The no-tipping policy lasted just six months at Chang’s Momofuku Nishi. Claus Meyer, a Noma co-founder, announced in February that he was ending the no-tipping policy at his own New York restaurant, Agern, after two years, citing slow business as a result of the higher menu prices. Gabe Stulman reversed course at his restaurant, Fedora, after four months without tips, telling Eater that guests were ordering less food than they had before.
People are dumb. Even if they should know they’re saving money overall by not tipping, they see a higher number and think it’s bad.
The point is that the menu prices should not need to go up, because tips should never have been a necessary part of their profit margins.
They were literally subsidizing their expenses (including payroll) with tips, and that’s made evident by the fact that the prices had to go up when tips were ended.
If your business cannot afford to survive without paying your employees a living wage, then your business shouldn’t exist.
Ok, well, most restaurants have notoriously small margins (3-5%) with tipping. So, setting aside what you think should and shouldn’t be, what is an actual solution? Eliminate tipping and raise prices? Restructure the agricultural pipeline to lower costs? Cap commercial real estate prices to reduce rental overhead? Because as it stands now, you can’t eliminate tipping without getting the money somewhere, and it’s not in the restaurants profits.
Thank you for the actual source! I knew there would be evidence aside from my anecdote but didn’t particularly feel like looking it up. I’ve had this argument on lemmy a couple of times so I find it a bit tiresome. Appreciate the support :)
Just gonna add a source to back this up:
People are dumb. Even if they should know they’re saving money overall by not tipping, they see a higher number and think it’s bad.
The point is that the menu prices should not need to go up, because tips should never have been a necessary part of their profit margins.
They were literally subsidizing their expenses (including payroll) with tips, and that’s made evident by the fact that the prices had to go up when tips were ended.
If your business cannot afford to survive without paying your employees a living wage, then your business shouldn’t exist.
Ok, well, most restaurants have notoriously small margins (3-5%) with tipping. So, setting aside what you think should and shouldn’t be, what is an actual solution? Eliminate tipping and raise prices? Restructure the agricultural pipeline to lower costs? Cap commercial real estate prices to reduce rental overhead? Because as it stands now, you can’t eliminate tipping without getting the money somewhere, and it’s not in the restaurants profits.
Thank you for the actual source! I knew there would be evidence aside from my anecdote but didn’t particularly feel like looking it up. I’ve had this argument on lemmy a couple of times so I find it a bit tiresome. Appreciate the support :)