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Comment by smnrchrds | Hacker News Reader

No, they did not. It is more accurate to say two restaurants in Toronto just mandated 18% tipping:

>Tips will still be split between front and back but Ten will now be "adding a flat untaxed 18 per cent service charge onto each bill no matter the size of the group,"

The more sensible thing would have been to increase menu prices by 18%. But they are not being sensible. They just increased their prices while pretending they have not done so. I hate it when you have to treat a menu like a legal document and be looking for the fine print.

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Covered in the article: "To me it really doesn't seem like too radical of a change, my hope is that after people get comfortable with this, we will be able to scrap a service charge completely and just increase our menu prices by 18 per cent and then pass that 18 per cent into higher salaries for all of our staff."

I hope it catches on.

Urbanite restaurant-goers aren’t so price sensitive that they can’t handle a price increase from $20 to $22. I think they’re doing it this way so that if it doesn’t work out, they already have the previous infrastructure in place to return to tipping if need be.

and while we're at it, include the taxes!

I think separately listing taxes has the benefit of transparency - you know how much the government is taking and can make more informed electoral decisions.

I wish they made it in LCBO reciepts, so we could see that sweet almost 100% tax on alcohol.

With a single Federal Goods and Services Tax (GST) as in Australia, you know it is 10%. All prices include the GST and are the price you will pay. There are no other sales taxes. Everyone knows what the government's cut is. Everyone knows how much they are actually paying. I can't see why anyone would want a more complicated system.

Clarification: Many "essential" goods like simple foods are GST exempt. They will be marked as such on the receipt. Again, the price on the shelf or box is what you will actually pay. There are no hidden surprises.

Though there are still some special cases where they sneak in extra taxes - stamp duty on houses and import duties on cars for example.

Is it 10% in all states?

In Canada, the provincial sales tax differs in each province. The federal rate is 5%. Alberta has no sales tax, whereas Ontario charges 8% (post-harmonization it's a HST of 13%).

In the US, the sales tax differs not only by state, but by county and city.

The tax situation in Chicago is particularly bizarre.

The sales tax in Cook County, where the city of Chicago located, is 10.25%. The sales tax one county over (say Dupage County, 15-20 miles outside the city and still part of the greater Chicago metropolitan area) is 8%.

Restaurants in the City of Chicago (but not other parts of Cook County) charge 10.75% because there's a city-specific restaurant tax.

The different tax rates create strange arbitrage opportunities. If I buy an iPhone from an Apple Store a few miles outside Chicago, I get an automatic 2.25% discount.

I wonder why does harmonization always infer a higher tax than the previous one. If we'd had harmonized VAT in Europe I guess it would be like over 20% and those with 19% or lower would end up paying more.

The harmonization in Ontario is more like combining the 5% federal rate and the 8% provincial rate into a single combined rate of 13%, so there’s no change in this case.

The 10% tax is at the federal layer in Australia and is the same across all states and territories.

FWIW, Canadian taxes are similarly quite uniform within a province.

Canadians also have a Federal GST, and provinces add their own tax, which gets added together into one Harmonized Services Tax (HST) in all provinces but Quebec and British Columbia, which have their own rules (QC collects an additional Provincial Sales Tax (PST))

Of course, there are fun additional taxes as well like the Environmental Handling Fee (EHF) on electronics.

In the US, there are different state, county, and local taxes depending on your location. There is no way to memorize a single number and have it be correct everywhere.

Not sure why this got downvoted. Absolutely you should know what you are paying so you can make informed electoral decisions.

You can't assume "everybody" knows.

That restaurant would def go on to a mental ban list. I hate when they do that. It’s like an extra sales tax. I want the total number, after all of the fees.

A true place I know that banned tipping is Crew Collective Cafe in Montreal.

It’s the same group that started crew.co and Unsplash.

> The more sensible thing would have been to increase menu prices by 18%.

That would not be sensible because when people are comparing restaurants they will appear 18% more expensive than an identically priced competition when they aren’t.

> I hate it when you have to treat a menu like a legal document

I don’t know why you’d need to. I’ve travelled in Europe plenty, where restaurants charge a service charge. It’s right there in the receipt. I don’t know why this would be any different.

> It’s right there in the receipt

That's the main issue with it. It should be on the menu, on every page that contains prices. Once it's (only) on the receipt it's too late to pick another restaurant. In Europe they're required by law to list it.

18% price increase during a pandemic? Wow. They have it in Hungary too, but it's 8% as far as I can remember, not 18%. But we didn't mind as in Budapest the service and the food was almost always excellent, even in a bar that served mainly cocktails but had some easy dishes so that the customer doesn't leave the place if they're hungry.

I don't like service tax. If you don't like the service you have no other option but to pay it. With tips you would just not tip and walk away.

It's not 18% price increase though. People normally already pay tips just not a fixed 18%.

People normally pay tips for a good service. Making tips mandatory provides no incentive to provide a quality service. If the service quality drops - customers will go elsewhere.

Every other service business that isn’t a restaurant doesn’t have tips and they seem to be doing fine. What is it with restaurants that makes workers only provide good service because of money? Do food service workers not have any intrinsic motivation to do a good job?

>People normally pay tips for a good service

People in the US and Canada (where this article is about) pay some tips unless they're pissed. I'm not saying this is ideal, just what it is according to my experience.

Again, the topic is about if this is a 18% price increase. My point is compared to the common practice pre-Covid, it's not. I have no argument about if it's going to decrease the service quality or not.

>If the service quality drops - customers will go elsewhere.

Wouldn't that be incentive to provide good service?

I ask because some of the best restaurants in the world do not expect you to tip - ie. Danish restaurants Noma and Alchemist.

I was talking about the North American model where staff are paid basically nothing and they live off of tips.

Europe is another story. Tipping there is not expected. And staff are probably decently paid.

It really depends which part of Europe you are talking about. In Eastern Europe and South Eastern Europe one is expected to tip and tips are typically 10-15% of the bill. In Greece you might also get rewarded if you visit the same joint more than a couple of times and tip. In Nothern Europe and Western Europe it's a different story, but meals are also considerably more expensive. In Central Europe and Southern Europe the staff doesn't expect tips but they will be quite grateful if you do tip them. Some places have a fixed service tax as it's the case with Hungary some have a sit down charge as in Italy (< 3 euros) but it's nowhere near 18%. Some enable you to tip a variable amount using the POS such as it's the case in the Czech Republic.

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