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Comment by planetzero | Hacker News Reader

"By outsourcing compensation to consumers, companies can pay their employees less"

They pay their employees less because otherwise, they won't be able to stay in business without radically raising their prices.

I wonder if the same people that want to get rid of our tipping system would be willing to pay double the price for breakfast?

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I've lived in the US, and now live in Germany. Sit-down breakfast is often cheaper here than the States, and you don't have to leave 20% as a tip.

The only thing that I've run into is that water is not free. And that "service with a smile" doesn't really exist here as an ethos. You receive the same dour service no matter how much you pay.

Why would breakfast be double the price? Wouldn’t that mean tipping on avg is more than the meal price?

Because everyone in the restaurant industry systematically underestimates tip income. It’s a pretty corrupt industry by modern standards. Waitstaff would get paid way more and the employer would actually have to pay taxes at value.

Prices wouldn’t double at most places, but some waiters at high volume or expensive restaurants make a lot of money, and factoring those wages would be tough on cash flow.

Full time employees will now cost much more to the employer: taxes, health care, benefits, a higher wage (the wage of a waiter is usually much lower than the standard minimum wage).

All these costs add up and the result will be a much higher end cost for your meals. Restaurants usually have razor thin margins as it is...if they even make it past their first couple of years in business.

Again, I feel like most people complain about the wages, but will then complain about the meal costs when they go up because they misunderstand the costs in running a business.

I know many waiters and waitresses and most make way more in tips than they would ever get if they were paid an average wage.

I think if you talked to most waiters/waitresses, they would want to keep the tipping system.

Why would you have to provide benefits just because someone is full time? Vast majority of food service places aren’t huge operations. Whatever regulation rules force benefits for employees certainly don’t apply to a restaurant with 1 or 2 dozen total employees.

Here you seem to know businesses will do what they want if they can get away with it when it comes to employment: https://news.ycombinator.com/item?id=21308309. In that example you’d probably agree benefits don’t need to suddenly happen if a business can get away with it.

If tips are gone then the wage would be regulated higher by the business (read as “should”). Seemingly it would just absorb the 15-30% tip amounts but a lot of places would have to account better for the time when things are slow. Instead of the server burdening there slow sales (driver of the tip) the business would have to guarantee the wage. It takes the employee out of the opportunistic approach that tipping seems to suggest. The same happens when you take commissions away. The sales staff now wants a higher equilibrium to account for the lack of an upside.

I can’t say double is the right number but I’m sure it’s higher than just the effective 15-30% tip.

>15-30%

Isn't 15-20% the effective standard range in the US for restaurants?

Yeah. 30% is pretty high to give.

If you pay for it by paying a higher price, or by tipping, doesn't really matter for the customer.

This is just a scheme to circumvent paying social security and tax costs.

15-20% is not double or radical. I would gladly pay that much more if I didn’t have to tip.

I don't get it - if you are fine paying the exact same amount why does it bother you to add that as a tip?

I can understand people that say that the cost of meals are in fact misrepresented because you are expected to tip. But if that is not factor I don't see what makes it so unbearable to add 20%

It sounds like you're under the impression that people dislike tipping because they feel they're paying "more", but the parent post wouldn't make sense in that context.

I am fairly sure that most people don't like tipping they feel that you are being "coerced" to pay more.

If the tipping would be about paying less (i.e. you may reduce this bill 20% if you did not like the service) do you honestly think anyone would complain?

Your second paragraph doesn’t have to do with your first. Your second is asking if people want to get more for less. That would be true in many other examples too.

I’d be curious about the first assumption. I also assumed what OP did. Tipping is annoying for me. I’d rather it just be included everywhere. I don’t like having to think about tipping. I feel like youtube comments are the sort of place I’d see a lot of people think they would actually save 20% from no tipping being a universal thing.

The system is great right now if you want to save money. If you’re not going to a place again in the next year. Tipping will not benefit or hurt you in any way since you’re skipping the tip at the end. And if you don’t care about the server’s financial well being, then this won’t matter to you.

Tax is paid, and there's no longer unfair discrimination due to age or sex appeal of the waiter.

Assuming typical 15%-20% tip, from where comes the double price for the breakfast?

So the choice is 15-20% tip or double the price? That doesn't add up.

a) That's not a business, it's a bait-and-switch scam. b) Non-tip countries have many restaurants.

a) so something you know is the switch for the past 50 years or more is somehow bait and switch?

b) Of course non-tip countries have many restaurants. The prices are also much higher. I've traveled extensively around Europe and places that have no tips..and the meal price is much higher.

It would be more constructive if you would apply mathematical reasoning to your post and come back.

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