychal Watts/WireImage) (WireImage)

If you think about it, the reason most of us go to restaurants has damn-all to do with the waiters. We go for the food (from the kitchen) and the ambience (created by a decorator and maintained by managers). Waiters have the ability to spoil the meal experience but they have no positive role: they can’t improve the food or create the ambience. You may say ‘Let’s go to such and such restaurant because I like the vibe’. Or you may say ‘Let’s go there; I love the tandoori chicken’. But have you ever heard anyone say ‘Let’s go there: I like the waiters?’

So why then should servers be paid so much more than other members of a restaurant’s staff?

All the traditional arguments in favour of tipping have long since been explored. A study conducted by Michael Lynn of the Cornell Hotel School found that the quality of service only accounted for a two per cent variation in the amount that people tipped. That means that 98 per cent of the reasons for tipping had nothing to do with food service.

The real factors that influenced tipping, Lynn found, were different and worrying. Black waiters got smaller tips than white ones. Women got larger tips. Sexy women got bigger tips than frumpy women. And so on.

Waiters are not idiots either. They know which table is likely to leave a large tip. For instance, if you look visibly rich, you will get better service. If you look like you will order expensive wine, you’ll get great service (the waiter opens a `400 bottle of wine exactly the same way as he opens a `12,000 bottle – but because his tip is a

percentage of the bill, he will pay more attention to the guy who orders the `12,000 bottle). Waiters also know how to sniff out vulgarians and nouveau riche types who are likely to leave big tips. In the process, the rest of us get much worse service.

So, what’s the best way forward? One solution is to have a flat service charge (capped at say, 12 per cent) added to all bills and divided among the staff. This is added after the full bill has been totalled and tax calculated. The argument offered for this is that a service charge does not attract sales or luxury tax. If, on the other hand, the restaurant had included all staff costs in its prices then bills would not only have been higher but the full amount would have been subject to tax. This way 12 per cent of the bill escapes sales tax. Well, fair enough, but I can’t believe that cheating the exchequer out of tax is a sound or very worthy argument.

Here’s my solution. Abolish all tips, service charges, etc. Do what nearly every other industry does. Pay proper salaries to all of your employees. Calculate the real cost of each dish and charge us a price based on that.

It takes the pressure off the guest and creates a more equitable system.

So the choice is clear: a professional pricing system of the sort that most industries follow? Or tipping and the tricks and inequities that go with it? In other words: jugaad.

It really is a no-brainer, isn’t it?

From HT Brunch, November 1

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