either you create a cultural norm where tipping isn't allowed or expected, which Uber has effectively done, or you have a situation like restaurants, where the tip may as well be part of the price, unless you're cool being the asshole who doesn't tip, which most people aren't.
if tipping is an option, through a kind of cultural game-theoretic pressure, the situation will always devolve into the restaurant norm. at least that's how it is in the states, and short of massive cultural changes i don't see that changing.
In the UK tipping in restaurants is optional and, while it sounds really weird to say this, I don't think the waiters and waitresses seem to care either way. I don't get a different reaction from them if I tip or if I don't. They don't seem elated if I tip a lot or disappointed if I tip a little. Nobody seems to care and this situation seems stable as it's been this way as long as I've been an adult.
It's a perversion of the whole norm, since it effectively turns tipping into a subsidy to the restaurant owner.
https://en.wikipedia.org/wiki/Tipped_wage_in_the_United_Stat...
That place systematically robbed those staff by refusing to pay minimum wage and falsifying records and withholding taxes based in nonexistent tips. The Labor department fined then pretty heavily -- but that isn't an uncommon practice.
It could be a subsidy if it wasn't an established custom to tip, but people know quite well that they are paying the server a tip for the service.
I suppose the fact that it enables the restaurant to under-report wages and thus under-pay wage taxes is a bit of a subsidy (but then some of that savings probably shows up for the customer).
Say the server works 40h/week like a regular full-time worker, so the minimum take-home pay under federal law is $15000. If the server gets $0 in tips, the restaurant must pay the $15000. But if the server gets, say, $5000 in tips, the restaurant can pay only $10000.
The server gets the same money, only the restaurant gets to save some.
It also has a non zero impact on the menu prices (they would go up if tipping wasn't expected)
I noticed they did this in Singapore. You'd be charged a service fee on top of your bill, I can't remember if they popped tax on top of that too. If it's non-optional, it should be included in the cost.
For the same reason airlines don't include mandatory charges in their fares - humans are not particularly good at rational pricing evaluation.
It's known as partition pricing and generally results in higher revenues - from "The Effects on Perceived Restaurant Expensiveness of Tipping and Its Alternatives": [1]
"Furthermore, participants ordered more expensive meals when automatic gratuities were added to the bill than when the costs of service were built into menu prices"
[1] http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?artic...
See also:
http://www.msi.org/reports/divide-and-prosper-effects-of-par...
How does this conclusion follow from your previous statement?
The fact really is in the USA if we eliminated tipping, the cost of the food on the menu would just go up by $X number of dollars, and people don't want that, they want low prices for the items on the menu which is why the system also is the way it is.
--
Looked it up. You were right. Well, at least in the pay structure. 85% of surveyed people prefer a tipping pay structure to including it in the price of food.
I think it has to do with the perceived idea that tipping leaves the diner in control and leaves the ability to punish a bad waiter. Maybe I'm wrong about that too.
https://www.surveymonkey.com/blog/2013/04/18/tipping-in-rest...
I'm sorry doctor that appendectomy scar is a bit to big for my liking I'm only tipping you $180.
After doing this for enough years, it becomes a background task that you don't even really think of, no awkwardness.
It is absolutely insane to me that you would tip anything at all in that case. US tipping culture is crazy.
In what situation would you give 0% tip?
What people have to understand, is that a "Tip" in the United States for a server == Salary, not some nice additional money. It's how they pay their rent/buy their groceries/feed their children.
And, while that "$7.25/hour" is OK in some place like Terre Haute, Indiana, It's destitute poverty in a lot of cities, so the societally agreed convention is that in order to live/pay groceries/utilities/bus-fare/etc... tips are essential.
It's reasonable to assume that when a serving person in the United Stated doesn't receive a tip of 18-20%, then that money is resulting in a reduction of expected baseline salary.
Also, when I go to the US with 5-10 year intervals the norms for tipping seem to have always crept upwards.
Then they raised the minimum wage. So restaurants added a 20% service fee on to cover it. Okay, fine. That's actually the outcome I wanted.
Except some places left the tip line. So now people still tip out of obligation.
Never ends.
On the other hand, if you know beforehand that you are expected to compensate the service staff outside of the bill from the establishment, you should factor in your comfort level with that arrangement before you order, not act like it is some obscure thing you'd never heard of being done.
Canada is the same way, do not tip 0% in Canada unless the waiter was abjectly rude or spilled something on you.
* General hourly minimum wage – $11.20 for most employees
* An hourly minimum wage of $10.70 for employees serving liquor as part of their regular job
https://work.alberta.ca/employment-standards/minimum-wage.ht...
Waiters always earn minimum wage in the US regardless of what tips they get. A waiter who earns $0 in tips must still be paid minimum wage by the restaurant that employs them.
See the Fair Labor Standards Act per the United States Department of Labor: https://webapps.dol.gov/elaws/faq/esa/flsa/002.htm
Since it is expected that tips make up the difference between the tipped minimum wage and the regular minimum wage, yes, tipped employees are actually paid less by their employers than regular minimum wage in the vast majority of cases. This is a large part of why tipping remains in practice - tips effectively subsidize the employer's payroll.
https://en.wikipedia.org/wiki/Tipped_wage_in_the_United_Stat...
A waiter who earns $0 in tips is likely an awful waiter and won't remain employed long. His employer does not want to have to make up the difference on a regular basis.
> If an employee's tips combined with the employer's direct wages [...] do not equal the Federal minimum hourly wage, the employer must make up the difference.
In other words, the employer always needs to pay federal hourly minimum age. Paying a waiter less than minimum wage would be breaking the law regardless of what tips they get.
> tipped employees are actually paid less by their employers than regular minimum wage in the vast majority of cases
Edit: OK, I think I understand what you mean. I agree that because most waitstaff receive tips, the amount their employers pay can be less than minimum wage. However the amount that the waitstaff receive is always at least minimum wage.
Where in the world did you hear that?
https://en.m.wikipedia.org/wiki/Tipped_wage_in_the_United_St...
Tipping in restaurants and taxis is kind of expected in Romania, too (more exactly the capital, Bucharest). Granted, the taxi fares are ridiculously low, so even with a 15-20% tip the price only starts approaching a "normal" level. Restaurants' tips are more like 10%. I also tip my barber/hairdresser, but that's because he does a really good job.
all the (many) wait-people here in the states i've known really dislike it, and it's generally considered either clueless, rude, or stingy not to tip at least 15%.
i'm curious about things like:
1. if you go out with your friends to the pub, and don't tip on your bill, are you friends giving you shit about it or otherwise commenting or silently judging?
2. if you were on a date, would she notice and judge if you tipped poorly? (i know many women for whom it would be an instant deal-breaker here, essentially a social signal of many other undesirable traits)
I don't know how your date would be able to know how much you tipped, because you'd normally pay using a chip-and-pin credit card so you don't need to put any money on the table or write anything down.
On a date at a restaurant, they probably wouldn't care. Waitstaff don't really react differently whether you tip or not.
I think there are many reasons why it persists in the U.S. On the server end, it makes it easier for a casual employee to make a reasonable amount for a couple of nights work and you would make much less if you were straight hourly. It also allows service industry employers to "staff up" on those busy nights and not have to worry about keeping too many on the rest of the week. While customers get to do some social signalling, I think that's mostly adjacent to the server and owner's pay scheme.
If the U.S. moved away from tipping, they would need to pay a higher minimum wage, keep fewer casual employees that only work 2-3 nights a week, and the regulars would be either full-time or half-time which means the busy nights would have fewer servers, though maybe more experienced so nearly as productive for the ones that work it as a full time job.
Also try getting Scottish people to tip with game theory and see how that turns out..
http://www.nytimes.com/2008/10/12/magazine/12tipping-t.html?...
Instituting a living wage would in no way prevent you from working extra and being paid extra for that work. I'm inclined to believe you haven't actually researched what a living wage is or would entail to enact, because the inaccuracy of the claim you're making is egregious.
(I don't endorse that point of view, just trying to make sense of their claim.)
Basically, when setting a minimum wage, you end up picking between two groups of labor: those who work for some extra money (think high schoolers and retirees who would like some extra spending money and don't mind doing menial tasks that may not generate much value to earn in) and those who work to live (think unskilled laborers who do laborious work and feel they are insufficiently compensated for it). A lower wage favors the former group because they are able to offer the services for less (and the quantity of labor demanded will increase if the price goes down) while a higher wage favors the latter because they can demand more money.
I hadn't heard this decision point framed so clearly in terms of the two kinds of labor each side ends up favoring, that's a great example.
It would be nice if it was possible to have a sensible minimum wage for, say, employing someone over 5 hours a week, but have mechanisms that make it legal for someone to do very short term work at wages nobody should ever live on. There's plenty of people underemployed at 15, 20 hours a week, that would love to supplement that with a bit of extra work, even if it was under minimum wage. In fact, in some cultures this happens all the time.
That work would also get done if we had a citizen income that matches that living wage, and we got rid of the minimum wage altogether.
Now, whether the world would be in a better state by leaving work not done but guaranteeing a living wage or by maximizing work done is a matter for debate: Looking at minimum wage laws alone is not enough to compare policy outcomes. Still, the grandparent was making a defensible argument, whether you think he is wrong (and he might be) or not.
This is a real issue (and it applies to regular old minimum wages even they aren't living wages); its among the arguments for why Basic Income would be a better minimum-quality-of-life support than minimum wage guarantees for the working plus welfare for the nonworking, since it doesn't stop any mutually-beneficial work from being done merely because the market clearing price is below an artificial threshold.
OTOH, even people who recognize that the restriction on some work that it implies is a problem think its a cost worth paying for a living wage guarantee given that its harder to get support for (and, arguably, beyond the level of the economy now to support) a Basic Income at a sufficient level in the near term.
I live in the Seattle area where $15/hr is the minimum wage now for the city proper. Sure certain businesses still have another year or two to implement it, and other businesses another 5 or so years, but I'm looking forward to seeing the results over time and how well they match various parties' predictions when the law was passed.
While I believe people should be paid fairly, it would be difficult to implement and carry out successfully as history has proven.
Everyone wants to change the world, but how many people will actually pick up a stray piece of trash and throw it in a bin?
In many/most states, the minimum wage for a variety of jobs is not in the range of "livable". For example, minimum wage for restaurant jobs in Georgia is $2.13/hour [1]. They actually don't "get paid enough for this shit," so their attitude actually matches reality. Tipping is a necessary component of the compensation if we want to continue our practice of letting certain employers have exemptions from labor laws.
EDIT: $2.13/hour is $340.80 per month, if you are given enough hours to make full-time. Taxes etc. come out of that (you will probably see some of that money again when you file your taxes, for all the good it will do then).
(Yes, I know the employer is supposed to top-up the staff to e.g. $7.25/hr. That does not always/usually/ever happen.)
You are correct that paying people more than a pittance changes how they view their jobs.
I'm not saying that we should continue to screw over people who rely on tips as living wage. What I'm saying is that if one wants to have the overwhelmingly warm service Americans expect in restaurants, we need to keep tipping. After all, we've heard anecdotes about service in Europe being poor.
Yes yes, they don't tip in Asia, and service is excellent. Don't forget the social fabric is different there.
Except you do not give any argument for why that is the case, but just hand wavingly claim it. Why exactly wouldn't it work if tips were abolished, all the prices on the menu are raised to match the average income from tips, and salaries raised to make up for tips? I don't see why good service would only be possible with tipping.
I'm gonna hand wave some more: most Americans when they think of good service beyond just being quick on delivery. Good service is about having a friendly conversation and building rapport with another person. It's may be weird for those of us with introverted tendencies, but this is Middle America with big smiling teeth.
Now.. by giving me an immediate incentive (tip) to smile through a bad customer's rudeness (or even harassment--please don't ever hit on people paid to serve you, ever), I'll continue to smile and pour on that syrupy niceness even when I just want to tell a person that they're an asshole and never have to deal with them again.
Personally, I have absolute no problem with tipping, or paying higher prices to pay restaurant workers a better wage, but I think people who are pushing no-tip don't understand the complexities in place.
In the restaurant world, at the end of each night, you'd get a huge wad of cash, and you felt you had worked for it (even though it can be argued people tip consistently). So even though the carrot may not be real, it still convinced people to act a certain way.
Now take away that carrot, take away the cash. You just have better paid McDonald's workers.
Service in any restaurant is more a function of the kinds of employees you can attract (through wages) and the amount of training the manager puts into their staff. Tipping is only important in that it allows some restaurants to pay a fairly decent amount of money to attract higher quality workers for only a couple of nights when a straight wage would require a larger time commitment to get the same amount of money. However, a (necessarily higher) straight wage would also allow more workers the opportunity to make a decent full time living as a waiter or bartender, which means you could have really good servers even on less busy nights of the week, but fewer servers on the busiest nights as there's less flexibility in hiring and firing.
The biggest difference in customer service in all the establishments I've worked in was management. Training is extremely important and can't be winged, there has to be a procedure in place. Having the highest expectations of your employees and component staffing are a must. And don't be scared to fire anyone who is not meeting your standards.
Poor customer service is mostly a result of poor management. Good customer service is a result of good management.
Anyway over friendly servers make me very, very uncomfortable. I went out for food with my companions not for a social experience with a stranger.
Being nice to assholes isn't something I consider necessary for good service. If anything it's bad service for all the other polite customers who have to listen to their bullshit.
From having lived in both the U.S. and Australia, my feeling isn't so much that tipping is the reason why the service is better. I've had excellent service in some places in Australia and lousy service in places in the U.S. My feeling is that the management makes a point of emphasizing customer service more in the U.S. than in other places (even in businesses that don't have tips), and this is true across the board. Increased competition in the U.S. is some of it, and just plain cultural attitude is alot.
When talking about service you have to consider cultural differences too. I'm american, in the country that I studied abroad in the service expectations were different from cashiers than American cashiers and neither are tipped.
I also would prefer to have much less fake friendliness.
This might sound like the Union runs an extortion scheme, but interestingly the employers organizations are supportive as it means a lot less regulation and more flexibility. The result of this model is a pretty flat structure in comp: a nice university degree will likely not make you twice the hourly wage of the lowest diner job in the country.
Why shouldn't it?
Working class support for unions in the U.S. has been steadily declining for decades and sits around 50% today.
I included that point because there are a lot of foreign readers of HN who may not realize how widely flouted our labor laws are here in the US.