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Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house. Also, it means that waitstaff will side with

Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house. Also, it means that waitstaff will side with the customer’s interests over the restaurant’s. Consider for example a round of free drinks at a bar—increases the tip but costs the bar. Restaurant owners that have tried to eliminate tipping find a) customers are uncomfortable and sometimes try to tip anyway and b) would be customers compare prices without taking into account the fact that tip is included. The people I’ve talked to most inclined to support tipping culture are servers at mid to expensive restaurants and demanding foodies.

jklinger410 5y ago
> For them it means a fixed percentage of revenue has to go to the front of house. ??? Tipping is not a "fixed percentage." You may have a few edge cases here, but I have to push back on the idea that business owners don't like it. They get to pay their front house staff next to nothing, this money consistently goes untaxed, and it gives their employees incentive to work hard. It also gives their front house the capability to make an income that the owner themselves would never dream of paying, meaning they can have talented employees just show up magically without having to alter their business in any way. I have to agree that the people who like it THE MOST are the people also most likely to complain: the servers and bartenders. It only takes some basic math to identify that being a server is the highest paying entry level job in the United States simply because of tipping culture.
- danaris 5y ago
  > being a server is the highest paying entry level job in the United States simply because of tipping culture. ...if you get just the right job in just the right area. The exact same job—even at a chain—in two restaurants just a few miles apart could have massively different levels of tips.
- kasey_junk 5y ago
  It’s not a fixed percentage but it’s close enough to think of it that way. The real problem is that they are legally prohibited from using tip share to pay their back of house more. This puts them in a situation where if they want to raise kitchen staff wages they have to raise prices and restaurant customers are extremely price sensitive. Several high end restaurants (were presumably there would be less price sensitivity) have tried doing away with tips and raising their prices to pay all staff a more uniform wage. It’s largely failed. Customers don’t like higher prices and front if house staff largely prefer tips as they make more (at the cost of lower pay for their kitchen colleagues).
newsclues 5y ago
Business owners like the fact that their staff are incentivized to sell as if paying a percentage commission on sales, but the commission is paid by the consumers.
danaris 5y ago
> customers are uncomfortable and sometimes try to tip anyway This is almost certainly largely because of another of the incredibly frustrating aspects of tipping: it's entirely informal, with no way to tell what's expected of customers. The etiquette around it can be extremely confusing on both sides, too—I've heard stories of workers who are strictly forbidden from acknowledging tips to customers, so that if you asked, they would have to say "no, you don't need to tip", even though they're still considered tipped workers legally. So unless there's explicit statements from the establishment of "we do not accept tips for our workers, because we make sure their wages are high enough not to need that", you can't take "you don't need to tip" at face value. Hell, even then you can't; I wouldn't be remotely surprised to see unscrupulous business owners put that even when they do not, in fact, pay their workers well, especially in areas near where other places say it truthfully.
HWR_14 5y ago
> Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house. Reducing fixed period costs (e.g. labor costs of servers, rent, IT hardware) to revenue based splits (e.g. tipping, hotdesks at coworking spaces, the cloud) is an excellent way to minimize risks and most businesses are willing to pay a premium for that.
- bradleyjg 5y ago
  That may well be the case, but in the restaurant industry it is potentially keeping in place a local maxima. No restaurant can experiment with spending less on front of house and more on back of house, ingredients, or space. That percentage of revenue (~25%) is locked in and untouchable.
  - HWR_14 5y ago
    Spending 25% on the front of the house? That's a huge amount - labor is probably less than 25% all in.
    - bradleyjg 5y ago
      20% comes off the top in the form of tips that never make it to the till. The other 5% is a fudge factor for the fact that you still need to pay something in wages.
      - HWR_14 5y ago
        Your numbers imply that the hourly productivity of a waiter in the US serves food that is just under $50 on the menu and thy make a $12.50 tip on the same. More in areas with a higher tip minimum wage. Do those numbers seem reasonable to you?
        bradleyjg 5y ago
        I don’t understand where you are getting those numbers.

jklinger410 5y ago

> For them it means a fixed percentage of revenue has to go to the front of house. ??? Tipping is not a "fixed percentage." You may have a few edge cases here, but I have to push back on the idea that business owners don't like it. They get to pay their front house staff next to nothing, this money consistently goes untaxed, and it gives their employees incentive to work hard. It also gives their front house the capability to make an income that the owner themselves would never dream of paying, meaning they can have talented employees just show up magically without having to alter their business in any way. I have to agree that the people who like it THE MOST are the people also most likely to complain: the servers and bartenders. It only takes some basic math to identify that being a server is the highest paying entry level job in the United States simply because of tipping culture.

danaris 5y ago
> being a server is the highest paying entry level job in the United States simply because of tipping culture. ...if you get just the right job in just the right area. The exact same job—even at a chain—in two restaurants just a few miles apart could have massively different levels of tips.
kasey_junk 5y ago
It’s not a fixed percentage but it’s close enough to think of it that way. The real problem is that they are legally prohibited from using tip share to pay their back of house more. This puts them in a situation where if they want to raise kitchen staff wages they have to raise prices and restaurant customers are extremely price sensitive. Several high end restaurants (were presumably there would be less price sensitivity) have tried doing away with tips and raising their prices to pay all staff a more uniform wage. It’s largely failed. Customers don’t like higher prices and front if house staff largely prefer tips as they make more (at the cost of lower pay for their kitchen colleagues).

newsclues 5y ago

Business owners like the fact that their staff are incentivized to sell as if paying a percentage commission on sales, but the commission is paid by the consumers.

danaris 5y ago

> customers are uncomfortable and sometimes try to tip anyway This is almost certainly largely because of another of the incredibly frustrating aspects of tipping: it's entirely informal, with no way to tell what's expected of customers. The etiquette around it can be extremely confusing on both sides, too—I've heard stories of workers who are strictly forbidden from acknowledging tips to customers, so that if you asked, they would have to say "no, you don't need to tip", even though they're still considered tipped workers legally. So unless there's explicit statements from the establishment of "we do not accept tips for our workers, because we make sure their wages are high enough not to need that", you can't take "you don't need to tip" at face value. Hell, even then you can't; I wouldn't be remotely surprised to see unscrupulous business owners put that even when they do not, in fact, pay their workers well, especially in areas near where other places say it truthfully.

HWR_14 5y ago

> Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house. Reducing fixed period costs (e.g. labor costs of servers, rent, IT hardware) to revenue based splits (e.g. tipping, hotdesks at coworking spaces, the cloud) is an excellent way to minimize risks and most businesses are willing to pay a premium for that.

bradleyjg 5y ago
That may well be the case, but in the restaurant industry it is potentially keeping in place a local maxima. No restaurant can experiment with spending less on front of house and more on back of house, ingredients, or space. That percentage of revenue (~25%) is locked in and untouchable.
- HWR_14 5y ago
  Spending 25% on the front of the house? That's a huge amount - labor is probably less than 25% all in.
  - bradleyjg 5y ago
    20% comes off the top in the form of tips that never make it to the till. The other 5% is a fudge factor for the fact that you still need to pay something in wages.
    - HWR_14 5y ago
      Your numbers imply that the hourly productivity of a waiter in the US serves food that is just under $50 on the menu and thy make a $12.50 tip on the same. More in areas with a higher tip minimum wage. Do those numbers seem reasonable to you?
      - bradleyjg 5y ago
        I don’t understand where you are getting those numbers.