One revered NYC restaurateur has decided that it’s time to do away with tipping.
Danny Meyer, founder of the Shake Shack and CEO of Union Square Hospitality Group—which manages several of Manhattan’s biggest name restaurants— has had this idea cooking for years, he told Eater, which first reported the story.
Now, Meyer feels the time is right.
“Think about the opportunity to innovate” Meyer told Eater. “Fundamentally, the cost of going out to a fine dining restaurant is false.”
By eliminating tips and increasing hourly wages for his employees, Meyer hopes to even out what has traditionally been an unfair playing field between servers and kitchen employees. He hopes the idea spreads.
“The more of the restaurants we change over, the more courage, hopefully, that will create for other restaurants to join in, which would then turn this into a virtuous cycle,” Meyer told Eater. Prices for his thirteen USGH restaurants are set to rise over the course of the year with a little strategic planning. But now the real question is: will other restaurants follow suit?
One primary complaint vocalized about the system by Westchester restaurateurs and staff is clear: tipping is highly subjective. Unlike other, salaried jobs, America’s tipping culture creates a setting in which the client determines the wait staff’s paycheck, not their boss.
“Tipping is arbitrary,” says Phil McGrath, head of the culinary program at Westchester Community College.
Executive Chef Mogan Anthony of Village Social in Mt. Kisco agrees, saying “Who am I to decide what you and the person next to you are supposed to get paid?”
Two customers can receive the same service and pay different tips, which can leave the kitchen staff feeling cheated, too. While line cooks make a set hourly wage, the front-end staff can triple their earnings through tips, and it’s illegal to share the wealth. Tips are strictly allotted to the wait staff, which keeps owners from distributing those earnings to their back-end counterparts.
According to Anthony, who was trained in the European style of service, the salary system provides an incentive for employees to grow with the company. “I think the European system makes everybody win—employer, staff, and guests.”
However, this alternative may not catch on for everyone.
“The biggest problem would be forcing the customer to pay more. People don’t realize that they’ll be paying taxes on the sales,” says McGrath. When tips are eliminated and prices go up, customers will face an additional charge in taxes. While it may only be a few cents, the culture shock that comes along with the higher price may make for a hesitant consumer.
“You can’t go to Asia and try to implement the American tipping system,” says Anthony. “This is American culture that has been done for hundreds of years, and it works.”
Ultimately, Anthony says it’s “a little too early to say” whether he would consider following in Meyer’s footsteps.