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>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.

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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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