Over the following months, a tipping ban will be introduced in USHG (Union Square Hospitality Group) restaurants across New York City.
The policy was masterminded by Danny Meyer, a hugely successful restaurateur and entrepreneur who is also the chief executive officer of the group.
It might seem like a radical departure from the age-old tradition of tipping waiters and waitresses for good service, but now Meyer is firmly set on implementing this measure in 13 of his restaurants.
Moreover, the businessman, who owns fast casual restaurant chain Shake Shack, the acclaimed Union Square Cafe, and Michelin-starred Gramercy Tavern and The Modern, is planning on raising menu prices by up to 21-25%, while at the same time giving better wages to servers and cooks.
The new policy will be launched next month at the Modern, which overlooks MoMA’s Abby Aldrich Rockefeller Sculpture Garden, and it’s expected that average hourly wage will increase from $11.75 to $15.25.
Afterwards, based on feedback from customers and staff, the roll-out will continue in 2016 across all the other USHG restaurants, which employ 1,800 people.
As Meyer explained, this is actually part of a growing trend in the industry, meant to ensure that fast food employees and others who work in the tertiary sector receive at least the minimum wage of $15 per hour.
Also, such a measure was essential in order to reward and retain valuable kitchen staff such as skilled cooks, dishwashers and reservationists, who were at a disadvantage because they didn’t receive any gratuities for their services.
This way, as the entrepreneur pointed out, the entire team will reap the fruit of their labor, since personnel will be remunerated “equitably, competitively and professionally”.
According to industry experts, Meyer’s decision might revolutionize the way the restaurant business works, by challenging the habit of tipping personnel on merit.
Nowadays, tens of billions of dollars are generated from tips on a yearly basis, and the practice has already suffered some changes in some dining establishments.
For example, some restaurants like The Radler in Chicago and The Linkery in San Diego have already halted discretionary tipping, by adding a flat-rate service charge of 18% to the check.
Including this type of mandatory payment for the waiter’s service might appear like an abusive measure to some, but it has been justified as a way to subsidize the low wages which are extremely common in the food industry.
On the other hand, others have taken the opposite route, by discontinuing tips altogether, just like Meyer has recently decided. Nevertheless, in most eateries and restaurants it remains common practice for customers to offer generous tips when they’ve had an enjoyable service experience.
The National Restaurant Association intends to keep this tradition standing, and firmly opposes to hospitality guru’s plans of abolishing tips.
As the trade group explained, restaurant owners should be free to choose what works best for their business, so that the industry can continue to flourish and generate jobs and opportunities.
“We have found that the practice of tipping has traditionally attracted millions of employees to our industry and still has strong support from American diners”, concluded a spokesperson of the National Restaurant Association.
In contrast, Restaurant Opportunities Centers United representatives have expressed their full support for Meyer, claiming that the conventional two-tiered wage system was actually unfair and unbalanced.
All in all, it remains to be seen if the no-tipping policy will eventually catch on, and if might even drive ubiquitous tips to extinction.
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