Major New York City restaurateur ditches tipping. Everybody wins?

Successful New York City restaurant manager Danny Meyer will eliminate tipping to make pay more equitable for all restaurant employees, improve managers' influence, and enhance customers' dining experience. 

Melanie Stetson Freeman/The Christian Science Monitor/File
A waiter works at an outdoor cafe in midtown Manhattan before the lunch rush, on April 11, 2013 in New York, New York. New Yorkers and tourists love to dine out at restaurants.

Restaurateur Danny Meyer announced Wednesday that he will eliminate tipping at all 13 of his New York City restaurants by raising the price of all meals, in a move that he expects will improve the lifestyle of his employees.

Mr. Meyer’s Union Square Hospitality Group includes many popular New York City restaurants, such as Union Square Café, Gramercy Tavern, Blue Smoke, and The Modern, inside the Museum of Modern Art. Beginning in November, customers' checks at these restaurants will say 'hospitality included' and the tip line will be removed from the receipt. 

But this change won't make service free for customers. Diners can expect to see a 30 percent price bump on menu items at Meyer's restaurants. 

“We will now have the ability to compensate all of our employees equitably, competitively, and professionally,” Meyer writes in a press release. “And by eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work.”

Meyer further explains his belief that hospitality is a “team sport” and the practice of tipping leaves out servers’ colleagues such as cooks, hostesses, and dishwashers who “aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants.”

Meyer told The New York Times that income for kitchen workers has not increased more than 25 percent during his 30 years in the New York food industry. “Meanwhile, dining-room pay has gone up 200 percent,” he added.

He fears that if this pay gap continues in kitchens across the United States, which is fueled by a law that prevents back of house staff from sharing in pooled tips, then New York City won’t be able “to attract the culinary talent that the city needs to keep its edge.”

But this initiative isn’t entirely unexpected.

Since as early as 1994, Meyer has openly expressed frustration at America’s tipping system. He would prefer the US fully transition to a European or Japanese style of dining where tipping is already included in the price of the meal. If restaurant guests (instead of management) determine staff’s income, Meyer says managers are left without a way to promote and reward particularly excellent service.

“I get to give merit raises based on what kind of job I think you’re doing,” Meyer told the New York Eater. “And I have all kinds of ways to make those judgments now that I’m your boss, and John Q public is not your boss.”

Los Angeles restaurateur Gabriel Frem already made the transition to no-tipping, and told The Christian Science Monitor in January that it will not only help the wait staff, but also improve business.

“We think that if we stabilize the lives of our employees, they can then focus on the customer,” Mr. Frem told The Monitor's Daniel Wood. “If people came to work and didn’t know what they were going to make for the week, that tension would eventually translate to the customer.” 

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