Tip of the Iceberg
LAST YEAR, CELEBRITY RESTAURATEUR Danny Meyer publicly declared that his restaurants would switch to a “no-tipping” policy—eliminating gratuities while raising wages across the board. This January, Eric Korn—owner of Wolfert’s Roost, an intimate 34-seat New American eatery in Irvington—announced he would follow suit. “[Our servers] like it,” Korn says. “We’ve done our best to compensate them at a level where they’re making what they were making previously. While they’ve lost the possibility of someone coming in and leaving a huge tip, we’ve also taken away the [their] fear of walking home with no money or very little money, which I think is more valuable to them.”
The no-tipping concept has been slowly gaining traction in America. In November 2015, the national restaurant chain Joe’s Crab Shack effected a no-tipping policy in 18 of its 131 locations, following in the footsteps of a number of independent restaurants that had done the same, including Public Option in Washington, D.C., and Ivar’s in Seattle. Proponents claim the policy puts the front and back of the house on a level playing field, provides servers with a reliable source of income and encourages job stability.
However, the policy has raised a number of issues. Because of the increased wages paid to the hourly employees, restaurants generally need to cover the added expense. “What we’ve done is we’ve raised menu prices,” Korn says. “The amounts have varied from just a little bit for some items to up to 30 percent on others.”
In theory, if a restaurant eliminates tipping and raises its prices 15 to 20 percent (the average amount of a tip in New York City), there would be no added expense for the customer. Problems arise when a restaurant with a no-tipping policy raises its prices to cover the difference—thus raising its price point in comparison to competitors. Others worry that if tipping is eliminated, service will suffer. “I think that’s a ridiculous concept,” says Josh Kroner, chef/owner of Terrapin Restaurant in Rhinebeck, who has considered adopting a no-tipping policy. Kroner believes servers will maintain their level of service if they’re paid a comparable living wage, just like the cooks or management.
Both Korn and Kroner believe no-tipping restaurants are the future of the industry, but they know that future is not yet here. Tipping in America is generally seen as an expression of satisfaction and recognition of “a job well done,” and it may prove difficult to change a behavior so ingrained in our culture. For the moment, all eyes are on those restaurants that have adopted a no-tipping policy. “We haven’t done a full analysis of how it’s worked financially,” Korn admits, “but so far, it’s working as it’s supposed to and our guests are genuinely happy with it.”