I’m not counting on anything. If you read my other comments in this thread, it’s clear that I’m not defending tipping. I hate tipping. But I have to pour cold water on this all too common claim that one restaurant owner by themself can end tipping at their restaurant and survive as a business. It’s been tried before and failed numerous times.
About the best they can do is make tipping mandatory by putting an automatic 35% gratuity on the bill. But this is something only high end restaurants have gotten away with. Restaurants for budget conscious people (i.e normal people rather than rich people) cannot survive with anything like this.
The same story would apply for simply raising prices. People will see the restaurant as too expensive for what it offers and stop going.
If anything the total expected price for a meal will come down because servers will be paid the fair market rate for their labour and not the current guilt trip percentages
This claim needs a lot of support. Are you aware that 42% of all restaurants in Canada are already losing money paying the low wages as it is? To support your claim, you’d have to show how paying fair market wages, eliminating tipping, and charging more for meals would translate into higher sales.
I’d also like to point out that not everyone tips the same percentage. Some tip a lot, some less, some not at all. Those who tip a lot are in effect subsidizing the meals of those who cannot or will not tip as much. For people who cannot afford to tip at all, a move to a non-tipping system would represent an absolute increase in the cost of their meal.
If a meal is priced $50 + a 15% tip is expected, you expect customers to pay $57.50 for the meal.
If you instead eliminate tipping and increase the prices by 15%, your customers will still pay the same $57.50 for the meal. You still have the extra money to pay your servers. How does that lead to fewer customers? They still see the same final price at the end of the day.
The rest of the world operates perfectly fine without tipping and in fact has better service.
Tips are optional. People tip anywhere from 0-100%, with most tips in the 15-35% range. A person who regularly tips 0-10% will see their prices go up if they’re forced to pay 15% more on every meal.
But my broader point doesn’t address the “what if society wakes up tomorrow and bans tipping for the entire country?” scenario. That’s a fantasy scenario.
The issue I’m raising is the question “what if one restaurant owner decides to eliminate tipping at their restaurant and just charge 15% more, passing all that money over to the employees?” The answer is that this has been tried before and the restaurants did not survive. People saw the higher prices and switched to a restaurant with lower menu prices, even if they tip 15% or more anyway.
You might say this is irrational, and it is, from an economic standpoint. But people in a tipping culture do prefer it that way. The fact that a tip is optional but customary makes them feel like they are in control, and of course they are, given that people decide how much they want to tip.
I’m not counting on anything. If you read my other comments in this thread, it’s clear that I’m not defending tipping. I hate tipping. But I have to pour cold water on this all too common claim that one restaurant owner by themself can end tipping at their restaurant and survive as a business. It’s been tried before and failed numerous times.
About the best they can do is make tipping mandatory by putting an automatic 35% gratuity on the bill. But this is something only high end restaurants have gotten away with. Restaurants for budget conscious people (i.e normal people rather than rich people) cannot survive with anything like this.
The same story would apply for simply raising prices. People will see the restaurant as too expensive for what it offers and stop going.
This claim needs a lot of support. Are you aware that 42% of all restaurants in Canada are already losing money paying the low wages as it is? To support your claim, you’d have to show how paying fair market wages, eliminating tipping, and charging more for meals would translate into higher sales.
I’d also like to point out that not everyone tips the same percentage. Some tip a lot, some less, some not at all. Those who tip a lot are in effect subsidizing the meals of those who cannot or will not tip as much. For people who cannot afford to tip at all, a move to a non-tipping system would represent an absolute increase in the cost of their meal.
I still don’t understand your point at all.
If a meal is priced $50 + a 15% tip is expected, you expect customers to pay $57.50 for the meal.
If you instead eliminate tipping and increase the prices by 15%, your customers will still pay the same $57.50 for the meal. You still have the extra money to pay your servers. How does that lead to fewer customers? They still see the same final price at the end of the day.
The rest of the world operates perfectly fine without tipping and in fact has better service.
Tips are optional. People tip anywhere from 0-100%, with most tips in the 15-35% range. A person who regularly tips 0-10% will see their prices go up if they’re forced to pay 15% more on every meal.
But my broader point doesn’t address the “what if society wakes up tomorrow and bans tipping for the entire country?” scenario. That’s a fantasy scenario.
The issue I’m raising is the question “what if one restaurant owner decides to eliminate tipping at their restaurant and just charge 15% more, passing all that money over to the employees?” The answer is that this has been tried before and the restaurants did not survive. People saw the higher prices and switched to a restaurant with lower menu prices, even if they tip 15% or more anyway.
You might say this is irrational, and it is, from an economic standpoint. But people in a tipping culture do prefer it that way. The fact that a tip is optional but customary makes them feel like they are in control, and of course they are, given that people decide how much they want to tip.