I think this part of the sentence is key: "and they didn’t trust management to pass on the money to its employees, he said." Meaning, no tip restaurants usuall

I think this part of the sentence is key: "and they didn’t trust management to pass on the money to its employees, he said." Meaning, no tip restaurants usually have higher prices, but customers do not trust that the higher prices went to the staff. Management needs to make some statement of wages (high wages) to prove that the tips are sufficient. IMO distrust of management's greed is the real culprit