Is Tipping Discriminatory and Outdated? Danny Meyer Says So.

By Christine Born, October 28, 2015

Love it or hate it, tipping for service has been around since it was introduced in this country in the 19th century, and has been passionately debated almost as long. The recent flare-up started when restaurateur Danny Meyer announced his Union Square Hospitality Group would end tipping at its 13 New York City-based restaurants by the end of next year.

“It’s troubled me for 21 years that the tipping system is antithetical to creating a real profession for people who takes their jobs seriously,” Meyer told CNBC, following his Oct. 14 open letter. “You don’t tip your doctor if they do a good job. You don’t tip the airline pilot if the plane lands. … It’s actually a demeaning practice.” Meyer also compared it to buying a sweater at Brooks Brothers, where there is one total, and said the cost to diners would not differ much from what they pay now.

The move to end tipping is gaining traction as Meyer and other restaurant owners cite the discrepancy between front-of-house and back-of-house workers as unfair, contributing to low morale and hurting teamwork. Another factor might be customers’ growing irritation. More business segments, following the example of the airline industry, are externalizing costs traditionally considered part of their service. Mobile payment technology is also driving change. Counter-service restaurants and quick-service shops, which traditionally haven’t included tip options, are adding automatic tip service options to bills. In some cases, automatic tip choices now suggest a base tip of 20 percent, eliminating the previous 15 percent base. These preset gratuities are boosting tipping, attributed partially to social pressure on consumers. Service businesses welcomethe increase as a way to keep staff happy without increasing hourly wages.

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