A Tipless Restaurant is a Well-Run Restaurant? | Hacker News Reader

A Tipless Restaurant is a Well-Run Restaurant?

priceonomics.com

124 pointspyduan180 comments

This is an old article - Jay Porter's tipless restaurant, The Linkery, has since failed. This is my comment from the last time the Linkery came up on hackenews (https://news.ycombinator.com/item?id=6127536):

>Back when I lived in San Diego I took my parents to the Linkery. The service was so bad it actually reversed my opinions against tipping. The servers clearly didn't care much about making us happy, messing up almost every aspect of the order. They put meat in my food - I'm vegetarian. My father got his food 20 minutes after my mother and I did. The waiter forgot one of my drinks. We called over the manager who offered us a free dessert to make up for it. Guess what? The dessert was on the bill. I'm always happy to tip 20+% for good service, but being forced (yes, we asked) to pay the service charge added insult to injury. This is just one data point, but the Linkery was infamous around San Diego for having much worse service than other places in a similar price range. I'm convinced their experiment with tipping was correlated with this.

If tipping is necessary in restaurants to promote good service, why isn't it equally necessary in other contexts? In businesses without tipping, managers have an incentive to please customers, so good managers[1] encourage employees (by various means) to provide good service. Why can't the same be done in restaurants?

I'm not claiming tipping is certainly useless. Just questioning the argument in its favor.

[1] Not all managers are good, and so we encounter businesses that provide poor service. Sometimes the market weeds those out, sometimes not. According to the parent commenter, that's what happened at the restaurant s/he visited.

> "If tipping is necessary in restaurants to promote good service, why isn't it equally necessary in other contexts?"

Maybe it is.

No Tips vs Tips:

  Delivery:
    Package/Letter (no tips): constant missed deliveries.  poor to
                              non-existent delivery scheduling.
                              crushed boxes.
    Food (tips): reliable delivery within the hour.  delivery person
                 knocks on the door more than once.  never found a pizza
                 carelessly thrown into the bushes beside my door.

  Luggage handling:
    Checked luggage (no tips): constantly lost.
    Porter/redcap (tips): the people you go to if you *actually* want
                          your luggage taken care of.

  Service/Repair:
    Cable (no tips): only able to schedule service during inconvenient
                     hours a week in advance, with service windows so large
                     that I need to take a day off work.
    Plumbing (tips/negotiable pay): I have gotten plumbers to my home in
                                    the middle of the night.
    Apartment repair guy (no tips): Ahahahahaha....

The one counter-example that I can think of is cab/uber service. There is a hell of a lot wrong with the cab industry though.

Sounds like bribes to me.

At least in the way John McAffee described bribery and corruption in the middle east.

You know what, here's the example I give you. Please have a look (may not happen in your place but happens everywhere else):

- You have got to get your store's license renewed but there's a huge lag and there are many people ahead line: Pay the officer, problem solved.

- Need to renew your passport: Pay the consul officer, you get it all expedited.

- etc etc

Yes, that's exactly what you are doing. You are bribing them to do something that they should do normally. They will basically keep misplacing other people's deliveries, treat other guests bad, losing others' luggage, making others take their day off, not do plumbing in time, not fix people's flats, while they do yours because you pay them some "extra money".

Rephrase it what you want but we are talking about clear bribes here.

If bribery is necessary for me to receive good service, then I will use bribery. Paying a bribe does not violate my moral code (although demanding one does) so that is not important to me. What is important to me is correctly getting the order that I payed for in a timely manner.

For the record:

Bribery, as you describe it, is alive and well in America. My brother wanted to go to the Naval Academy. In order to be accepted, he needed a nomination. How did he get a nomination? He volunteered for the reelection campaign of one of his senators.

Asking your senators/representatives for help expediting the processing of documents is fairly common too.

Well then I would just say "good for you" and then let's agree to disagree:-)

You can generally offer tradespeople/servers and the like extra money whenever you wish!

That is rather irrelevant. While I could reward the UPS delivery guy of the week with a few dollars, the offer would catch him by surprize. Tips cannot retroactively improve service; they only improve service if you are a recognized repeat customer, or if they are common.

Despite your personal anecdote, I found Porter's 6-part series last summer on tipping in the restaurant industry quite fascinating and enlightening: http://jayporter.com/dispatches/observations-from-a-tipless-...

I remain unconvinced that tipping culture improves service, and it's most certainly sexist, racist, and ageist.

Sorry you had a bad time, but sample size of 1 is not compelling. "The plural of anecdote is anecdotes, not data."

The issue could easily be bad management, bad hiring, etc etc etc.

Apparently that's a misquote and it was originally "The plural of anecdote is data." [1]

Of course more data is better.

[1] http://blog.revolutionanalytics.com/2011/04/the-plural-of-an...

Interesting, but like the author of that post I'm going to stick with "not data". Anecdote usually implies personal experience, which is easily confused and misled.

e.g. I know MANY people who claim to have seen a ghost, but I don't consider that useful data supporting the existence of ghosts. Technically it is data, but it's the LEAST trustworthy form of data, hence the dismissive expression.

The context is different though - the professor is stating that an anecdote is a data point, and plural data points can be referred to as data. Two stories are two datums, pluralised to data.

The "not data" version is saying that anecdotes are in such small numbers and uncontrolled circumstances, that even though they are data points in and of themselves, they're not rigorous enough to draw wider conclusions from. It's a different context.

So, the plural of anecdote is data, and data still isn't information?

I are at the Linkery once, as well, and had an excellent meal & service.

I ate there a couple times, and had excellent service both times.

For what it's worth, I'm another vegetarian who ate at the Linkery (in February 2013), and the service was totally different for me. The servers were nice and friendly, and there wasn't a whole lot on the menu that was vegetarian, but they helped me find something great. I never felt like anything was "off" about the experience.

When I went to Finland, where tipping is forbidden by law, the service we got was on par with the service in other countries - minus some faked flirting, maybe, which is not a loss in my opinion. I think that a system without tips will need time to adjust, so that other mechanisms will be put into place to encourage good service, like bonuses for good waiters, where "good" could be measured with voluntary feedback from customers, via a short questionnaire you get with the bill, for example.

Brazil has an interesting variation on tipping: Restaurants add a 10% service fee, but which is still optional. Therefore, servers don't have to engage in the "parasitic side-business" of generating tips since the service fee of 10% is almost guaranteed, but the customer still retains a mechanism to punish really bad service.

Quoting from the article here:

http://brazilsense.com/index.php?title=Tipping,_fraud,_and_s...

it says, "The service fee when added is still considered optional. However, Brazilians do always pay it — except when the service was poor. If the service was poor, all you have to say is Eu não vou pagar esse (I will not pay that) pointing at the service fee, and then pay just the base amount. I've seen Brazilians do exactly that when the service was bad and it didn't cause a scene."

My criticism of the headline is the same as your experience: just because you're not taking tips doesn't mean that the restaurant management is on top of their game. Running a restaurant is hard, and there's a thousand ways to screw it up.

Here's my anecdote: I ate in a tipping restaurant in Texas. The steak was late, lukewarm, and so small it slid across the empty plate. The only thing accompanying the steak was a pot of mashed potatoes about four times the size of a thimble. After being largely ignored, the waitress at the end of the meal made a ton of excuses while looking at the wall so as to get me to still tip, and zero effort was made to make me feel better about the situation. If we're making sweeping proclamations from single experiences, then this must mean that tipping restaurants make for very much worse experiences.

I don't like tipping culture for all the usual reasons, plus a couple more. I don't like the waitstaff's arms being constantly in my dinner conversation, as they refill water or keep checking how I'm doing. I don't like that in almost every other job you can have a crappy day but still come out of it with the same wage - tipping faults people for being human. Imagine if software devs had a variable rate largely based on how they were feeling that day? I mean, code and design when you're distracted or angry isn't as good as when you're focused and content, so it stands up to the same reasoning. HN would be in furore if a tech company proposed that.

Chez Panisse in Berkeley has been running with a 15% service charge since 1989, and you still have to call a month in advance to get a reservation.

Here's how it works in Australia: - no tips - if your restaurant provides bad service, you die - if your restaurant provides good service, you live

It's as simple as that. You don't get better service because of tipping, and the Linkery was obviously too far out of the comfort zone of the American workers who were used to working for tips.

Don't blame the poor service on the lack of tips until you've seen a number of tip-free restaurants fail and can attribute the failure to the lack of tips rather than poor management, and inexperienced staff.

> The other has refused to accept them, instead charging a fixed percentage service fee.

Why not just show the real price in the menu? I feel offended when I've gotten shitty service and have to pay a "service fee". I also hate when my tip is what's paying the wages. Just set the price higher to cover the wages!

To me, this is what Uber did (one of the things) to car service. I just opened up OpenTable the other day and it appears they're experimenting with the "dine and walk out" model that mimics the Uber approach in a restaurant. That might be as close as you can get to what you want right now.

There was a planet money podcast recently which discussed the effects of including a tax in the price or adding it at the register. Even though the net cost was exactly the same, including the tax in the sticker price resulted in 8% less consumption. While, as consumers, we'd probably prefer products to include the all-up cost in the price tag, from the seller's perspective, it's still in their interest to add it at the register.

I live in a country where the tax is always included in the price, and tipping is not seen as mandatory. So the price on the tag is what you pay. So I may be a bit biased in my "hate" for how it's in some countries, because I'm always taken by surprise at the register.

Yeah, I'm not saying that I like it, just that I understand the motivations involved. On a purely rational basis, it should make no difference (as the end-price ends up the same), so sellers should opt for customer preference, but sadly, we are not fully rational creatures.

And on that note I think part of the difference in reaction is down to expectation. Americans don't like being "surprised" at the register either, but in the case of sales tax and tipping there is no surprise; it is assumed that will happen and factored accordingly. But if you surprise me with a $.99 dessert on my bill that I didn't actually ask for, you can bet your ass I'd raise a problem about that at the register.

It does make a tangible difference in the cash economy though. When the price tag includes tax, the prices are generally set to easy multiples of the currency. Fewer coins to cart around and manage (and no give/take a penny trays). I found it amusing in the US when I went to McDonalds and ordered three things from the 'dollar menu'... and was charged $3.24. I also found it odd that a few Americans, despite living in this system their whole lives, had trouble in predicting their costs at the register.

Here in Australia there's a 10% sales tax, included in the original price. For anything above a few dollars, most prices are whole dollar amounts, and the vendor sets aside 1/11th of the price for the sales tax. What you actually pay is easy to manage and predict, though you get a receipt specifying the tax with odd numbers (due to the 11ths). Go into a supermarket and buy a carton of Foo for $2.69? It's $2.69 at the register.

My gut tells me that this is why Americans are so much more vocal about tax - sales tax is a stone in their shoe. It's addition at the register makes things unpredictable (not to mention any sale that crosses a border somewhere). Here it's streamlined away, and there's no cognitive weight borne by the consumer at all.

What really makes sales taxes fun in the US is that they are variable in many states. If I go to my local Walmart at the start of the school year, some items I pick up may be tax-free because they are considered school supplies and there's a "sales tax holiday", others items are considered "Groceries" and will be taxed at a reduced rate, but prepared (hot) foods, booze, and non-food items are taxed at the full rate.

Then there are the cities and counties that have additional sales taxes.

When I lived in Germany it took me about 5 minutes to fall in love with prices being listed inclusive of taxes.

Amazingly enough, other industries survive. I just bought a bunch of stuff from a deli, and somehow they appear to stay in business without tips.

Tips are just a way for restaurants to displace the risk of paying labor during slack business periods.

This! No customers no tips, cost of running the restaurant without customers is less. If tips as a way of paying employees were ever outright banned I'm sure there are plenty of smaller restaurants that would have to close.

Supposedly tips are common for jobs which rich people didn't do such as cutting hair, taxi, restaurant service.

I know I often tip my butler.

I find that with my household servants a Christmas bonus of passing down our secondhand possessions on Boxing Day is sufficient.

Where is this being practiced? I've been to pretty much every country in Europe in the last 20 years and in a conventional shop the tax (VAT) is always included in the price.

It's common in USA, because there are different sales taxes in different states. So advertised products are advertised without tax included in the price.

Why are the price tags universal across all stores and all states, and centrally produced? Or if they aren't, surely each shop can print out their own price tags and add the appropriate tax then.

Price tags are one thing. The region-wide ads for Kroger saying "milk is on sale for $1.99/gal this week with your Kroger Card" are another. A broadcast TV ad like that might be visible in 10 or more different sales tax areas. Having worked in retail, I have several anecdotes from customers getting annoyed over even the smallest pricing discrepancies. I had one shopper complain about being charged less than the price in the mailed circular on the theory that the chosen product was of lesser quality than the advertised product.

It goes further than that; a county or even a town can have a separate sales tax. You can have 9% in one county, 10% in a city inside the county, or 8% the next county over.

And even beyond that, some governments levy different taxes on different items (e.g., lower tax on groceries), while other nearby governments may levy the same tax on everything.

Further, some governments charge tax on the pre-coupon/pre-discounted price, while others tax only the actual final price.

Further still, some entities like public schools are exempt from paying sales taxes in many states/municipalities. In this case, the price sign would have to show both a pre-tax and tax-included price on it, which may be the best solution anyway.

Regardless, these differences are probably easiest to account for at the point of sale.

A tangential, but this complexity is one reason I think that sales tax should largely be abolished in favor of rolling it into income taxes. The only context it makes much sense in is taxing various luxuries. Beyond that, it's confusing, adds administrative overhead, and discriminates towards those with lower incomes.

I'd almost go so far as to say it's almost universal in the US. The main exceptions:

Gasoline (petrol) is always priced with all taxes included.

If the establishment is small enough that they're not using a register for cash transactions, they won't add tax. For instance if you buy a hot dog from a food cart for $4, that will be the whole price.

But for just about anything bought inside an actual store, tax will be added on.

It's limiting the ability for consumers to compare and it's opening the way for cheating, it's unhealthy for the market.

The advertised price has to be what the consumer will pay. I'm pretty sure some America guy got a Nobel prize in economics for discovering that.

In some states it's required for sales tax to be listed as a separate line item. Gas is exempt from this.

In the planet money podcast, they were talking about how Colorado's new marijuana tax policy should have been implemented, whether the tax should be paid by the grower (which would result in the tax being included in the price) or by the consumer (which would result in the tax being added at the register, which is common for sales taxes in the US).

Their conclusion was that if governments wanted to limit consumption, they should choose a policy such that the cost was included in the sticker price, but if they wanted to maximize tax revenue, then they should collect the tax at the register.

The way I understand how VAT taxes work, it would seem that this would be friendlier to consumers, to the detriment, perhaps, of overall consumer spending.

The way it works in Australia (I think, certainly not 100% sure) is through tax credits. The miller buys wheat from a farmer, and pays tax because it's a sale. But the miller gets tax credits for later selling that wheat to a baker (in the form of flour). The baker pays tax on the flour, but puts tax on the bread. At each stage value is added to the object, and due to the credits, the differential of that value has the appropriate tax.

So if you have a wholesale/retail business, you have an easier time of it - everything gets taxed at the same level, and your clients that onsell can claim their own tax credits. It is the final purchaser of the product that ends up actually forking out for the tax.

It's extremely common in the US. Each state, county, city, different "special districts" can impose their own sales tax. For things like national chains it would be impossible to advertise prices, as one store may be under 10% sales tax and a mile away one is under 15%.

But then what about buying stuff online like amazon? Coming from Europe this sounds very confusing.

They collect sales tax. If you buy from a small retailer out-of-state, you;'re supposed to declare the purchase on your state tax return and pay 'use tax' (ie the sales tax you would have paid if you'd bought it locally).

It's far less confusing in practice. I mean if Americans are as dumb as Europeans assume us to be then surely it would be chaos over here if it were really as complicated as it's made to sound in Europe.

This is because other sellers are printing the price without tax, so the price with tax appears expensive. If all prices had to include tax, then people would get used to it, and the total consumption would be same in the end.

"Just set the price higher to cover the wages!"

For a few reasons.

First the amounts won't end up nice and round at particular hot button price points. ($5 drinks all day!) [1]

Second, the price will have to be displayed higher and in theory this will make it less likely for someone to get a particular dish. If the restaurant could get more money for the same disk in theory they would already be doing that.

Bottom line is the same way that autos are sold (or airline tickets where you now pay separately for baggage) advertising a lower price and having add on's sometimes (but not always) works in your favor in generating sales. Because you are able to price below magic numbers floating around in people's head.

[1] In the same way pricing an item at $4.99 will in general generate more sales than $5.25. (Example not restaurant pricing but to prove a point).

I think the counter argument is that in other places where tipping isn't mandatory or even common, reataurants are still able to do fine.

However, based on my own personal and rather unscientific experience, going out to dinner is less common in much of Europe and restaurants employ fewer front of house staff. So while the restaurants that exist might do fine (or as 'fine' as any restaurant does), there are quite probably less of them and they certainly employ less people.

Which I guess is the real problem. Removing tipping will increase unemployment.

That hasn't been my experience at all--I see tons of restaurants filled with plenty of people in most European cities, and they seem to have adequate numbers of efficient waitstaff.

>First the amounts won't end up nice and round at particular hot button price points

Why? The price is designed to end up that way, if people will have to add 15% on every item they will modify their cost structure.

>airline tickets yes if I want to add a service I pay, but in a restaurant I don't have the option to be served without the waiter, so it's not fair to the consumer that has the right to know how much he has to pay when he orders something.

When a book a ticket the full price is displayed before I make the purchase, not after I used the service.

Also for the waiter lobster and champagne require the same effort of soup and tap water, so it's not like adding a language of 15 or 20 kg.

> Why not just show the real price in the menu?

because the real service costs would be higher than the price of the meal? I have no experience in gastronomy but I guess you pay for being serviced in a restaurant (including table, dishes ...). The 'real' price of the meal is of minor significance.

I meant that the price for an item should have those costs baked in.

Because then you'd need different menus for takeout, in-restaurant, and delivery.

save 15% if you takeout and avoid inflated drink prices? takeout and in-restaurant could still be the same price...

Mildly tangential, but I'm always surprised when people express so much anger about being expected to tip in restaurants (in America, at least). Not people who come from other places where the conventions are different, but people who have lived here their whole lives.

I'm not surprised (and empathize with) people who are reacting to the inefficiency of The System ("why don't restaurants just charge more and pay their employees reasonable wages?"). This is correct, but as others have pointed out, in the US at least we seem to be stuck at a suboptimal local maximum in this area. It would be impractical (and maybe catastrophic) for any one restaurant to suddenly adopt this policy, so that's not going to happen anytime soon.

Rather, I'm always amazed at the portion of people who have a visceral reaction to tipping due to what appears to be just plain lack of empathy. These aren't the people who are saying, "why doesn't the restaurant just pay better?". That totally makes sense. These aren't the people who tip less (or not at all) when they've had a really bad experience with the server. That makes sense too.

Specifically, I'm talking about the people who deep down inside just always have a reflexively negative reaction to directly giving their money to the person who just served them. These are the people who feel happy about themselves when they say things like, "my tips start at 0% and go up from there", or who seem to put way, way, way too much mental energy into grading the level of service that they've received and coming up with a number that reflects that level of service each and every time they go to a restaurant. If anyone posting is that kind of person, please just shut up and start being a better person already. I encounter these people all the time in SV. These aren't poor people for whom the tip is ever a meaningful amount of cash. These are people making many times the annual income of their servers, getting continually worked up over a few dollars, supposedly because of "the principle of the thing". These are always people who have never worked in a restaurant, and are almost always people who never even had a job until after they got out of college. If anyone posting here is posting for this reason, please just get over it and find more constructive things to get worked up over. Ideally something that doesn't directly impact the income of people making way the hell less money than they do.

What surprises me of the visceral reaction of those who say "why doesn't the restaurant just pay better?" is that by that logic you'd still be paying essentially the same price. It wouldn't actually be cheaper if you were charged for food + good service separately, so why are you getting so inflamed about it?

I'm the kind of person who "reacts to the inefficiency of The System"[0], but I also have a bone to pick with a lot of the worthless, inauthentic symbolic "rituals" that most people perform unquestioningly. it's kind of like when people are surprised that a standard way of saying "hi" in North America is "how are you?" even though the person doesn't actually wanna hear it and will be weirded out if you reply honestly.

with tipping, it is simultaneously vaguely some "meritocratic" dimension to the waiter's job, but then it's also basically just a tax, but then it's also a social ritual in which people can boast or be shamed for their ignorance or largesse. I don't like it at all.

All things the same, when some quirk is so inconsequential that people ask why you're up in arms about it, I side with removing the quirk rather than keeping it.

[0] I'd also say this is putting it mildly, almost like a euphemism. It is a way of exploitation that happens to benefit a visible minority of waiters so that the overall impression for those not in the know is one of neutrality. It is definitely a pro-employer law, that dukes the clients against the employees.

> All things the same, when some quirk is so inconsequential that people ask why you're up in arms about it, I side with removing the quirk rather than keeping it.

I used to think so, but now I'm not so sure that social "rituals" are really inherently something to be worn down just because many of us find them hard to navigate.

Social rituals are a side effect of existing in a society with other people and so they never really go away, they just change into other things. As such it's not really a good idea to solve the problem of such rituals by trying to eradicate them, when what we really should be doing is getting better at living in a world with social rituals that pop up and go away. Plasticity should be the goal, and while streamlining rituals can certainly work with that goal, streamlining should not be the goal itself.

> it's kind of like when people are surprised that a standard way of saying "hi" in North America is "how are you?" even though the person doesn't actually wanna hear it and will be weirded out if you reply honestly.

A thousand times this! I've had a lot of personal trouble with the long and drawn out experience of learning that the right answer to "How are you?" is to _lie_ and just say "Good, and you?", regardless of how I really feel.

I'm the kind of person who generally over tips (not that I care about a few extra dollars) and the whole tipping thing is just an annoyance to me. I would rather pay the price on the menu and be done with it. Not to mention it would force the kind of cheapskates/assholes who purposefully give a bad tip to do so. I eat out fairly often, and on the rare occasion where I get bad service/food/whatever management has always offered to comp dessert/drinks/appetizer or something.

Additionally, there is a weird social/emotional aspect to it. I don't want to be "that guy" by accidentally leaving a shitty tip. When I vacation in by place like Germany where tips aren't as much of a thing, I still wind up leaving a larger than normal tip, to the point that a waiter once followed me out of a restaurant to tell me it was too much, because I just feel weird about it. I don't like the societal pressure of it all.

> ...you'd still be paying essentially the same price

Which is exactly the goal. It's not about paying less money, it's about eliminating a confusing, unnecessarily-complicated system. If it were just restaurants it wouldn't be too bad, but I'm still not clear exactly how much/when to tip other service workers (hotel cleaners, cab drivers, whatever). People shouldn't have to do a bunch of research[0] to try to figure this stuff out.

And I grew up in the US. I have friends in NYC who moved here fairly recently, and of course it's much more confusing for them. We should ensure every worker is getting paid decently, and have tips be a truly optional thing for exceptional service, which I think was the original intention.

[0] - http://waitbutwhy.com/2014/04/everything-dont-know-tipping.h...

It makes me angry because it's disrespectful to the worker, and sets them up as some sort of quasi-independent contractor. It also makes me angry because it conceals the actual price of the meal, but that makes me less angry because eating at a restaurant is a luxury anyway.

I always tip 20-25%; my anger isn't that servers need to be paid, it's that they're not allowed to depend on it.

i'm one of those guys - i would love for the servers to get my money; i just very strongly dislike being the one who gives it to them directly. i have settled for leaving a 20% tip regardless of service, which at least feels a bit more like i'm paying a service charge rather than tipping.

Huh? It's bewildering for me to read this.

I'm on the other side on this issue (I don't agree with the norm of American-style mandatory tipping). What you describe as the reaction of people against tipping is the reaction I usually see out of people who are for tipping.

When I voice my opinion against tipping, I immediately get inflamed reactions, I get called "cheap", I get told I'm a "terrible person", etc. etc. People on the other side in my opinion are usually more well-tempered.

To be clear, I am only against the culture of quasi-mandatory tipping. I'm all for all workers being well-paid.

The problem with tipping, as Porter describes, is it inevitably promotes racism and sexism. If you have waiter friends, maybe they've told you about "Canadians"? As it turns out, black families usually don't tip (or tip very little), and white males usually tip a lot. What ends up happening is waiters fight to get the tables with white males, and adjust their service for each (better service for while males, poor service for black families). See http://www.fusionmagazine.org/racism-in-restaurants-2/ for more.

Instead of having a culture of mandatory tipping, just going with fixed service charge for dining in makes a lot more sense.

>As it turns out, black families usually don't tip (or tip very little), and white males usually tip a lot. What ends up happening is waiters fight to get the tables with white males, and adjust their service for each (better service for while males, poor service for black families).

And that creates a feedback loop. It is absolutely true that black people generally tip less, and that waitstaff generally seat them badly and give terrible service. Even black waitstaff get caught up in it with experience. Tipping is the problem here.

I hate the idea of implied mandatory tipping.

Pay your staff sufficient wages please.

Whatever laws allow the below minimum wage loophole should be eliminated or overwritten, or whatever you do to laws to make them invalid.

"Pay your staff sufficient wages please."

In theory means that expenses go up and restaurant then need to charge more on the menu which will in theory result in lower sales and profit (see my other comment).

The amount the customers pay should stay the same, unless the service is excellent, then a tip would be given to the wait-saff.

Unfortunately the mindset of required tipping won't go away anytime soon.

It's not going to happen until the laws that allow below minimum wage pay are abolished, then wait a few years for people to get into the habit of tipping primarily for quality of service.

If there aren't enough customers that are willing to pay the "higher" cost then there doesn't need to be that many upscale restaurants. Sometimes I'd prefer to save a few dollars and walk to the kitchen window and get my own food.

If the profit margin is that low for restaurants then they either need to go out of business or reduce expenses, having hidden fees (tips) isn't the answer.

The amount the customers pay would stay the same.

But you will get fewer customers because people react more to the up-front price than the future final price. People tend to look at the price of he entree and double it, reflecting the additional cost of a starter, drinks coffee, etc. Only in fast food restaurants do people go in with a clear expectation of paying a specific amount.

If the profit margin is that low for restaurants then they either need to go out of business or reduce expenses, having hidden fees (tips) isn't the answer.

Most restaurants don't make it to the age of 2. It's already a hyper-competitive business because dining at restaurant A is not a straight economic substitution for dining at restaurant B. People have strong and sometimes irrational preferences about where they dine.

"having hidden fees (tips) isn't the answer."

Tips are not hidden fees. In fact if the tip isn't included as part of the charge it isn't even legally required to be paid either.

"The amount the customers pay would stay the same."

If a businesses expenses go up then their profit goes down. So they either have to accept less profit or they need to raise prices. Please explain another scenario. I'm not talking about some outlier where something else out of the ordinary happened for some other non duplicatable reason. Or how a particular business may charge less than another because they make it up on volume. (There are many particulars to why a business might operate at a different cost structure (location, suppliers as only two examples).

"Sometimes I'd prefer to save a few dollars and walk to the kitchen window and get my own food."

Ok I see where you are going with this. Have you ever seen what others prefer to do and how actual restaurants operate? It seems that most people don't prefer to "walk to the kitchen window and get their own food".

Well, in the UK this is how every good restaurant operates. Waiting staff get paid a working wage and don't rely on tips to get by - tips will be considered an added extra; something nice to have.

Surely that means it's a cultural thing rather than a business thing?

Businesses will typically operate with the standards of what other businesses do wherever they are located.

As such it could be out of the question to do it for another way other than whatever the legacy established standards are.

So what we are talking about is hypothetically changing behavior that people already expect in their country or community. And not only that doing it individually since it is unlikely that a law would be passed for this.

For example if I am the only restaurant in a certain area and I charge $35 for lobster "tip included" what I am saying is that less people will buy lobster than if it is priced (at an equal place) where the lobster is priced at $29 because $29 is a more attractive price "on the menu".

I think from my exposure in the business world it is pretty much well established that people respond more favorably to a low price than a high-er price as they aren't not able in their head to either compute the total price or somehow a higher price is just a turnoff or other psychological reasons.

If you study advertising you will see this. Not that there aren't places that have done well by not breaking out charges (all inclusive resorts for one thing or cruise ships as another). But speaking of cruise ships they now offer other restaurants where you pay more for the food and for that matter they charge for drinks. And also you don't tip (on the ones I have been on) you pay a daily fee. But note that the daily fee isn't included in the trip cost when you do research but shown as an "added cost" elsewhere in the advertising material (same with some hotels for that matter)

>For example if I am the only restaurant in a certain area and I charge $35 for lobster [...] //

It's strange but in UK we also have restaurants that add a fixed service charge to bills. There's a note in the menu saying "a service charge of 15% will be added" or something like that.

Those sorts of restaurants are often already the most expensive; and of course it's a ruse to keep the apparent price low. The "service charge" is just creative accounting though, the servers just get paid as normal, it's really just a part of your food-bill.

Why do you find it unlikely that a law would be passed to force restaurants to be included in minimum wage laws and so actually have to pay reasonable wages?

Also when you charge $35 people consider your lobster better, even if it's just a comparatively inflated price.

I think that this is missing the biggest critique of all - it doesn't make sense to allocate 15-20% of the payment to something that is only like 1% of the value you're receiving.

The real value in going out to eat, in roughly decreasing order of importance:

- The quality of the actual food and drinks that you consume.

- The convenience of not having to spend the time and effort to shop, cook, and clean.

- The atmosphere and joy of "going out" (with your friends).

- The fact that someone takes your order and brings your food to you.

There's no way that the fact that someone takes your order and brings your food to you consists of 1/5th of the value of your experience. An efficient market should then adjust to this by offering the option of not tipping, having all the consumers go to that restaurant because it's a better value, and then the other restaurants would have to adjust.

Unfortunately, this doesn't happen, probably for a variety of reasons.

1) People don't have enough information when choosing where to eat.

2) There are biases where people don't really consider the cost of tipping when they consider the cost of going out to eat.

3) People have gotten used to it, and "don't mind" tipping.

I disagree. Good service is a pleasure to receive, and adds a lot to the value of the experience.

When your water glass never gets quite empty, and the flat bread never quite runs out, and you're not sure how that happened because your conversation was not interrupted, and your food arrives hot and when you look around to get the bill and it arrives just like that. When service is really good the restaurant feels like magic. That's worth a lot.

Have you ever run a restaurant? By what crazy math is staffing only 1% of the cost of running one? (Keeping in mind that tips aren't just going to the your main waiter, they're also distributed among busboys and other customer-interacting staff.)

He didn't say that the waiting staff is 1% of the cost. He said that being waited on is only ~1% of the value the customer is receiving, since the waiting experience is much less important to the consumer than the food quality, convenience, or venue.

Even if the service is not part of the experience, bad service can easily ruin it. If you need to wait several minutes before someone gives you a menu, then you need to wait another 5 minutes before you can order and then again you wait another 5-10 minutes before you can pay, that pretty much ruins the experience. This is quite common at casual restaurants here in Germany and annoys me every time, especially in the first weeks after returning from a trip to the US...

Seems like you're ranking these by the value to you, rather than the cost of providing them.

There's no way that the fact that someone takes your order and brings your food to you consists of 1/5th of the value of your experience.

Yes there is. I enjoy being waited on and a good waiter makes a big difference to my enjoyment of the meal, plus I know some of that tip is getting kicked back towards the kitchen and cleaning staff. I used to work as a cook and quickly pick up on whether a restaurant is a nice place to work or not.

> The real value in going out to eat, in roughly decreasing order of importance:

I'll just note that you mean the "real value of going out to eat, in my opinion". Because there's no way I personally would put "food quality" at the top of the list over "atmosphere of being with friends". I'd even put convenience over food quality, otherwise fast food would dry up overnight.

So even if there's a lot of value in having your order taken, food brought to you, water refilled... let's think like entrepreneurs - can this service be provided for less money? If so, then you can charge customers less, giving you an advantage.

Ordering - there could just be a tablet with an app that lets you see the menu, answers all your questions, shows you pictures of the food and nutritional info and stuff, and lets you order when you're ready.

Water refills - just provide each table with a pitcher.

Bringing food to you (and other things like condiments) - One option is to still have servers bring it to you. But it would cost much less because the ordering app lets them be more efficient with their time. Another option is to have the tablet alert you when your food is ready, and you can go get it.

> it doesn't make sense to allocate 15-20% of the payment to something that is only like 1% of the value you're receiving

Not quite true. A good server not only takes your order and brings your food, but they also act as quality assurance on your behalf, which provides a lot more than 1% of the value you are receiving. Furthermore, despite the misinformation in the article, most restaurants do under the table tip pooling among employees.

The premise of the article may be valid, but the author's top source is not sound. The piece quotes Jay Porter extensively and links to his blog post. Jay Porter is a failed restaurateur whose restaurants have all shut down [0] [1], not a source to be trusted on the subject of well-run restaurants.

[0] http://www.yelp.com/biz/el-take-it-easy-san-diego [1] http://www.yelp.com/biz/the-linkery-san-diego

I found his blog posts to be well-argued and sourced. I think they stand on their own even if his restaurants weren't ultimately successful.

The high failure rate in the restaurant industry means these businesses could have failed for entirely stochastic reasons unrelated to Jay Porter. If 80 of all restaurants fail, then he's got to start 8+ before we start to find out if he's the common denominator.

That's not how probability works [0]. Say we assume a more realistic 40% success rate figure [1], given Jay's 2 trials:

Probability of 1 success:

(2 choose 1)(0.4^1)(0.6^(2-1)) = 0.48

Probability of 2 successes:

(2 choose 2)(0.4^2)(0.6^(2-2)) = 0.16

0.48 + 0.16 gives us a 64% of at least one of Jay's restaurants succeeding.

So the odds were in fact in his favor.

[0] https://en.wikipedia.org/wiki/Binomial_distribution#Cumulati... [1] http://www.businessweek.com/stories/2007-04-16/the-restauran...

My apologies! I'm a long way out from stats class now, but I've been doing some light A/B testing so I've been thinking about things from the perspective of statistical significance rather than simple probability.

So with that in mind, only having two trials, can we really determine a deviation from the norm? The odds were in his favour (slightly) but not so much that we can say with any certainty that he or his tipless restaurants were the issue.

I'm rusty on the math or I'd actually calculate statistical significance (p value?) of 2 tries 1 success vs two tries 0 successes. I suspect it's below 95% though.

I agree we should not draw any conclusions from my arithmetic above. I just couldn't resist the opportunity to correct someone's math on HN :)

You're still trying to draw conclusions from a 2-sample almost-even-odds outcome, which we really can't.

I was struck by his quote: 'The other reason we didn’t accept tips was that removing any option for tipping was the only way to remove those two parasitic businesses — the side business between the server and guest, and the side business between the server and cooks — from our own company.'

So he sees tips as a drain on his income stream.

This article is very poorly written, and many of the points made in it are unfounded or irrelevant. I completely support abolishing the practice of tipping, but using bullshit arguments like "it's un-American" and "Economists don't get it" don't lend any credence to your stance on the issue. The only point that directly cited actual data was the first point. This article shouldn't be voted up as much as it is.

There's nothing that grinds my gears like that blank tip line staring back at me when I pay for my takeout or counter order. The soured rapport is palpable when I hand back the signed receipt and the cashier glances at the striked-out tip space. It leaves an unpleasant taste in my mouth after what should have been a simple transaction. Ugh.

Perhaps you should tip. You may not like the system, but if it ruins your day it's probably worth paying just to keep yourself happy and optimistic.

Not to mention the person you just declined to tip is likely making minimum wage or even a "server wage" (lower than minimum in some regions) and depending on tips to make the job worth doing.

I think you are just making that up in your head. I've never tipped for counter or takeout, never heard of anyone else doing it either. I don't think anyone expects it. The person still has to look down there, but there's nothing more to it than that.

It is trivial for register software to not print a tip line when the takeout button is pressed, if the businesses wanted to support customers and not press for tips there.

As a dishwasher who makes $8/hr, tips are very important. Mine are based on a percentage of sales, like the "tipout" mentioned in the article. I don't know where the author gets their information or if they have ever worked in a restaurant. Some of the information is ridiculous. In California, everyone is payed at least $8/hr before tips. Tips only add to take home pay.

Without tips, I can't imagine making more than minimum wage. Last night I made $15.50/hr, nearly double what I or someone else would be payed without tips. The market clearing price for a dishwasher is much lower than minimum wage.

I hate when I get takeout pizza or etc and the hostess asks for a tip. I would be more than happy to tip the chef if the pizza is good but that isn't the case. The tips go to the hostess.

Sometimes the hostess shares tips with chefs at the end of the night but still.

I find it annoying that more and more takeout places have a tip jar. How much are you supposed to tip on a sub?

I think the most common answer is "whatever coins you happen to receive as change"

Under $8, whatever small change I have... $0.50 or so usually. Often enough, nothing. After that, approx. 10%.

Why not install ipads in the tables and do away with waiters? All one needs are food runners. Pay them normal working rates so no tips needed, even for them.

Yeah tablets will be great at providing anything other than dry facts about the food.

At least 40-50% of the times I go out to eat I have just a vague idea what I want and it is up to the waiter to match my desires with the menu.

Just to prevent shrieks from the chefs that lurk here - I never do special requests on the tickets but sometimes a person needs a guidance trough the menu.

You are describing a very high end dining experience.

In most restaurants the server "recommends" the highest margin item (bonus commission) or whatever they like or is easier for their friends in the back to prepare. It's dinner, not a bespoke ball gown.

This will probably happen eventually for lower end places. Middle and higher end places I suspect already rely on service staff to differentiate themselves. Either by being friendly, helpful, and knowledgable, or by being a draw for other reasons. I'm sure you can think of at least one restaurant in your area renowned for it's young, attractive, flirty female staff. People who dine out are often doing so for a chance to socialize a bit... talk about wine with a knowledgable waiter, etc. not just dink around on an iPad.

"People who dine out are often doing so for a chance to socialize a bit"

Agreed, though dining with others also allows them to (socialize).

I experienced this at a sushi place in Japan, before iPads or even modern smartphones existed. Each table had a touch screen device where you could browse the hundred our so different pieces. We would select what we wanted and a waiter brought it a couple of minutes later. When we were finished the waiter swiped each stack of empty plates with an RFID scanner to determine the price for each person. One could also order from a regular paper menu or pick plates from a conveyor belt.

Indeed. Perhaps someday the dream of eliminating all human interaction can be achieved.

socializing with friends at a restaurant obviously makes your 'dream' impossible

That's one thing I never understood with the US. When you need a haircut, or you want to take a cab, or go get a drink... you always have to tip. Whereas the tip should be something you want to give to show appreciation.

So every time I went to the restaurant, I knew that the prices displayed were NOTHING like the prices I'd have to pay in the end. They would add taxes and if I didn't tip I would be seen as an asshole.

I'm more annoyed with the normalization of tipping for behind-the-counter service.

I agree with you. You scooped ice-cream for me and you want me to tip you? The gall of some people is just too much. Why should I just give you money?

This is why the rest of the world hates us in the tech industry. We get to sit in $1,000 chairs, which we easily justify, and in offices where catered food, massages, game rooms, etc are common. Yet you want to complain about the tip jar for an extra $1 that you've already made in the time you waited in line, for the ice cream scooper who has to stand on their feet for 8+ hours and may be lucky to get a bathroom break during lunch rush, and is going to make less all day than you make in an hour, all while they are just trying to mentally study for their econ 101 exam tomorrow.

It's totally the people making minimum wage working the counters who are happy for an extra $20 per day that have all the gall, not the tech industry folks making six figures complaining about spending a couple extra bucks per day on tips.

Yep, my tipping habits cost me maybe a few hundred extra dollars per year? But to the worker just that extra dollar or two might make their entire night.

Considering the free-market slant of HN, these comments are remarkably obtuse. Let those who do not care to tip choose any of the countless options where tipping is not involved. The rest of us who tip will continue paying a bit more and getting a lot more in return.

Tipping makes my life easier and more enjoyable, and continues giving returns, for a very small investment. Compared to the $1000s (millions?) thrown away on kickstarter-startup life-improvement possibilities, tipping should be an easy choice.

The counter argument is you are enabling an abusive work environment by coluding with the employer to get away with paying thier emploees less.

Well, yes, once you accept that they are your inferiors you might even feel good about giving them a little charity. As a European, having to get into that frame of mind is probably the worst part about America's tipping culture.

I believe it is rather a European thing to think that providing service to others is demeaning, instead of just being thankful for the waiter's service.

In Europe it's neither demeaning not something to be thankful about, it's just someone doing a job. It's tipping that makes it weird.

I don't live in the US, I live in a third world country. Instead of customers having to bear the weight and 'tip' - restaurants should pay people actual liveable wages.

> Instead of customers having to bear the weight and 'tip' - restaurants should pay people actual liveable wages.

Third world or not, customers would have to bear that weight either way. Restaurants can't pay people 'actual liveable wages' without recouping those costs from the customers in the first place.

I worked food service in the early 90s. I remember a discussion coming up about a local eatery that started emulating Starbucks with the tip jar. We all found it incredibly rude.

When you work behind a counter you don't get paid via the weird US minimum cash wage/tip model. You get a full wage (at least in my experience). The idea that a full wage worker should get tips as a matter of course is strange to me. I wonder how young the defenders of this practice here are.

My upvotes indicate there are people who agree with me, but not many have said so in these replies. Try to look at it from the perspective of someone who grew up in a world where this wasn't normal.

In the case of table side food servers, tips are not charity. They're a customary component of the wage - wether anyone likes this or not - and that's why the government carves out special exemptions and tax rules for that case.

Well, I love leaving tips. Leaving a five dollar tip for a five dollar sub is the highlight of my day. I love that my tip goes directly to people at the bottom of the totem pole, and that more often than not, not even Uncle Sam gets a cut.

If I am feeling poor, I pack a lunch, I have dinner at home. If I eat out, I do my part to improve income distribution in America, while routing around rent-seeking intermediaries. You can too.

And you don't even create a service charge, you just include your staff costs (and your taxes while you're at it) in your food prices. What's written on the menu outside the restaurant is what you pay at the end of the meal the customer can shop around comparing the prices (like deciding between 2 restaurant, but also between a restaurant and a movie), and your market is healthy.

In America I generally tip pretty well regardless of service, just because in some states their pay is so low. In some states when you receive tips, you can be paid as low as 2.xx$ an hour. Which should be against the law.

In Germany a tip is not percentage based, but usually only 1-2€. But pay tends to be a little better, everybody has health insurance , sick time and vacation.

Your pay with tips has to be above minimum wage. I'm not even sure why they have that lower minimum wage for tipped employees, since it's pretty pointless.

You can thank the "other NRA", National Restaurant Association; employs 750 staffers and spent nearly $4 million on lobbying and campaign donations in 2012 alone.

http://www.huffingtonpost.com/michele-simon/national-restaur...

>In some states when you receive tips, you can be paid as low as 2.xx$ an hour. Which should be against the law.

But if the server doesn't make at least minimum wage, the employer has to pay the difference. So it already is against the law.

Of course in reality, if that server doesn't make at least minimum wage in tips and tries to claim it from their employer, they'll simply get fired.

I've had plenty of server friends who've had to do this and didn't get fired.

In larger companies where payroll is handled by software, they'll do it automatically.

>In Germany a tip is not percentage based, but usually only 1-2€.

What? 5-10% is the usual recommended amount. See Wikipedia [1]

[1] https://de.wikipedia.org/wiki/Trinkgeld

I always tip a reasonable amount (15 to 50 percent) because it's what Americans expect and I've already factored it in.

One thing that bothers me, though, is the view that's prevalent among wait staff (if reddit posts by them are to believed) is that black people and Indians don't tip. Well, the tip comes after the service.

No person is going to provide equal service to a perceived good tipper and a perceived bad tipper. If, after providing inferior service, they receive a bad tip, it just reinforces the view. If they get a good tip, it is too late for me to receive good service.

Well, they'll still get the tip, but it makes me seethe when people say that.

Tipping in Canada prevents you getting rude reminders from staff. We Brits find it truly baffling having to leave 50c-$2 for a drink you fetch yourself from a bar.

Canada is all smiles and great service (sincerely) until you forget to tip.

A great (for the owner) side effect of tipping is it allows restaurants to remain open even during times they are slow (weekdays, off-season) by passing much of the financial burden to the waitstaff instead of the owner. Otherwise hours would probably be much less convenient for the customer. This may not be the case in a large city but in smaller towns the weekday shifts are also a rite of passage to earn a good night where you can make some money.

I feel like there's a business opportunity here. There is a large group of people who don't want to think about tipping, and would always just tip 20%.

Could a payment system or card do this automatically? Or perhaps legally signal to the server that they should take 20%?

This doesn't seem impossible, and I think the idea has a reasonable market.

Tipping extra sometimes encourages behaviors that are materially detrimental to the business itself. This effect is pretty well known in the industry, so I can't imagine many restaurateurs would complain if tipping were universally ended for everyone. But are restaurant owners ready to start employing servers and bartenders on professional terms?

The article alludes to the practice of tipping out the bussers and dishwashers, but is a bartender more or less likely to do that with a $60-80K salary? Maybe the back of the house could see a percentage of sales instead... Or just food and wine, but not cocktails. There are really too many corner cases and caveats to work through up front, but if this becomes a trend it could open new opportunities for POS providers who might appreciate the shot at staying relevant.

OT, an aside, but from when I last ate there ~ 2.5 years ago, Sushi Yasuda was probably the best sushi restaurant in NYC. Maybe Masa, the famous place at $300/head minimum was technically "better" in terms of the sushi you got, but Yasuda was up there in terms of the quality of the fish and preparation, at a much more reasonable price. (not cheap, but not outrageous like Masa).

Yasuda can probably get away without tipping, I am assuming, because the wait staff is probably higher trained and more professional than your average student or aspiring actor trying to pay the rent at the Denny's down the street...

Heck, I now live in LA, and I can't find sushi that good.

Before I even read the articles, here's how it goes:

- Where I live, there isn't a culture of tips. Employees are paid by employers.

- Some employees though, and businesses, delight me. Like I "really" enjoy it there. So I tip.

Look at what happened here: I tip in an environment not used to tips at all.

Tips should be a consequence for delight. Not some thing you do. It's just that I can't help tip people who take care of me (and I'm from that culture). Sometimes, they'll offer a discount and I'll insist on paying the full price.

It happens I enter a shop only looking for directions to somewhere, and the person there goes beyond it. I buy something. It's natural for me.

Now, the very thought of having to tip, as if it is a given, granted thing I have to do, whether the waiter/waitress was good or bad would make me sick.

I understand they are under pressure, but I have seen waiters/waitresses under pressure behave with an unimaginable class and composure. With whom things that would piss you off would magically disappear. They exist, you should hire them. Not some snorky bitch waiter/waitress(yeah, there are waiters who are bitches. It's not just waitresses) who'll treat you like crap, and then have the gall to even expect a tip (I mean, you screw up, you go incognito and pray you even get to keep your job, not ask for a tip and have an attitude).

So I say this:

- Their revenues are mainly from tips and they are not very well paid: It's not the customer's problem what your employer does. But you can delight a patron, and most people who are delighted pay beyond reason for service beyond "normal".

- If you're a waiter and think this is unfair, look around you. I am sure there are other waiters who get tipped regularly and fatly. What are they doing you're not ?

Humans are generally not assholes. If a patron gets treated really well, only a small percentage will be assholes.

I help my friend with his business (car accessories, installing alarm systems, etc) and people just don't believe the length we go to. They just are shocked. They've never seen that. The welcoming, the explanations, the garantees, etc.

I have a friend who sells computers and repairs them (and some other stuff like flash drives, etc). People would drive 30 miles to buy a flash drive from him. They could buy it anywhere, but they buy it from him. People came to him from 400 miles away, because of reputation and service and referrals (his regular clients vary from normal dude, to senators).

Your behavior matters.

I once called customer service of my crappy ISP, as usual, and that day, a tremendous guy answered the phone. This is something I have never seen before. I was literally in frigging bro love with him. I mean, I asked him if there is any way I could like give feedback to his supervisor or something. He treated it with grace saying he was flattered, and he was only doing his job. And no, he wasn't just doing his job: He went the extra 100 miles.

I've eaten in many places. Some places I wouldn't let them keep a 5 cents change because they were cunts. Some places I'd have no problem leaving 30% to even 50% at times because they were simply surreal and treat people like royalty.. Like really, really, really cater to you. And it's no difference of small restaurant, big restaurant, or someone just outside grilling rabbits.

Behavior matters.

Thanks for that, you basically described exactly how I feel about tipping in the US. I'm from Europe myself, and where I live, a tip really is a way to explicitly express appreciation of service, instead of some kind of unwritten rule you have to tip '10% for mediocre service', '15% for satisfactory service' and 'above 15% for outstanding service'. No tip here, basically means 'satisfactory', anything more is considered a reward for great service and I don't mind tipping big at all when the service is good.

I travel to the US every now and then, and recently had a heated discussion about tipping with my (also European) colleague, who insisted on tipping at least 15% even though there was nothing special about the service we received. The premise was that this was considered 'normal' in the US, that we had to 'conform to this culture of tipping', and that it would be considered rude to tip less, say 10%. I vehemently oppose this kind of reasoning, because in my opinion, a tip should reflect appreciation. I'm not opposed to tipping when I'm somewhere where waiters are underpaid and depend on decent tips, but I reject the idea I have to follow some kind of 'table' that says the minimum tip is 10%, even if I get served a raw steak. I'd much rather tip a lot less (say 5 to 10%) for mediocre service, and a lot more (say 20 to 25%) for outstanding service, but apparently, this is 'rude' and 'inconsiderate' according to my collegue.

The fact that the tip needs to be a percentage of the check doesn't make sense to me anyway. If I order an expensive bottle of wine, the tip would have to increase much more compared to when I order a cheap wine. That doesn't make sense at all, it's completely unrelated to the performance of the waiter.

Yeah, exactly..

About percentages, it makes sense, hence my 30% sometimes 50%. It depends on what you order.

What's funny about that is, I live in Algiers, Algeria.. Where a tip is sometimes considered "rude" :D

You'll have to insist, or reframe it as "This is for coffee". But people have a hard time accepting a tip: Everything is included in the price, and I don't want charity.

Plus, there are a lot of things people do for free.. Like you go to a shop to fill your tires with air.. You take the air pistol and fill your tires .. The shop owner doesns't even expect you to pay, because for them "it's nothing". But most people would still pay as a courtesy (notice how it's interesting that they're not even supposed to pay, yet pay).

And on and on, a lot of repairs and all are done and you ask the guy "How much do I owe you ?" and he goes "We're good."

I was on a village once, and there is someone there who carved out from his home and made a toilet available to the public. I used that toilet, and threw money outside to the court of that home, several times. I smile at the thought they wondered "WTH is this ?" since they did it for free, just as a gesture for people to use.

My friends do that, too (free stuff). They "lose" some money but when you think about it, it's only tiny, since they get multiple folds the value from referrals: Those very people who got something for free bring their acquaintances and become sort of "evangelists".

In the US, tips are how most servers are paid. In many cases, their hourly pay is only enough to cover the taxes on their tips. A low tip is interpreted as some degree of insult, up to and including "I am so dissatisfied with the service I received that I don't think you deserve enough money to support yourself".

even if I get served a raw steak

The waiter did not cook your steak. It's his job to try to resolve the problem if you tell him about it, and how he handles that situation should certainly influence his tip.

If I order an expensive bottle of wine... it's completely unrelated to the performance of the waiter

That's not necessarily true. Attempting to up-sell is absolutely part of a server's job, and the convention of tipping a percentage of the bill aligns the server's incentives with the restaurant's profits.

I'm not saying that the tipping conventions in the US are the best way to pay servers, but I will say that to disregard such a convention if you know about it is rude. I dislike the German convention of attendants with tip trays outside almost every public toilet, but it's my understanding that failing to leave them at least 50 cents is considered quite rude, so I do it.

Of a waiter is upselling because they expect ME to pay commission on their ability to overcharge me, the waiter deserves 0 tip.

>> I vehemently oppose this kind of reasoning

When it comes to cultural differences, you sometimes need to put aside reason and simply "do as the Romans do", so to speak.

This article is clearly not written by anyone with service industry experience.

1) Tips are unrelated to good service...good tips are mostly good luck

False, I could rely on 25%+ tip average, and as a server/bar trainer I trained my staff to receive the same, by giving excellent service. Being able to rely on tips for income (as most of the industry does) is by definition not luck.

2) It's un-American

Tipping is a direct way for the consumer to reward and punish a worker or market based on perceived value. If being capitalist is an American trait, tipping is very American.

3) Economists don't get it

Where is the source cited for this? I know plenty of people who work in finance, and tip very well. Professors however, seem to value service workers differently...

4) It’s borderline racist

Because more minorities receive tips? The service industry gives countless minorities and other disadvantaged groups (criminals, drifters, youth) opportunities for employment and advancement not found in any other industry. Most people who work in the kitchen do so by choice, anyone who desires and has people/sales skills can just as easily get a front-of-house job. As a service worker I was generally hired by and reporting to a minority.

4b) "it's usually illegal to redistribute tips among the staff."

False, tip pooling is extremely common between service workers and even back-of-house (kitchen). Only tip sharing with managers is not practiced, because they have higher guaranteed pay and it would be a conflict of interest for all involved.

5) We don’t tip doctors, flight attendants, and any number of occupations where service is important.

This is a personal anecdote of the writer. I tip flight attendants anywhere they still take cash. And a surprising number of occupations are happy to accept tips if you try. Tips don't have to be monetary, they can be free tickets to a show or food or a vice (i.e. cigarettes or alcohol). Doctors don't get tips because of the high pay of their job, but many industries have bonuses provided by the buyer in exchange for a job performed beyond expectations.

5b) [Workers practice tip-sharing] according to a culture called “tipout.” But as this is not obligatory, it is inefficient and can foster cheating, resentment, or worse.

False, and this clearly shows the writer does not have service industry experience. Anywhere tipout is practiced, it is required as a percentage minimum of sales. However, often workers "tipout" above and beyond the required percentage, to anyone and everyone who earned it. In many service jobs your co-workers are like family and you all take care of one another.

Priceonomics usually writes great articles, but this one should be taken with a grain of salt.

And anyone who is an experienced server is so accustomed to the concept that their compensation is nearly 100% tip-based and can no longer discern reality from the tipping model. Nearly all my server friends will consistently tell me about how they game the system, and how little their actual personality comes into play during their experience. In the name of tips, they routinely abandon their principles to earn more. Your replies sound defensive and biased, and, while I understand your motive, they don't really address the underlying issues surrounding tips. If I owned a restaurant, I would certainly not allow them, especially after learning of Porter's results.

Can you provide any detail or evidence to support your third-person personal anecdote? It's a very simple system of good service in, tips out -- there is hardly room for 'gaming' or 'abandoning principles', whatever that is supposed to mean.

how about "this man makes me feel very uncomfortable and constantly makes rude comments at me, but if I keep flirting with him he'll leave enough of a tip that I don't lose money when I tip out the cooks"

No different than "selling out" in any industry. If someone wants to abandon principles for monetary gain that is their choice. In any decent restaurant or bar, if a server feels uncomfortable they can give the table to another server or have them served by the manager. Rude customers are a reality but "we reserve the right to refuse service to anyone."

The thing I take issue with it is when you build a certain amount of abandoning principals into a job that could be done well without abandoning principals. I don't want my server to flirt with me, I want them to be civil, prompt, and helpful with the menu. There are plenty of people who will withhold tips from servers who are civil, prompt, and helpful with the menu because they didn't flirt with them. The tipping system puts power into those people's hands.

Why not simply promote minimum wage and fixed price menu. Even after that somebody wants to tip let them. However that will not be an expectation.

What about the studies Jay Porter links to in his blog posts?

https://www.hotelschool.cornell.edu/research/chr/pubs/tools/...

http://tippingresearch.com/uploads/managing_tips.pdf

I have read both studies. Neither suggest "abandoning principles." Both suggest common techniques for good sales (i.e. calling customers by name, upselling, being personable). This is no more a game than sales in any other situation.

With regards to (4) not sure if there is an argument for tipping being racist, but I know there is a strong one for it being quite sexist. I have a few female friends who work as servers, and a large portion of their job involves flirting with customers.

With regards to (5) a bottle of wine or scotch isn't really the same thing as restaurant tips. You aren't expected to give them every time, and they aren't a part of how they make their living.

With regards to (5b) "tipout" policies seem to be a source of lots of abuse among the places my friends have worked. They are inconsistent, often mean low tipping tables _cost_ them money, and can be a way for upper management to siphon money away from servers and into their own pockets.

4) I think many commenters forget that service is sales. Flirting is common to make a sale and you will see it across all industries.

5) Strawman. This is about tips in all industries as suggested by the writer. People in sales rely on perks in any form, it is definitely factored into whether they take one sales job over another.

5b) I think is a misconception, as stated management does not participate in tipout for this reason.

4) I guess I'd prefer restaurants where the servers were incentivized to be servers not sales people. Certainly that is the way most places try to present their service staff to the customers. When you have to flirt to keep your job, or to keep your job financially viable, that seems... exploitive. Sure, if you want to use flirtation to make a little bit more than your peers, that's on you.

5) the servers I know make a LARGE portion of their money via tips (off the top of my head I'd guess 60-70%). I would be shocked if any sales position had perks that rivalled that ratio.

5b) It's possible you are right. I'm vague on the details, but I know my server friends have lots of complaints related to the fairness of tipouts. I suspect the inconsistent way that tipouts are done means some places _will_ tipout management or other non-server/host/cook positions.

Service is not like sales at all. I'm an electrical engineer, I deal with salespeople ("business development managers") from my employer's suppliers every day. They are professionals, selling complex products to other professionals for substantial salaries + commission. I assure you that people do not flirt while describing the properties of the $1 million STATCOM they are selling.

In most manufacturing or construction industries, salespeople send gifts (on their employer's dollar, not their own) to their regular customers, not the other way around. And that's a professional courtesy, not a way to make a living. I'm talking about sending a box of chocolates to the purchasing manager who does seven figures of business with you annually.

In many restaurants (i.e. family restaurants, chains) the server will absolutely not flirt with you. However, in many restaurants that is part of the expected atmosphere. It is even possible to get a steak at a strip club. Someone has a want and someone else chooses to provide the service. This is the free market.

Almost every restaurant/service runs a "comp tab", servers/bartenders/managers expect to give away a certain amount of goods to regulars and other good customers. Many sales jobs are 100% commission, which is priced into the sale. Tipping just exposes that commission to the customer. In any sale, sometimes commission has to be sacrificed for a difficult customer. The service industry is no different.

How do you manage that? I generally give 15% and I don't think I'm unusual.

In addition to the studies and guides as linked above, the best service tip I can give is to be predictive of the customer's needs.

Listening and reading their body language and providing them refills, extra sauces or napkins, suggestions on obscure wine, recommendations on local activities, the most recent sports scores, or a free item -- before they have to ask for it.

In the case of regular customers this means being stocked with their favorite item or getting their order or preferred table ready as soon as they walk in the door. People's time is valuable and if you can save them time and effort, and make them look good (lots of business deals are done over food or drink), it can be worth 50%-100% or more in tip percentage. There is far more to provide than just food service, good tippers go for the experience. If you know how to provide this experience, the few low tippers are no problem at all.

If you give them a free item just to increase your tip, isn't this ethically the same as stealing from the company? You're converting an asset of the company into dollars in your pocket.

I used to work with a sales guy who would make sales that cost the company more than the final sale brought in. Spend $12k to make a $10k sale? Made sense to him... because he got a commission on it.

As I state above, practically all restaurants run a "comp[limentary] tab", giving free items is extremely standard. All items are marked on the comp tab. Senior servers/bartenders can run their own comp tab, but most staff has to ask management. This is factored into all costs and is used to encourage repeat customers. A repeat customer and good word of mouth is worth far more than a free dessert.

There are many misconceptions about the industry from outsiders. It seems to be making people mad, but this is how the industry works.

I think averaging out all the numbers and reporting service doesn't matter may be missing those rare occasions when the restaurant really does screw up and you want to punish them with no tip. I want the waiter to go work hard and get me the right thing, etc., after a screw up or to know not to ignore my table for an hour. I don't have that option with an enforced service charge.

You can tell the manager why you aren't coming back.

> 5) We don’t tip doctors

Not in Romania and probably other former communist states. Though this is more like a bribe than a tip.

Tipping isn't a requirement for good service. Plenty of countries don't have a culture of tipping and restaurants still exist. Tipping is just a convenient way to dance around the concept of minimal wage and exploit workers, almost to the point of slave labour.

You ever tip the chef? The guy who cleans the table after you? The lady who cleans the dishes? Or the guy sits at the cash counter? Or the guy who opens and closes the door after you? Or the guy who walks around taking everyone's orders?

So why do we start making a noise when it comes to tipping a waiter? Is it only him/her in a restaurant who deserves to make some extra money? Or others are well paid? Well, then why not pay him well too?

I have always found this attitude, that not tipping means you get the service what you pay for, disturbing. This is regressive. The worse are the people who chime in with their moronic "if you can't tip, stay at home". All the good restaurants I've been to, the ones which are famous for both the food and service, offer good food and service and food whether you tip or not. If there's an exception that restaurant needs to have a closer look on its policies and staff.

> We tip barbers and coat checkers along with waiters, but not doctors, flight attendants

You don't tip people who already get paid really well. I guarantee that you would tip your doctor a lot if doctors usually only made $8/hour.

It doesn't matter how much given person earns, I have no idea I don't see his/hers pay slip. You pay for the service if it is good you can pay more, if it is bad you would like to pay less (if at all).

The first time I heard about the importance of tips as a french guy, I thought waiter's only income were tips, so in my brain it implied waiters worked for free unless you give them tips !

At tipping establishments where health insurance is offered it's not uncommon for servers to lose all of their paycheck to healthcare and then have to give the company some of their tips to cover the rest.

This is almost true. The minimum wage laws do not apply to waiters, so they are often paid $2-3/hr.

Las Vegas casino hostesses (the ones that bring you "free" drinks while you gamble) work exclusively for tips.

I've heard that at some high-end restaurants, waitstaff actually pay to work tables, since the tips on the high bills are high themselves.

Mandatory Reservoir Dogs clip: https://www.youtube.com/watch?v=V4sbYy0WdGQ

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