The fight against tipping in American restaurants took a major step forward today. New York City restaurateur Danny Meyer announced that the restaurants in his Union Square Hospitality Group — which includes the likes of Blue Smoke, Marta, and Gramercy Tavern — will eliminate tipping over the next year. Instead, Meyer explains that the restaurants will raise menu prices to include hospitality and simultaneously provide a more equitable payment for all employees.
Eliminating tipping has been a hot topic in the restaurant industry for some time, with many chefs and restaurateurs arguing that the system is unfair for back-of-the-house workers. Thanks to various state regulations, not even cooks are allowed to share tips with their server and bartender colleagues, despite their own vital contributions to the quality of a meal. “We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us,” Meyer wrote today in a note explaining his decision.
Though built-in gratuities are common in restaurants throughout Europe and much of the world, tipping has long been a staple of American restaurant service structures. While the idea is that tipping incentivizes better performance from servers, there’s considerable debate about whether that actually shakes out to be true — as well as whether it’s a good idea to ask customers to determine a server’s fair wage based on limited interactions. For all these reasons, restaurants across the country have been experimenting with eliminating tipping in recent months.
With more than a dozen restaurants ranging from casual to fine dining, Union Square Hospitality Group isn’t going to roll this all out at once. Instead, the Michelin-starred The Modern will be the first to eliminate the tip line from its checks beginning in late November. According to an extensive report from Eater critic Ryan Sutton, that’s a tactical move: The Modern offers both a tasting menu and an a la carte menu, allowing Meyer to gauge diners’ reactions in both types of settings. After a few months of testing, USHG will stagger out the new system at the rest of its restaurants throughout 2016.
In his note, Meyer writes that customers won’t find much of a change in the total cost of their dinner bill given that the rise in food prices is mostly going to replace the presumptive 20 percent tip that will be lost. Sutton also notes that the group plans to be strategic in its price hiking, though, keeping prices relatively stable for items like coffee. And though the loss of tips might be bad news for servers, Sutton writes that the restaurant group is developing a revenue share system that they hope will replace any income servers lose in this whole switcheroo.
Meyer acknowledges that the decision to abandon tipping is a bold one, encouraging anyone concerned to write into HospitalityIncluded@ushgnyc.com. But this decision is key to enabling his restaurants to reward, promote, and fairly compensate employees, Meyer writes, adding that, “by eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work.”