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St. Louis native says goodbye to restaurant tipping. Will local restaurants follow suit?

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Flickr, Damian Gadal, creative commons
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St. Louis native Danny Meyer recently rocked the restaurant world, making nationalnews with his decision to eliminate tipping from his family of New York City restaurants.

Some have lauded Meyer’s decision as the first true step towards a more equal restaurant; others question its feasibility, predicting a mass exodus of servers and a reduction in service quality.

Meyer’s decision to eliminate tipping comes at an interesting time in labor politics. Service industry workers all over the country are raising their voices for a higher minimum wage, federally and locally. The federal tipped minimum wage has languished at $2.13 since the early 1990s. In Missouri, tipped minimum wage is $3.825, or half of the $7.65 general minimum wage.

But eliminating tipping is revolutionary simply for the attitude shift it requires, said George Mahe, dining editor at St. Louis Magazine. “What Danny Meyer is proposing is a cultural change, I mean, a broad-sweeping cultural change.”

Americans have been tipping since at least the 19th century, when wealthy U.S. citizens carried the practice back from Europe. Tipping was considered un-American until the 1920s because it seemed to entrench the aristocratic and servant classes, but the advent of Prohibition—and the loss of alcohol profits—encouraged restaurants to allow tipping so they did not have to raise prices. It has remained an institutional practice ever since.

This is not the first time Meyer has been a trailblazer in the restaurant industry, Mahe said: he is known for his dedication to buying farmers’ market produce and sustainable meats, and being the first in New York to ban smoking inside his restaurants. Whether or not this change will stick seems to be anyone’s guess—but plenty of diners, servers and restauranteurs had questions about how it will impact the restaurant industry in St. Louis and nationwide.

Will eliminating tipping increase prices?

Last year, Chris Sommers, owner of Pi Pizzeria and Gringo in St. Louis, voluntarily raised the minimum wage at his restaurants to $10.10 an hour—while keeping tips for wait staff—without substantially raising the price for his food. But that kind of move is only possible when restaurants have good profit margins and some money to spare. Otherwise, as with Meyer’s restaurants, prices will rise.

Meyer has calculated roughly a 30 percent rise in menu prices when the no-tipping policy is put in place. At restaurants where the price of a two-person dinner can exceed $300 (it is New York), that kind of increase could inspire some sticker shock. But Sommers said that without tip, a 30 percent increase may not look as bad as it sounds.

“The guests would see a difference at the end of the month,” he acknowledged. But if patrons are tipping 20 or 25 percent anyway on their $300 meal, it might not disturb them too much if the price rises to $350 or more.

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Credit Aine O'Connor | St. Louis Public Radio
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Chris Sommers and George Mahe.

A more equitable restaurant

Meyer’s decision to eliminate tips comes from a logistical problem, Mahe said. Top-of-the-line cooks in many dining establishments make significantly less than front-end staff. As culinary school becomes more expensive and the number of talented cooks increases, offering cooks a competitive salary is getting more and more difficult.

The disparity in pay from the front to the back of the house can be as large as 2:1, Sommers said. His increased minimum wage was one way of coping with that; eliminating tipping is another, more radical one.

“I think it makes a much more seamless restaurant dining experience for the guests, as well as creates a more level playing field between those who serve the meal and those who cook it, and that creates a much better culture within a restaurant,” Sommers said. One listener responded:  

Service

A popular argument against eliminating tipping is that customers like to have control over the quality of their service. “But it’s been shown that the majority of people would just as soon have tipping eliminated. They just want to have it off their plate,” Mahe said. “You don’t really know.”

Another fear is that servers will leave no-tip restaurants for those where they can continue to make lightly-taxed money for their work. Asked whether servers would make more money with tips or without, one St. Louis-area server answered:

But servers who are in the industry for “the right reasons” will continue to be, Sommers said, and service may even become more equalized. A top server who used to work only Friday and Saturday nights for the good tips would now be incentivized to work during a Monday lunch, for example, meaning that Monday customers would receive top service regardless of their reservation time.

Predictable income is also an important part of a server’s cost-benefit analysis, Sommers said. “Unless a restaurant is 100 percent packed all the time, there are ebbs and flows in that income, and spikes and valleys. And this model would at least equalize it and average it out after a week, and help provide a little bit of predictability in a server’s income.”

“It’s going to put a lot more emphasis on management to ensure that that service is as good at it was before,” Mahe said. “That part concerns me a little bit, too, because a lot of restaurant managers aren’t that good in their own right.”

But all in all, Sommers said, it seems that eliminating tipping would create a more collaborative service environment, where everyone working in the restaurant—servers, cooks, managers—is concerned with all aspects of the business.

“Danny has always been about taking care of employees first, and his employees will take care of the guests,” Sommers said.

And here in St. Louis?

Restaurant finances are always a pickle, as managers and executives must contend with staff retention, food prices, facility costs and much more. Meyer’s decision may work well for his (ridiculously successful) New York restaurants, but will his spark catch in other restaurants in other places, such as his hometown?

Adam Tilford, co-owner of restaurants such as Tortillaria in the Central West End and Mission Taco Joint on the Delmar Loop, wondered if a non-tipping model might change the kind of service offered at the front of the house. “The current systems in place [were] put there for a traditional tipping style of service. I don’t yet have an answer to how that type of service would work, but my team is putting a lot of thought into it at the moment.”

One St. Louisan wrote,

“Everybody that I talked to said, man, this is a great idea, we’re glad Danny Meyer took the lead. But we don’t want to be the first one here to do it,” Mahe said. There are few St. Louis restaurants with the guaranteed client base of Danny Meyer’s, and many can’t afford to risk losing a customer to the restaurant next door because they raised their prices.

Even Sommers, who said he loves the idea of eliminating tipping, made a point of noting that his restaurants would not make the change any time soon. All the restaurant world, it seems, is waiting for results from Meyer.

Inform our coverage

This report contains information gathered with the help of our Public Insight Network. To learn more about the network and how you can become a source, please click here. And if you want join the conversation about tipping,  tell us: What's your take on tipping?

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