Is it time to end tipping?

Tipping annoys customers, inflames tensions between co-workers, undermines restaurant owners, and has no measurable impact on service. So why can’t we get rid of it?

April 22, 2016

By Max Fawcett / Photo: Byron Eggenschwiler

Nevada Cope swears that her new restaurant’s name wasn’t chosen with any kind of deliberate irony in mind. Still, it’s hard to ignore the fact that her West End eatery, Ritual, will be the first restaurant in Vancouver to eliminate tipping—which happens to be one of the most well-established dining rituals we have in North America. Like most rituals, the practice of tipping has transcended its original purpose and become something closer to a reflex than a conscious choice. But ritual or not, Cope decided that it was time for tipping to go. She knows it won’t be easy. “People are kind of scared for me, because it’s putting the burden on the restaurant instead of the customer. But it’s the right thing to do—it should be up to the employer to take care of their employees and make sure they’re getting paid properly. It shouldn’t have to be the customer that makes that call.”

That’s certainly what Danny Meyer thinks. Meyer, who’s something of a legend within the New York restaurant scene, did away with tipping at all 13 of his Union Square Hospitality Group’s full-service restaurants in November. He’s no stranger to shaking up his industry, either. In a piece for Eater last October, Ryan Sutton noted that Meyer and his restaurants were ahead of a number of other major social trends that did, in time, affect the rest of the hospitality industry. His most famous—and famously unpopular—such move was to ban smoking, a decision that turned out to be prescient. Given that, Sutton wrote, “If Meyer thinks we’d all be better off without tipping, he’s probably got a good reason for it.”

The biggest reason of all, according to Meyer, is that it eliminates a longstanding imbalance between what those who work in the front of house and those who work in the kitchen take home each night. As he told Eater’s Sutton, “I hate those Saturday nights where the whole dining room is high-fiving because they just set a record, and they’re counting their shekels, and the kitchen just says, ‘Well boy, did we sweat tonight.’” Cope, too, comes at the issue from a cook’s perspective. “I’ve always seen the servers walk away with hundreds of bucks while the kitchen gets tipped out, like, $10. It’s not really fair.”

'Servers walk away with hundreds of bucks while the kitchen gets tipped out, like, $10. It's really not fair.' Click to Tweet

Fairness aside, that imbalance in wages between the front and back of the house is also leading to a major shortage of skilled cooks. As Meyer told Eater, “We’re in a day and age where there are more talented cooks than there ever have been, but fewer of them who want to live in New York to start a fine-dining career.” According to Chambar’s Karri Schuermans, the skills shortage in Vancouver’s kitchens might be even worse. “It’s really bad. Not only are there a lot of restaurants opening, but a lot of people just can’t afford to live in Vancouver. We’re losing so many staff that are in their late twenties and early thirties.”

That’s partially a reflection of both the high cost of housing here and changes to the temporary foreign worker program that make it difficult (if not impossible) to bring in help from outside the country, but the fact that local cooks are earning substantially less than servers doesn’t help. Schuermans’s husband, Nico, is a chef himself, and, she says, he “knows that it’s not fair for guys who are generally working more hours than a server to walk away at the end of the day with less when they’re just as passionate about working hard.” That’s why Chambar is trying to chart a middle ground between Meyer’s no-tipping orthodoxy and business as usual. By increasing the percentage of a given evening’s sales that the front of house staff have to share with the back, she says, she and her husband have created an environment in which everyone’s incentives are aligned. “People don’t come to us and say that someone else isn’t doing their jobs. They call them out on it because they’re sharing income.”

But according to Bruce McAdams, an assistant professor at the University of Guelph’s School of Hospitality and Tourism Management (and someone with more than two decades of experience in the hospitality industry himself), that sense of common purpose at Chambar isn’t very, well, common. “Tipping promotes this mercenary, individual goal-oriented perspective for the server,” he says. “I was a server, and you could see how that played out in the industry.” Indeed, that’s exactly what David Jones, owner of a Parksville restaurant called Smoke ’n Water that experimented with a no-tipping policy in 2014, saw after he was forced to pull the plug on it. “When I switched back, it wasn’t two days before you could tell the difference. Where before everybody was pulling together, it was suddenly us against them—the servers can’t get it right, and the cooks can’t put it out fast enough.”

All of this might be an acceptable cost of doing business if tipping had a meaningful and measurable impact on the quality of service that customers receive. But as Amanda Cohen, chef and owner of the award-winning New York restaurant Dirt Candy, argued in a piece for Eater back in 2014, it doesn’t—not even close. “Servers wearing white shirts get higher tips than servers wearing red shirts. Blonde waiters make bigger tips than brunette waiters. Waiters who draw a smiley face on the check get better tips, unless they’re men, in which case they make worse tips. Black waiters make lower tips than white waiters. If there was a shred of research that showed tipping was a rational process, I would be all for it, but the research shows that tipping makes no sense.”

'If Meyer thinks we'd all be better off without tipping, he's probably got a good reason for it.' Click to Tweet

Bruce McAdams, who’s done plenty of that research himself, agrees. “It makes no sense to any of the stakeholders, other than the server. And nothing against the server, because they provide great value in the dining experience. But unfortunately, their compensation—based on our research, and other people’s research—shows them taking a disproportionate amount of the wage pie out of the system.”

There’s also the fact that, from the restaurant owner’s perspective, it puts a substantial portion of their revenue in the hands of the consumer. “If I’m buying an airline ticket,” McAdams says, “WestJet isn’t going to give me an option on where I can take 15 percent of the cost and distribute it.” And with ever-increasing food and labour costs cutting into the already prosciutto-thin profit margins at most restaurants, anything that could increase the top line ought to be up for consideration. But, McAdams says, it’s difficult to find anyone who’s willing to put their money—well, their servers’ tips—where their mouth is. “I’ve had this talk with VPs, CEOs, and directors, and they cannot argue my point. They’re like, ‘You’re right—but we’re not going to be the first.’”

That’s why everyone’s eyes are on Danny Meyer’s big experiment. He’s uniquely qualified to take the risk, given that his stake in Shake Shack—the popular comfort-food chain that went public early last year—makes him a very, very rich man. “If it backfires, he’s losing millions—he’s not losing his billions,” McAdams says. “But now that Danny Meyer has done this, the amount of attention that I’m hearing from people is incredible. Where I would have been laughed out of a room three years ago, people want to listen to what I have to say about tipping now.”

As for what diners in Vancouver will have to say about Nevada Cope’s no-tipping experiment? She thinks that, in time, they’ll buy in too. “It’s going to take a while for customers to get into this mindset. And then it’s really going to take off.”

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