Death to Tipping

This essay is for restaurant owners, chefs, and anyone who wants to restore humanity in the restaurant business.

You’re thinking it. But I’m going to say it: Tipping sucks.

You know that feeling of dread as a Square register swivels toward you for a 20% tip on a muffin? Or the weird suspicion that you’re getting side-eyes from servers as you’re figuring out how much you’re going to tip on your bill?

Blame tipping.

Now what if we were to magically make tipping disappear? Think about the diner for a second. What if, by removing tips from your restaurant, you’ll actually end up delighting more guests, improving your food, and retaining employees? What if it’s really that easy? If there’s one thought experiment I’m willing to gamble on, that’s it: No tipping means better business.

Happier customers

Guests should never have to think about their bill. But with tipping you’re asking them to evaluate their entire evening regardless of how good it was. They’ll have to calculate something on their phone and still add at least 15% of their check. It’s robbery.

How about slipping in a mandatory 20% service charge at the end of a meal?

Please, no.

Your customer will simply do a double take, ask to see the fine print on the menu again, cringe at the surcharge, then convince herself her meal wasn’t so great after all. You’ll make matters worse if your printed receipt still leaves a blank tip section for her to fill out. As though you were hoping she wouldn’t notice the service charge and double-tip anyway. What a good way to erode trust.

Luckily there’s hope for us. Follow any other sensible dining establishment outside of the U.S. (e.g. China, Japan) where customers only pay for what is priced on the menu. A bowl of noodles? A 12 course seafood banquet? Doesn’t matter. No extra tips, no service charges, no bait-and-switch nonsense.

6 RMB ($1 bowl) of Lanzhou hand-pulled noodles. No tipping shenanigans.
2016-09-11 11.14.41.jpg

Renewed creativity

A normal reaction to getting rid of tipping is you’ll have to raise prices. And you should, even if that means raising them by 15% to 30%. At first glance, your guests may question your food prices with high expectations. But be open with what’s included (e.g. sales taxes, health care surcharges, etc.) and make it known you pay your employees a fair wage. Guests will gradually come around and accept this change.

There is, however, a caveat. If you’re serving Asian cuisine, you might not have the luxury of riding the Eurocentric coattails and inelastic price bias American diners have for Western food. Cities like San Francisco and New York host many Italian and French bistros, at which they can charge $22 for store-bought pastas with cream sauce. Guests won’t bat an eye. Yet when a decent Cantonese restaurant charges $16 for an order of seafood pan-fried noodles, the world burns.

So what should you do?

Make your food undeniably delicious. Whether you sprinkle MSG into pillowy soup dumplings or naturally brew a 48 hour paitan broth–you’ll always want guests lining up to enjoy what you’ve painstakingly made[1].

Next, guide your guest through each stage of preparing their dish. Inasmuch as an audience derives more pleasure from watching Yo-Yo Ma live than listening to him on Spotify, let your guests feel your story. Slip a peek of the ingredients you’re wok-frying from your station. Plate the noodles in view for diners, then have a cook walk to your guest’s table. That’s when your restaurant’s story shines: by now your diners will be hot and heavy, ready to hand their wallets at you. Dignify that $16 dish with the price it deserves.

Finally, shower your guests with kindness. While folks may be willing to put up with salty attitudes for $4 banh mi’s in the Tenderloin District, they’ll want to be spoiled at your restaurant. Ignore the thinking that you’re competing with other businesses on price alone. Otherwise you’re just another commoditized Chinese shop with crappy servers and cheap food. You’ll only attract detritivores. Of course, what’s different about your restaurant is how sufficiently stellar your service is, that you can proudly scoff at tips.

Chefs will love you

Why do cooks leave so often? Why do their front of house counterparts stay for several years or more?

Like everything else in the industry, profit margins are thin. A knee-jerk reaction from a restaurant owner might be to carve out flesh from variable costs, such as wages. It seems simple: you pay employees minimum wage so you can reduce menu prices, have guests subsidize low wages through tips, report less revenue and, therefore, owe less in taxes.

The problem is you’ve created a structural monster. Your cooks, who hustle 12+ hour days, aren’t oblivious to this. They notice when they’re left with with smaller paychecks than their server counterparts who benefit from tips. It’s difficult to find cooks willing to work for pay that’s on par with what McDonald’s offers. Take San Francisco, for example, where, despite enjoying the highest restaurant per capita in the country, the city hemorrhages cooks left and right.

Frustration with wage inequality is visceral. You might convince yourself the old-school chef’s mantra of “you’re not in it for the money” is true, but it’s secretly painful to hear as a cook. They’ll either eventually leave disgruntled or your city’s living costs will push them out. By continuing to accept tips, you’re just mortgaging the talent of your restaurant.

What’s exciting is you can fix this. Put yourself in their shoes. With what your head honcho offers you, will you have to sell your body to pay rent? Will you have to count nickels to save for an emergency fund in case your sick days aren’t enough? Will you have enough for a short vacation in Japan since your hourly gig doesn’t offer paid-time-off?

Go ahead, remove tips and list a fair price for your bowl of brisket pho, grilled lamb shawarma, or omakase. Then actually pay your kitchen team a fair wage. Watch, they will love you. They will fight tooth and nail to please your guests. They will cook your local, sustainably-raised, antibiotic-free, stress-free, manicured, trust-fund Lacinato kale with integrity. What’s wonderful is your customers will feel this.

So embrace your team’s frustrations and be human. Be the annoying middle finger in an archaic system designed by old, dictatorial French chefs. And I’m willing to bet you’ll be onto something revolutionary.


[1] While I’m no advocate for using factory-made monosodium glutamate (MSG) in food, I’m no opponent of it either. I’d prefer not cooking with it given the time and effort of sourcing, preparing and cooking my ingredients, so why not work a tad harder and find umami from natural sources?

Thanks to Hedan Zeng and Michael Fong for reviewing this essay


Now read this

How to Survive in SF as a Broke Startup

[Update] tl;dr: Listen to my short NPR Marketplace Tech interview instead (starts at 3:30): I lived like a roach for the past year. Before my startup failed, my three co-founders and I survived on a mere $450 to... Continue →