It's an imperfect heuristic, but it's hard to find a better one that's as objective and easily adopted. In general, it makes the tip proportional to the number

It's an imperfect heuristic, but it's hard to find a better one that's as objective and easily adopted. In general, it makes the tip proportional to the number of people/dishes served, which does relate to the amount of work done. For the case of the fancy restaurant vs the cheap one, people who compete for these jobs know that. For a high end steakhouse, you'll likely find wait staff who have been there a long time and who tend to have sharper interpersonal skills. It's true that it doesn't make sense when comparing two dishes at the same restaurant, one being twice the price, but otherwise being the same amount of work for the wait staff. But I think what's common in these cases is for people to tip closer to 15% in one case and 20% in the other case. Overall, it's something strongly engrained in our culture. A large portion of people in the USA worked for tips at some point in the life, and so they they have strong feelings about it continuing to be a thing when they themselves go to restaurants.