by Ryan Anderes
Who is Danny Meyer? He is CEO of Union Square Hospitality Group. Perhaps, the most respected and successful group of fine dining restaurants in the country. This man knows what he is doing, he excels at his job and he is the creme de la creme of this industry. Mostly, what he says in the way of business models, well it goes! So when he announced last week that his group was no longer going to allow tipping, the shockwaves were felt.
His business model for this change is included here. Over the course of the next year, the group will phase out tipping entirely and present a check to their guests with the only add-on being sales tax. Menu prices will be raised to incorporate "gratuity" fees for the server. In many cases, althought it is still unkown, servers would most likely be paid a higher hourly wage and then earn some sort of commission from their dining sales.
The reasons for doing this are abunant but most notably Danny Meyer wants to eliminate tipping because it can expose the employer to regulatory sanctions and it does perpetuate a big discrepancy between the pay of back-of-the-house and front-of-the-house employees. Our industry is also increasingly looking at ways to determine what duties a tipped employee performs that don't generate tips versus those that actually do. This effort from Danny Meyer puts us one step closer to elminating most of those concerns.
Can it work? I don't know. It certainly would make things easier for the business. Less headaches, less hoops to go through, less to manage from a payroll perspective. It does make sense. But, does it create a better dining environment? Will servers perform high quality customer service, knowing that their wage has already been met before the meal even ends. Will servers do the extra's, pull out your chair, hang up your coat, open a door for you, give you the right of way or even treat you with respect? True professionals, sure they will. Most people have a certain amount of personal pride to do their job well, to the best of their ability. Others, not so much. Your entire dining experience could hang in the balance of what type of person you get to wait on your table. Is that a risk you are willing to take?
It is an innovative idea. One that might just be crazy enough to work. But will it end true hospitatlity. Read here for just one servers take on the end of tipping.