The ViewWhy do some restaurants ban tipping? It doesn't ensure good service, or reward it
Is it possible, for example, that the Hong Kong taxi service would improve if drivers got bigger tips?
To tip or not to tip, that is the question posed and answered by the well known New York restaurateur Danny Meyer who is rolling out a no tipping policy in his restaurants while raising both wages for his staff and prices for his customers. His initiative, although not pioneering, has made news around the world because it raises some interesting questions about the service industry.
As an infinitely more modest restaurateur myself I can confirm that tipping is a fraught issue for both customers and staff. However Meyer’s explanation of why he is moving in the no tipping direction is far from satisfactory. He claims, for example, that staff are barred by law from establishing a tipping pool enabling both kitchen and floor staff to share tips. This is misleading as New York law on tip pooling is specifically designed to prevent employers from getting their hands on tips that should go to the staff. Pooled tips that only go to the staff should present no legal problem.
Tipping is something of an anachronism because there are few other forms of employment where employees are directly rewarded by customers
Secondly, Meyer chooses not to mention that the new tipping policy comes ahead of changes to New York’s minimum wage law, which would require an upward revision in wages for some of his staff, so there seems to be something beyond coincidence here.
However the very problems with Meyer’s explanation of his new policy illustrate many of the other issues raised by the tipping conundrum. The most frequent charge against restaurant owners is that getting customers to provide tips is simply a licence to pay less in wages.
There is a connected issue here because some restaurants, lamentably many of which are in Hong Kong, add a service charge to a bill and do not pass it on. And there are the restaurants that also do not pass on the tip element of a credit or debit card payment. In other words not only are staff deprived of tips but customers are misled into thinking that rewards, given in good faith, are delivered to their intended targets.
READ MORE: Danny Meyer’s US restaurant group to implement no-tipping policy
Then there are all the questions about whether tipping is really an incentive for better service. The origins of the word tip supposedly date back an 18th century coffee house, which had a bowl for cash offerings, marked ‘To Insure Promptitude’.