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When Danny Meyer, one of New York’s biggest restauranteurs, announced last year that he would be eliminating tipping at all of his restaurants, there were many questions.
Why the change? How would the an added service charge work on the menu? Would people stop going to the restaurants? How would it effect the dynamic of staff? Would servers go elsewhere in search of huge tips?
It was a bold move and one that Meyer has always argued needed to be done, and it certainly took someone with a big hand in the restaurant scene to push such a radical shift in the normal US restaurant model - many places have since followed Meyer’s restaurant group in scrapping tipping and adding a service charge or plainly increasing the cost of dishes to factor in these costs.
Speaking with Freakanonics Radio, in a really interesting interview, Meyer explained his choice: “When I learned a statistic that for the first time in my entire career, that we had more culinary grads working in the dining room than in the kitchen, that was the moment when I said, “That has to stop,” because they didn’t go to cooking school to be servers.”
The interview, which also includes professors in business and hotel administration, gets deep into the topic of tipping in the US and how it the structure is actually unsustainable, unfair and unrealistic.
As Meyer argued, “the American menu price structure is completely false, but we’ve been taught to believe that it’s real… We have been conditioned, after many, many years as consumers, to believe that the $25 chicken entree is $25. And then when we add the tip, we truly feel like it came out of a different pocket, and we don’t put that calculus into it.
“I also think it’s really important to understand that while it’s wonderful that if you order a $100 bottle of wine and you’re a 20-percent tipper, the waiter’s going to make $20 for your pulling the same cork as the guy at the next table only bought a $40 bottle of wine and his server gets $8 for that. What about the cook in the kitchen that makes the exact same dollars whether we served 300 people tonight or 200 people tonight? Whether he shaved white truffles over your pasta or parmigiano over your pasta? There’s just something that’s not right.”
Take a listen to whole show below.