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Update on the tipless restaurant - Input Junkie
November 14th, 2013
09:46 am

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Update on the tipless restaurant
For a while, a detailed explanation of why it was better to have a no-tips restaurant was being posted and re-posted where I was hanging out.

It was an intriguing piece which claimed that the number of transactions and risk of betrayed trust between the servers and the lack of inclusion of the kitchen staff damaged morale, that servers neglected all customers except for white males because they tipped the most and the biggest tippers were playing out sexual fantasies about waitresses, that good servers didn't track tips individually anyway, and that customers generally tip whatever they usually tip so that service doesn't get fine-tuned by the incentive. Instead, the best strategy for the servers to get more money from tips is to snipe extra tables from other servers, even if service suffers.

The restaurant closed, and it didn't have good service. More exactly, the service was very uneven and apparently, the food varied from excellent to eh.

I don't know what's to be learned from this, except to be a little cautious-- perhaps very cautious-- about cool ideas that you hear about from their proponents. I don't habitually follow up on cool ideas. I only found out about the closing of the Linkery because I wanted to make a point about the cost of trying to fine-tune prices.

This entry was posted at http://nancylebov.dreamwidth.org/1024840.html. Comments are welcome here or there. comment count unavailable comments so far on that entry.

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[User Picture]
From:ritaxis
Date:November 14th, 2013 03:51 pm (UTC)
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You seem to have linked to every aspect except the one I want to ask about, and I'm too lazy to follow the links and discover whether any of them do answer my question. Did they pay their workers at a good rate? Or did they expect them to forgo tips on principle?

One of my favorite restaurants here, O'mei, has taken on the issue from that angle. A notice on the menu says that prices have been adjusted to include an eighteen percent raise for all the staff. They don't forbid tipping, but they say it's unnecessary because of the raised wages (which are still not high, probably, as I live in a low-wage town). Service there is good and the food is great.

[User Picture]
From:nancylebov
Date:November 14th, 2013 04:12 pm (UTC)
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http://jayporter.com/dispatches/observations-from-a-tipless-restaurant-part-2-money-and-the-law/

"So, we, following the lead of places like Chez Panisse, added a line item service charge on our bills, and that allowed us to distribute the money paid for table service in a way that seemed more equitable. Having more equitable distribution in money, of course, led to us having better quality service and food. In turn, we saw a sharp increase in business over the first two months of the new system. Our servers’ total pay rose to about $22/hour, most of the cooks started making about $12-14 depending on experience, and the diswashers about $10. (Those numbers declined somewhat over the years, as the recession took its toll on restaurant check averages in San Diego)."

Discouraging tipping rather than forbidding it strikes me as easier on the restaurant-- less to explain and less to enforce.



Edited at 2013-11-14 04:13 pm (UTC)
[User Picture]
From:ritaxis
Date:November 14th, 2013 06:26 pm (UTC)
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I can't expect good morale in a place where the servers are making twice what the kitchen staff is making.
From:paulshandy
Date:November 15th, 2013 04:52 am (UTC)
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I don't know if this happens a lot, but a friend of mine was a waitress in a high end restuarant, and the tips may have been collected by the waitresses, but they shared with the rest of the staff.
[User Picture]
From:ritaxis
Date:November 15th, 2013 04:00 pm (UTC)
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It varies a lot.
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From:kalimac
Date:November 14th, 2013 04:47 pm (UTC)
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O'mei in Santa Cruz? I eat there occasionally, and was last there a few months ago. I didn't observe any notice on the menu (which could mean that I simply missed it), and the prices, though higher than some Chinese restaurants, weren't so high as to surprise me, especially considering the quality of the food, which, as you note, is good.
[User Picture]
From:ritaxis
Date:November 14th, 2013 06:24 pm (UTC)
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I haven't been there since gthe last big family get-together. The notice might be in a sign on the wall. And no, the prices aren't that high. It doesn't take much of a rise in prices to fund better wages, though I am sure that in this case the wages aren't really high either, being Santa Cruz.

edit: I misstated how it's done, I think. I think there's a percentage added to the bill rather than an upfront rise in prices.

Edited at 2013-11-14 06:27 pm (UTC)
[User Picture]
From:kalimac
Date:November 14th, 2013 06:41 pm (UTC)
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Oh, I see. That's less good, because it doesn't address the principal irritation factor of tips, which is that they're add-on items. There are bitter complaints on Yelp about the unwarned automatically-added-in tip. Some restaurants do this to parties of very large size, but they announce this on the menu. O'mei apparently does this to parties of smaller size, and doesn't announce it. But they don't do it for single parties, and I've only ever eaten there alone.
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From:ritaxis
Date:November 14th, 2013 07:14 pm (UTC)
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No, they do announce it. It was quite prominent in more than one place when I ate there last. I wouldn't call in "unwarranted" since they do say that it goes entirely to the wages of the staff.

And I do not believe that they only add it to parties of more than one. There was no language to that effect, anyway. It was, in effect, an actual rise in prices, but pulled out and pointed to so that they could make a statement about their workers.
[User Picture]
From:nancylebov
Date:November 15th, 2013 04:19 pm (UTC)
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When I've seen a service charge added for groups, it's been for 6 or more people. I don't think I'd count that as "very large".
[User Picture]
From:kalimac
Date:November 14th, 2013 04:50 pm (UTC)
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Too many variables to judge anything from the level of service in a single restaurant about the wisdom of a no-tip policy. What we need is a no-tip culture, and there are some, both in other industries and in other countries.
[User Picture]
From:nancylebov
Date:November 14th, 2013 06:09 pm (UTC)
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If the owner claims that a no tipping policy will lead to especially good service and the service is actually spotty, we've at least got evidence against the strong claim.
[User Picture]
From:kalimac
Date:November 14th, 2013 06:12 pm (UTC)
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Very weak evidence. Too many other variables. Claim too strongly worded, yes, but disproving the over-wording demonstrates nothing valuable to know.
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From:filkerdave
Date:November 14th, 2013 08:54 pm (UTC)
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Yes, this. The dataset is far too small.
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From:filkerdave
Date:November 14th, 2013 08:59 pm (UTC)
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As noted, I think the dataset is far too small to make any sort of claim that tipping will or won't affect the service received. I've had excellent service in Europe, and I've had horrible service in Europe -- and tipping just isn't done there. Sometimes, the service is just bad.

(Disclosure: white male, usually a decent tipper -- 20% is normal and I'd rather round up than round down, but I do it based on service, not based on whether or not I have a sexual fantasy about the server (because, seriously? Hitting on the server is tacky. Just don't do it.) (I'm unlikely to reduce it for poor food if the service is decent).
From:paulshandy
Date:November 15th, 2013 04:51 am (UTC)
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Hey, if waitresses can flirt with me to get a bigger tip, I don't mind playing back. I just don't forget it's not real.
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From:acelightning
Date:November 15th, 2013 01:51 am (UTC)
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When I was in Australia, the very first time I had dinner in a restaurant with my friends, they explained to me that they didn't tip food servers (and other "service"-type workers, like taxi drivers) because the workers didn't need it; they're paid a decent wage to begin with. They were aware that, in the US, there's a much lower minimum wage set for food servers, because the government assumes they're going to make more than that in tips. In Australia (and I found this again when I went to Iceland), they think this is appalling. They might leave a modest tip if the service and/or food was really exceptional, or if the party makes extraordinary demands upon the servers. But for the most part, all the operating costs of the restaurant, including pay for the servers, kitchen staff, and bus"boys", are figured into the menu prices.

I wish I'd known this before I tipped the taxi driver who took me from the airport to my hotel... at New York rates...

From:paulshandy
Date:November 15th, 2013 04:50 am (UTC)
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I've heard they don't tip in Japan either, and they told me service was excellent. Culture matters.
[User Picture]
From:ritaxis
Date:November 15th, 2013 04:05 pm (UTC)
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People keep not talking about the economics of tipped work. It's not all about whether you get your forks placed correctly on the table and a nice smile with your prompt plate.

In the US, there are laws about tipped wages. In US labopr law, certain jobs are expected to be tipped and there are fdofferent minimum wages and tax laws for them. The US minimum wage for jobs that are expected to be tipped is two dollars and thirteen cents.

And a "tipped" job is one that gets 30 dollars a month in tips.

So potentially, that restaurant worker could work 30 hours a week and bring home, before taxes and after tips, four hundred dollars. (Only in some states: most states have higher minimum wages for tipped workers, fopr example in California it is eight dollars an hour, while in Maryland it is three dollars and sixty-three cents)

Also, tips are taxable. Tipped workers have to give the tax portion of the tip to their employer for withholding.

Workers who work in jobs generally expected to be tipped, who don't report tips and pay taxes on them, are subject to audit, and it is very difficult to prove a negative.


[User Picture]
From:nancylebov
Date:November 15th, 2013 04:23 pm (UTC)
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"The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more)." I have no idea whether 8% is a reasonable estimate.

I think people generally do talk about the fact that servers get such low salaries that they're dependent on tips.
[User Picture]
From:ritaxis
Date:November 15th, 2013 04:28 pm (UTC)
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But not, apparently, in the case of this restaurant, whose argument seems to be based on resulting service.

And I don't think people are generally aware how very low the wages of their tipped workers are, or that they pay taxes on their tips.
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