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Comment by hn_throwaway_99 | Hacker News Reader

Feels like we have these tipping articles every two or three months now.

1. Yes, tipping in the US is insane, and it's getting more insane with iPad tipping.

2. No, it's not ever going to go away in the US. There are many, many stories of restaurants that tried to go no-tip (and crowed about it) but eventually had to go back to tipping because (a) the best servers prefer tipping and (b) people will judge you more expensive, even if you're not compared to their price+tip.

3. If you are a highly paid professional living in a major US city, you should tip and tip generously (assuming normal or better service). At the end of the day the difference to you is a miniscule, teeny amount of your salary, but for the server, barista or cashier receiving the tip it's a huge difference.

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Or, simply stop tipping altogether, cold turkey. Let's do that all at once. Tipped professions will turn on a dime and start expecting a living wage, and everything will be fine, just like everywhere else in the world.

When things don't make sense you DON'T need to participate in them.

Tipping is important to many people who already make a solid living wage, it is what puts them in the middle class. I know people that earn $60-70k, some significant fraction of which is tips. It isn't just important to low-wage workers.

An under-appreciated aspect of tipping is that it is a form of wage elasticity in industries with small margins and highly variable revenue. Hedging revenue risk is going to come out of employee paychecks, and tipping allows the employee to take on some of that risk for higher average take-home pay. Eliminating tipping has been tried in bars and restaurants many times in the US with poor results, such that they revert; employees hate it because they would rather have the income variability and higher average income, and it also impacts the quality of their hours.

There are some complex economics going on with tipping that it would be foolish to ignore.

What’s so special about US. Rest of the world is doing just fine right ?

Why does someone need to survive on tips? Why can’t it be part of their base pay?

What I hate about US tipping is that tips are a 15% hidden tax. It’s expected out of you even though the service is terrible. People get legit mad if they don’t get their minimum 15% tip.

The economic structure of tipping is not equivalent to adding 15% to prices and adding 15% to wages with no tipping. It produces different outcomes for employees and they demonstrably prefer their outcomes under the tipping model in the US. Industries with tipping select for employees with these preferences.

Adding tips to base pay necessarily lowers aggregate income for employees in return for less income variability -- it is a tradeoff. Many people who receive tips are not "surviving" on them, their base pay is more in line with median western European incomes, so many American employees can afford income variability in exchange for higher average earnings, and people that cannot afford income variability select industries without it. In practice, this is their preference and it has been tested in the market many times. Every time tipping has been eliminated in the US in a business neutral way, the employees revolt because it reduces their effective total compensation.

Employees have all the power. Tipping being preferred in the US is almost certainly an artifact of the US having higher incomes than most other countries, a much larger percentage of the working class can afford income variability which creates an employment market for people with this preference. The median American has $1000/month left over after all ordinary expenses, which is more than enough to float some income variability if it means they can earn more.

A lot of good points.

I only hope that states can agree on legislature that _ensures_ that they can at least make a livable wage from it.

https://en.wikipedia.org/wiki/Tipped_wage

This is just anecdotal, but I know of a restaurant that pays their workers the $2.13/hr minimum for Tennessee, and they assuredly do not reach TN's $7.25/hr minimum wage with tips.

This place can only get away with it because there's a steady supply of college students throughout the year who are desperate for any job that comes their way; the high turnover rate doesn't hurt them in the least.

You make good points. I wish your posts had a bit more visibility to the folks who hate tipping.

Tipping not only produces different outcomes for employees but it also impacts employers and customers. Even if you raise prices 15% it still won't be enough for most restaurants to keep their entire floor staff. Restaurants will be forced to cut hours and/or staff - this will lead to worse service and more unhappy customers.

And this has been my experience when visiting countries that don't have tipping (primarily the UK). Most of the restaurants are understaffed - there would be a single server covering 10+ tables. And because of that the service was really slow. And slow service is not only frustrating for customers but it is also bad for restaurants (fewer customers = less items sold).

I always get the feeling that the people who hate tipping the most have never actually worked in an actual restaurant.

That's complete nonsense. It makes no mathematical sense and if your business relies on the public's largesse to pay your own employees then your business is not sustainable.

The intellectual backflips people perform to justify this abhorrent, classist performative display of daily piety are a sight to behold.

I forgot to add: wages are tax deductible for the employer.

Absolutely! The only way this will ever change is if the customers decide to just not tip. Yes, in a few restaurants, especially in a big city servers get paid better in tips. But I bet that is not true for the vast majority.

If your only solution involves "let's do that all at once", then it's not a serious proposal.

I am pro tipping (living in the UK). But it doesn't make sense to subsidize/outsource the staff's salary to the customer (via tipping). I respect the people to make and serve my coffee just as a respect the person who drives me to work (bus, underground). I prefer that these people receive a decent salary from their employer so they can also have proportionally large-r pension contributions. Nobody mentions that.

> Yes, tipping in the US is insane, and it's getting more insane with iPad tipping.

Is iPad ordering becoming something common in the US?

A few months ago, I had a layover in Newark (or maybe it was JFK). I was surprised that all restaurants in the terminal used iPad for ordering, there were literally iPad everywhere. The staff didn't even bother to inform me that ordering via the iPad was the only option. Eventually, I ordered but felt entitled not to tip.

Not mainly talking about restaurants, but mainly cafés and places with counter service.

Even if the service isn’t great, b/c tipping is baked into their total compensation, is argue that you should always tip. Only changes the amounts that you tip by.

The thing that's crazy is you hear a lot of people talking about "what's the incentive to provide good services if employees aren't motivated by tips" -- which is it?

Either we've accepted it's a "fuel surcharge" for an airline ticket (as if the fuel isn't part of the price and I'm free to grab my own dishes from the kitchen) -- or it's meant to incentivize behavior. If we pick both, we're not really achieving either.

I wrote a very incoherent sentence there. What restaurants have done is offload the risk of customers coming in to the establishment on to the employee by not paying them a full wage. This is fine in high throughput places, maybe, but many other places it means service workers are making below minimum wage.

So yes, always tip, and tip more if you liked the service.

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