Should tipping be outlawed?

Tradition. Things are done a certain way because that’s the way things are always done. People don’t question it—until one day someone asks, “Why?” The tradition is challenged, examined, discussed. Then comes the tipping point when everything changes.

Unless that tipping point involves tipping. In that case, apparently, the point refuses to tip. Danny Meyer, who runs over a dozen popular New York restaurants such as the Modern at the Museum of Modern Art and Maialino in the Gramercy Park Hotel, has referred to tipping as “a demeaning practice” and plans to phase out tipping in all his establishments by the end of 2016, but the process has not been entirely smooth—his Union Square Hospitality Group was the target of a class-action lawsuit launched in December on behalf of back-of-the-house employees who claim they were underpaid.

In Parksville, B.C., David Jones had a no-tipping policy when he opened his Smoke ’N Water Restaurant in May 2014. Three months later he abandoned the policy, citing feedback from customers who wanted a say on the quality of food and service they receive. It’s a factor cited by the pro-tipping crowd: “Guests love to be in control,” says Ian Tostenson, president and CEO of the British Columbia Restaurant and Foodservices Association.“They like tipping. Without tips, the business owner will face higher operating expenses and usually have to raise prices.”

Jones now says that dropping the no-tipping policy was really about costs. “Food costs jumped horrifically in the summer of ’14, and I simply wasn’t charging enough for my meals. I raised my prices 15 per cent when I needed to raise them about 25 per cent across the board, which is what Danny Meyer did in New York.” As for customers, he estimates 95 per cent loved the model. “They felt relief at the end of the meal instead of stress in having to figure out the amount to tip.”

The no-tipping policy has been endorsed by the likes of celebrity chef and author Anthony Bourdain, and Jones believes it makes for a more stable career path. Wherever no tipping is found in the world, there are career servers, he notes. People are more likely to choose serving as a career if they are able to make a decent wage of $18-$22 an hour, and there’s improved teamwork—when tips are involved, servers who work three to four hours a shift make a significant amount more than the cooks who work 8-10 hours a day, which creates division and jealousy between front and back of house. No other business or industry allows their employees to control 18 per cent or more of the company’s income with the company having virtually no say in how it is distributed, he points out. Nor does the system benefit servers, he believes. Banks categorize them as commission sales people so getting a loan for a car or a house or a credit card is difficult if not impossible.

Yet workers love tips, says Ian Tostenson. “It’s their incentive. A good server can earn $200-$300 dollars per shift. That’s $40 an hour over six hours, not including the hourly wage. Even if the tips are half that, you still have an effective rate of 20 dollars per hour plus wages.” Mark von Schellwitz, western vice-president of Restaurants Canada, agrees. Servers are motivated by tips and make a very good living from their gratuity income, he says. He believes many career servers would no longer be willing to work as servers if they couldn’t earn tips even with a higher wage, making recruitment and retention of good servers more difficult. “Based on Smoke ’N Water’s short-lived experiment with a no-tipping policy, it does not appear tipping culture in North America will change dramatically anytime soon.”

But Jones says he’d like to try again. He still believes no tipping is the way forward, especially in the new world of a $15 minimum wage. Since Portland, Oregon, approved a higher minimum wage in February, he expects more restaurants there to switch to the no-tipping model. “It’s the only healthy and functional business model for the industry,” he says. “I’m giving some real thought to having another go with it, especially if a few other restaurants in the province would jump on board. I would go back in a heartbeat.”