What, No Tip? Service Charge Faces Struggle at Restaurants
Reprinted from the New York Times
Is the right
to stiff the waiter as American as apple pie?
Keller, chef at the extravagantly priced Per Se restaurant in the
Time Warner Center in Manhattan, does not think so. Indeed, he is
taking tipping off the table at Per Se starting next month and
replacing it with a flat service fee of 20 percent. At the Per Se
restaurant in the Time Warner Center in Manhattan, tipping is
being replaced with a 20 percent service fee next month.
But in doing
so, he is trying an approach that chefs and restaurant managers
say has never caught on in this country for a simple reason:
American diners relish the power of the tip to reward or punish
their servers, and the servers want them to have it.
a high-risk approach," said Danny Meyer, owner of the Union Square
Cafe and several other restaurants in Manhattan. Mr. Meyer was not
warning that Per Se's customers might balk. After all, they have
been begging for a chance to pay $175 or more for a single dinner
there - and on average they tip at a rate of 22 percent. No, he
meant that Mr. Keller might face a mutiny among his waiters, who
might not stand still for Mr. Keller's plan to divert a larger
portion of the service charge to the people in the kitchen.
said he was making the switch to head off an exodus of cooks and
kitchen workers who had complained that they did not earn enough.
He said he had already lost one talented young cook and that
another had asked to become a waiter temporarily so that he could
pay some bills.
the imbalance of earnings and that a change needed to occur in
order to provide everyone in the restaurant an opportunity to
pursue their dreams," Mr. Keller wrote in response to questions
from a reporter.
"Some of the
dining room staff is understandably concerned," he added. "They're
going to be compensated in a new way that they're not used to."
Instead of worrying about how much they take home on a particular
night, the waiters and all the other employees will earn steady
wages, even for weeks when the restaurant is closed, Mr. Keller
said. He said the system worked well for more than seven years at
French Laundry, his restaurant in Yountville, Calif., which
charges 19 percent for service.
said he understood the instinct to opt for a service charge
because he had it more than a decade ago. In 1994, Mr. Meyer said,
he was all set to assume more control over how each member of his
Union Square Cafe staff was paid by de-emphasizing tipping. He
planned to build the cost of service into the prices on the cafe's
menu, then pay the waiters' salaries out of the total, as is
commonly done in France.
point, I was impassioned about abolishing the tipping system
because I felt it created a false servant-master relationship
between servers and guests at the restaurant," Mr. Meyer recalled
in an interview. Receiving a small tip or no tip at all, he said,
"would just make the staff member feel really horrible, as if they
had done something wrong."
He would not
have been the first owner of a top-flight New York restaurant to
take that approach. The Quilted Giraffe, once one of the more
expensive and innovative restaurants in Manhattan, pioneered the
use of the service charge in the 1980's, automatically tacking on
a 15 percent charge to meals that cost a minimum of $75. (Although
automatic service charges are rare for couples and small groups,
they are customary for parties of eight or more.)
Meyer was surprised by the resistance from his waiters at the
Union Square Cafe, who wanted to preserve their chances of raking
in some really big tips. "What I heard was that the incentive that
a tip provides really energizes the servers to go perform," he
said. Diners seem to notice, said Tim Zagat, chief executive of
the Zagat Survey. About 80 percent of people surveyed say that
they prefer to decide how much to tip their servers, he said. They
reserve the discretion to give a very big tip or no tip at all,
though they rarely do either, he said. Three out of four
respondents say they have never left nothing, and the average tip
has been rising steadily, he said. The average amount diners said
they left last year was 18.6 percent, up from about 16 percent in
the early 1990's, he said. Few restaurants are likely to follow
Per Se's lead because few are confident enough of the quality and
consistency of their food and service to get away with it, Mr.
"If you're a
restaurateur, you've got to be careful when you say, 'I'm going to
take 20 percent more from a client,' " he said. "You're asking for
trouble. You're asking for angry clients."
At Per Se,
tips average 22 percent, Mr. Keller said. So, he said, there is a
risk that although diners will not be discouraged from leaving
more, they will decide the automatic 20 percent sounds fair. Plus,
the service charge is subject to the 8.25 percent sales tax,
bringing it to almost 22 percent of the price of the food and
wine. How many customers, faced with more than $100 in taxes and
service charge on a $450 tab, will lay down a little extra because
they liked the service? Gilbert E. Pilgram, the general manager of
Chez Panisse in Berkeley, Calif., said that would not be unusual.
Alice Waters, the founder and owner of Chez Panisse, instituted a
15 percent service charge more than 16 years ago and has rarely
received a complaint, Mr. Pilgram said.
He said he
did not hear a peep after the charge was increased to 17 percent
less than a year ago. The increase to 17 percent covered a 25
percent increase in the cost of providing health insurance to the
staff, he said. Many customers leave more, Mr. Pilgram said.
Indeed, if anybody leaves a tip of more than 5 percent, he said, a
waiter will ask if the customer understood that he had already
been charged for the service. If not, it is returned. The waiters
are free to keep all intentional tips and to split them with the
rest of the staff as they choose, he said.
said that he and Ms. Waters want the experience of the customers
and waiters to be as democratic as possible. "We cannot completely
ignore the fact that the market for whatever reasons pays a waiter
more than a cook," he said. But he added, "If Mr. Big Bucks comes
to the restaurant and drops 20 percent and in comes Mr. Non-Big
Bucks and leaves 17 percent, I don't want the waiters at Chez
Panisse giving Mr. Big Bucks better service."