Read an article from the local CBS affiliate in San Fran/Bay Area suggesting that it’s time to change server compensation away from tips. The article mentions that this is an archaic way of compensation.
I remember when I was waiting tables and tending bar the pay was much better than any other job that I could have gotten with my skills at the time. Of course there was always the bad tip from time to time, but overall the good tips more than made up for it and I was able to make decent money. Also I was able to live is some amazing places too. I worked hard for the money, but again for the most part it was enjoyable and worth the effort.
What do you think? Is this something that could happen in the near term? If it did what would it look like? I guess prices would go up 20%ish to cover the extra wages. It would be interesting to see what would happen with service levels without the extra incentive. Although in Europe most places it’s not customary to tip, but I have noticed that the service is a lot slower. That could also be because they tend not to be as “in a hurry” as we seem to be here in the US.
The full article is copied below. Let us know your thoughts.
KCBS News Anchor Stan Bunger offers his unique analysis of an American dining tradition.
When San Francisco Chronicle restaurant critic Michael Bauer speaks, people tend to listen. I’m thrilled to see Bauer call for an end to the practice of tipping in restaurants, but I wonder if his call will be heard by the right people.
Bauer suggests the end is near for the archaic (and some might argue, barbaric) system of compensating restaurant employees based on the whims of customers. He cites recent policy changes at places like Bar Agricole and Trou Normand in San Francisco and Camino in Oakland. They’ve raised their prices to include a service charge. Other restaurants are tacking on a per-person service fee.
All well and good, but the places Bauer cites and reviews tend to represent the tip of the restaurant iceberg. Many more meals are consumed (and money spent) at places farther down the food chain from the establishments he reviews.
The restaurant business is a notoriously tough one where low profit margins are the rule. Analysts assume labor makes up about a third of the average restaurant’s costs–but remember, the restaurant owner has taken a big piece of his labor cost “off the books,” relying on customers to compensate the staff with tips.
There’s a popular perception that servers are fairly compensated because good service equals a good tip. Ask anyone who’s spent any time in the business, especially at the places below Michael Bauer’s radar, and they’ll tell you the truth: it’s a crapshoot. Friendly, efficient service might produce a sweet tip…or not. It’s completely up to the customer.
It’s bizarre, when you think about it. It’s like letting moviegoers decide how to much to pay AFTER they’ve seen the movie or letting you wear a new suit for a day before you decide what you’ll pay for it.
We’re all a part of this, and of course, plenty of other cultures play it very differently. We seem to want good service but don’t value it enough to accept that it’s worth paying for. I don’t know about you, but I’ve always felt uncomfortable with the dynamic in which I hold the pursestrings and the waitress tries to curry my favor for a tip. It’s like tossing coins off the cruise ship to the natives, isn’t it?
I hope Bauer is right and the trend of building the price of service into the price of a meal spreads, but I’m skeptical. There are just too many indications that the restaurant industry typically views its service staff as expendable. Take the “auto-gratuity” situation: once the IRS started classifying things like the “18% service charge for parties of six or more” as subject to payroll tax withholding, many big chains simply ended the practice. Result: big parties, big tabs, small tips.
With any luck, places that don’t make Michael Bauer’s Top 100 list will get on board and price a meal in a way that fairly compensates all the people who create and deliver it. But I’m not holding my breath.