Lessons learned from a flat-rate service-charge, no-tip restaurant


#1

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#2

The person asking this question would have a full-time job as a
software developer, or lawyer, or journalist, or doctor, always
working to a pay rate that was negotiated ahead of time. We would
never suggest that a code jockey or surgeon would be motivated to do
better work by the thought that their clients, if pleased with the
service, might toss in a few extra dollars.

The professional class has the motivator of career advancement, something lacking in most restaurant service jobs. If the lawyer perfoms well, he improves his chances at becoming a partner. If the doctor is brilliant, she may land a fellowship or become influential in her field. A great coder is paid handsomely in any meritocratic organization.

A waiter, however, doesn’t have much opportunity for promotion, and restaurants are run on such thin margins that paying more for an excellent waiter is probably not worth it when you can get a sufficiently competent one cheaper. Furthermore, it’s far more difficult for a manager to assess waitstaff quality (above the “comes in on time and sober, doesn’t spill soup on customers” cutoff) than it is for the diners.

I’m not saying this is ideal, but that’s why the idea of variable and voluntary gratuity isn’t as absurd as he makes it sound.


#3

To be a good server, the first thing you have to learn is:
you run your tables; your tables don't run you


#4

Yeah, no.The 18% service charge might be better for the restaurant, but it's still an exercise in misleading and attempting to manipulate the customer into paying more than they otherwise would. "Mandatory service charge" (or the even more frustratingly insulting "mandatory gratuity") is one of those things where if I notice it, I leave right then and there.

This isn't to say I don't support no-tip restaurants. I do! I've been to them, and given them my service - but if you're going to be a no-tip restaurant, do it honestly and actually charge the price you're going to charge, like they do in practically every other country I've visited, instead of using it as an opportunity to lie on your prices. Don't pull the wool over customers eyes, robbing them of their illusion of control (and let's be honest, actual control - options are options even if not taking, and the option and feeling of control is definitely some of what the tip is paying for) WHILE still attempting to manipulate them into thinking they are paying less than they are.

It's also... pretty arrogant to think he's the first no-tip restaurant in America, something that is pretty blatantly false. I actuallly... don't like his attitude at all.

But the ultimate point, that we are better off without tipping, still stands. At least for restaurant service.

I still considering tipping the way to go for barbering, where you really don't know the quality of what you're going to get before you get it, and I've never felt beholden to giving a "standard tip".


#5

All of this is kinda bizarre to an Australian, where tips are literally a bit extra that you give normally to the whole institution - in fact you may well be served by different waiters through the evening (even at an expensive restaurant). Sounds crazy, but the wait staff are paid for their work by their employer. I know, right?

The service is no worse in countries where tipping is optional. This is obvious, people.


#6

The thing I hate is seeing a 15% "service charge" added to some bills in the UK, then a further line for the "discretionary tip" at the end.


#7

You don't think that there is career advancement in terms of working at better and more expensive restaurants? This seems pretty much the same as lawyers moving from firm to firm as they advance, or doctors moving from one hospital or University to another.


#8

All this response indicates is the arrogance of the customer and how desperately they stick to that myth described.

You're not putting off the independent spirit you believe you are. You're just coming off a bitter crank.


#9

Oh yes it is (in my experience). Service in North America is almost always much better than what I experience elsewhere.


#10

Here's my position: fair compensation for wait-staff (or any kind of staff) should be mandatory. Also, this guy did not create a tip-free restaurant. This is simply a mandatory gratuity. I think he does this so that he can avoid paying payroll taxes at a much higher rate.

Otherwise it's really unclear to me why he didn't just increase the price of his food by some percentage over 18%. He acts like he's a visionary, but it seems like he actually occupied a sort of no-man's-land where he alienated a lot of people on both sides of the debate.

I don't understand why he closed the restaurant. I read his article that sort of explained it, but didn't grasp his thinking. I wonder if he was facing tax issues from local, state, and federal entities who feel he can't have it both ways.


#11

So, you don't buy from any place doesn't include sales tax in their posted prices, either, right?


#12

Because then his prices look much higher than his competition's prices. Same reason no one says, "Heck, we'll just include sales tax in our posted prices" unless they are a primarily round-numbers cash business.

And his method increases his employer tax burden, rather than decreases it.


#13

If he's using the gratuity line on the ticket to compensate his staff, isn't he actually using the same accounting method all his competitors use?

I don't agree that an 18-20% price increase at a restaurant like The Linkery would make it uncompetitive. It's not as if they were fighting tooth and nail against a street full of other artisanal sausage companies, with customers scrutinizing posted prices to find the cheapest meal. But even if he was, a truly tipless restaurant would probably draw enough customers to make the place successful. Seems like it could have been a successful marketing gimmick, judging by the posts here. It's definitely appealing to me.


#14

The large majority of restaurants fail. It doesn't necessarily say anything about the success of the no-tipping policy. In fact, he explicitly says that business improved--presumably it just wasn't enough to keep turning a decent profit.


#15

There's a lovely local Cajun place in Lexington where everything on the menu is priced in even dollar amounts (and a few 50-cents), with sales tax included. You can pay with paper money and not have to juggle change. It's awesome, and its awesomeness kinda highlights the fact that nobody else does it.

So, yeah, if you're ever in Lexington, Kentucky, stop by Bourbon'n'Toulouse on Euclid Avenue. They deserve it.


#16

My meta interpretation of the article was that the owner has to separate the service price from the menu price in order to be competitive. Otherwise, his prices would seem artificially high compared to other restaurants in the area which, by encouraging tipping, are also separating the menu price and service price. I don't see that as manipulative so I'm not sure where your frustration is. That said, I would certainly prefer not to see service and sales tax itemized, just as I would prefer not to see regulatory fees itemized on my cell phone and utility bills. Those are the owner's costs of doing business, and are no interest or concern of mine. .... Surprising to me, at least in some US states, it is illegal not to break out the tax as a separate line item.


#17

All of that also applies to grocery baggers, retail clerks, fast food jockeys, bus drivers, warehouse workers, etc, etc, etc, and nobody seems to think that's a problem.


#18

An alternate view from a local San Diego paper - http://www.sandiegoreader.com/weblogs/feast/2013/sep/03/tips-lies-and-the-linkery/


#19

It's only misleading if you weren't planning on leaving a tip in the first place, in which case fucking off right then and there is exactly what you should be doing.


#20

I have dined at this restaurant on several occasions (amazing beer list) and the service is always abysmal and slow. This being said I tip all waiters everywhere 20%.