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Wondering whether an experiment where a restaurant charges a flat amount, no tip, no taxes would do well right now. It feels impossible to leave the house even

Wondering whether an experiment where a restaurant charges a flat amount, no tip, no taxes would do well right now. It feels impossible to leave the house even alone without spending $40 on even the smallest meal that isn't fast food. I went to IHOP and got an omelette, hash browns and toast (extra $5) in a city recently, and with a 20% tip it came to $29 for just that meal - $17 + 5 + $2 tax + $5 tip. The food cost can't have been more than $4. Its getting way out of hand, and yes minimum wage is getting higher but thats not a sufficient reason. Have noticed this isn't nearly a problem in cities with lower real estate costs. You can still get a $12 diner meal in chicago for instance.

dragonwriter 4y ago
> Have noticed this isn’t nearly a problem in cities with lower real estate costs. Well, yes, at any business you buy from, you are paying for all of their inputs, including any real estate they need, and, in addition, their costs reflect their suppliers (including employees, who need a place to live) costs, including real estate costs. So, yes, ceteris paribus, local real estate prices are going to have a major impact on prices, especially where inputs need to be locally sourced (including industries that rely on substantial on-site labor.)
- taurath 4y ago
  I was drawing that comparison because often pricing is blamed on minimum wage primarily and exclusively especially as business owners lobby against wage increases, while saying nothing about real estate costs. Wages become a bogeyman and only the business interests (including the real estate business) get addressed
listenallyall 4y ago
IHOP's pricing has exploded recently. Yes all of their omelettes are in the $14+ range. You didn't order a soda (Pepsi, uggh) which would have been $4 more. They aren't the only ones but, there seems to be a huge disconnect between what they charge and what you get, and it's evidenced by the restaurants often having a whole section or half entirely closed off and empty. IHOP does offer a "hoppy hour menu" but they even upped the price on that significantly from when they originally rolled it out.
recursivecaveat 4y ago
It's probably not worth it in the same way almost nothing is tax-included. It's a bit of a coordination problem: the psychological benefit of lower list prices means restaurants benefit from loading as much of their prices as possible into tips and fees. On the other hand I think it would be a net benefit to everyone if we didn't have to play these silly games with prices.
snotrockets 4y ago
A few restaurants had prices inclusive or service. A local one stopped that recently, as they believed the higher menu prices made customers avoid them (even if the total amount paid for dinner, service included, is the same)
rightbyte 4y ago
> Have noticed this isn’t nearly a problem in cities with lower real estate costs. These price hikes were long overdue. I guess e.g. the Bay area is running low on suckers that have not realized that it is unaffordable to sell omelettes under 29 USD and live there. This includes local business owners as well as waitresses. I believe the reason is that the generation of native born that could get estate at good prices are getting old now and the new generation that takes over can't operate "at a loss" like the old. I.e. the earlier generation kept prices down since they already owned the buildings since before the boom and didn't have to charge alot.
Atheros 4y ago
People have run the experiment at great expense and then given up and switched back. [1] [1] https://ny.eater.com/2020/7/20/21331797/danny-meyer-ushg-no-tipping-nyc-restaurants-outdoor-dining https://ny.eater.com/2020/7/20/21331797/danny-meyer-ushg-no-...

dragonwriter 4y ago

> Have noticed this isn’t nearly a problem in cities with lower real estate costs. Well, yes, at any business you buy from, you are paying for all of their inputs, including any real estate they need, and, in addition, their costs reflect their suppliers (including employees, who need a place to live) costs, including real estate costs. So, yes, ceteris paribus, local real estate prices are going to have a major impact on prices, especially where inputs need to be locally sourced (including industries that rely on substantial on-site labor.)

taurath 4y ago
I was drawing that comparison because often pricing is blamed on minimum wage primarily and exclusively especially as business owners lobby against wage increases, while saying nothing about real estate costs. Wages become a bogeyman and only the business interests (including the real estate business) get addressed

listenallyall 4y ago

IHOP's pricing has exploded recently. Yes all of their omelettes are in the $14+ range. You didn't order a soda (Pepsi, uggh) which would have been $4 more. They aren't the only ones but, there seems to be a huge disconnect between what they charge and what you get, and it's evidenced by the restaurants often having a whole section or half entirely closed off and empty. IHOP does offer a "hoppy hour menu" but they even upped the price on that significantly from when they originally rolled it out.

recursivecaveat 4y ago

It's probably not worth it in the same way almost nothing is tax-included. It's a bit of a coordination problem: the psychological benefit of lower list prices means restaurants benefit from loading as much of their prices as possible into tips and fees. On the other hand I think it would be a net benefit to everyone if we didn't have to play these silly games with prices.

snotrockets 4y ago

A few restaurants had prices inclusive or service. A local one stopped that recently, as they believed the higher menu prices made customers avoid them (even if the total amount paid for dinner, service included, is the same)

rightbyte 4y ago

> Have noticed this isn’t nearly a problem in cities with lower real estate costs. These price hikes were long overdue. I guess e.g. the Bay area is running low on suckers that have not realized that it is unaffordable to sell omelettes under 29 USD and live there. This includes local business owners as well as waitresses. I believe the reason is that the generation of native born that could get estate at good prices are getting old now and the new generation that takes over can't operate "at a loss" like the old. I.e. the earlier generation kept prices down since they already owned the buildings since before the boom and didn't have to charge alot.

Atheros 4y ago

People have run the experiment at great expense and then given up and switched back. [1] [1] https://ny.eater.com/2020/7/20/21331797/danny-meyer-ushg-no-tipping-nyc-restaurants-outdoor-dining https://ny.eater.com/2020/7/20/21331797/danny-meyer-ushg-no-...