Capital

Danny Meyer’s Big Experiment

Tipping in restaurants and bars is a contentious subject. While the extra income is often considered an essential wage benefit by its recipients, there is no imperative for customers to provide it beyond larger social responsibility.

In turn, some restaurateurs have tried to ensure fair and equal wages for servers by eliminating the need to tip completely. Danny Meyer of the Union Square Hospitality Group — and the founder of Shake Shack — is one such man, who has eliminated the practice in many of his restaurants instead opting for a “hospitality included” model.

But now Meyer, and fellow “no-tippers” like Tom Colicchio and David Chang, have been accused of conspiring to use no-tipping to over-charge customers and pocket the extra gratuity for themselves. According to the lawsuit, “Participating restaurants and a compliant media have portrayed the no-tipping/higher prices movement as intended to promote social justice and equality, while the real aim and effect is greater profit at the expense of workers and consumers.”

This lawsuit’s progress and results could have massive implications for the restaurant industry. Thrillist’s Kevin Alexander contends that tipping could be the defining factor that makes or breaks modern restaurants. He notes that moving toward no tipping is key for “long-term survival” but also serves as a “financial, cultural, and psychological minefield.”

Despite this lawsuit and any alleged misuse of funds by these chefs, going “tip-less” is something restaurants should consider. Though the switch can be challenging, tipping is inherently a band-aid solution — and sometimes an exacerbating problem — to fundamental staff inequalities.

But before we delve into that, it’s essential to understanding where tipping comes from before attempting to get rid of it.

Tipping is such a complex historical and cultural phenomenon that I won’t be able to discuss it entirely into it here (fortunately there’s a whole book on the subject if interested). But for a restaurant thinking about going tip-less, it’s essential to understand that the practice is deeply ingrained in American etiquette, so much so that it shapes our psychology.

There are a few theories about why this is the case. In a scathing critique of the system, C.A. Pinkman argues Prohibition and labor laws made tipping essential in the United States, and that the act is the result of unfair wages and remains powerful because of flawed American Exceptionalism. In her book “Forked,” Saru Jayaraman argues that tipping originated because consumers didn’t want to sufficiently pay newly-freed slaves.

Even with these murky origins, Americans have a clear attachment to the practice. An article in the Atlantic a few years ago cited a poll in which 81 percent of Americans had no interest in getting rid of tipping.

While this seems counter-intuitive to the overall positive reaction to eliminating tipping for the sake of workers, psychologist Ernest Dichter argues that the disparity in power between customer and server is so great that the former feels a deep need to compensate for said disparity. On a less “feel-good” note, Americans also feel entitled to excellent service — despite any behavior on their part during the dining experience — because they have the ability to tip.

In our next part of our “no-tipping” series, we will discuss how tipping has evolved into a dangerous practice that fosters socio-economic divides among staff.

 

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