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Comment by eweise | Hacker News Reader

This is the same as what restaurants do now. They started charging a "service fee" or surcharge. You might assume those extra fees are for the workers but it goes to the business.

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And this is why I will never understand why many think tipping is a practice upheld for the benefit of the restaurant. Cash in your hand is always better than cash in someone else's hand.

It's for the benefit of the restaurant, because it given them the opportunity to disown the responsibility to their workers compensation.

While that might theoretically be a benefit, it is one not realized. I have never seen a restaurant not hire staff as employees, as opposed to leasing the space to independent contractors, which means that the restaurant is on the hook for their compensation.

Perhaps you are thinking of strip clubs?

The minimum wage is lower for workers who receive tips in most states. Restaurants can pay this lower "tipped minimum wage" and save money.

There is no realization of higher profit margins, though, which means that restaurants operating under that model also have to reduce their income in order to "save" on wages.

So, while a fun distraction, we're right back to you thinking that money in someone else's hand is better than money in your own. What is your rational? Conventional wisdom says that there is leverage in increased cashflow. Why is the conventional wisdom wrong?

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