Stirring the pot on tips

SPEAKING OUT: Chef Matthew MacCartney of Jamestown Fish said New York restaurateur Danny Meyer's move to eliminate tipping at his restaurants was
SPEAKING OUT: Chef Matthew MacCartney of Jamestown Fish said New York restaurateur Danny Meyer's move to eliminate tipping at his restaurants was "a bold and brave step that will make a job into a career for so many." / COURTESY JAMESTOWN FISH

The owner of a major New York fine-dining restaurant group has rocked the food-service industry by announcing tipping will be eliminated at his restaurants.

The Union Square Hospitality Group owns and operates 12 award-winning and well-known eateries, such as Union Square Café, Gramercy Tavern and Shake Shack. The company’s CEO, Danny Meyer, announced the move in mid-October.

The group employs 1,800 and serves an estimated 40,000 to 50,000 meals in New York City each week. Meyer said they will all receive raises under his new policy, which he calls “hospitality included.” The cost of the employees’ hourly wage will be factored into menu prices, which are expected to rise more than 20 percent, according to one industry observer. Restaurant checks would no longer include space for gratuities to be written in.

In a media statement announcing the move, Meyer said, “We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us.”

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Addressing the key issue which led to the change, he continued, “We will now have the ability to compensate all of our employees equitably, competitively and professionally. Local restaurateurs have taken notice of this major shift in the way restaurants do business. The state’s chefs and owners were abuzz when the news broke. Some leaders in the local food-service industry took to social media.

Chef Matthew MacCartney of Jamestown Fish was one of the first to acknowledge Meyer’s move, applauding the New York restaurateur for “taking such a bold and brave step that will make a job into a career for so many.” MacCartney told PBN he thinks “this is a direction we must go as an industry” and that he applauds Meyer and others “who have made the leap.” Joe Simone, of Simone’s in Warren, observed that under the present fine-dining business model, gratuities are pooled and so-called “back-of-the-house” workers – bussers, dishwashers, runners, etc. already receive a share of each evening’s tips. In addition, he noted, service charges are already routine for large parties and catering but cautioned “allowances must be made for patrons who wish to provide gratuities over and above” a service charge or fixed-price menu.

The president of the Massachusetts Restaurant Association, Bob Luz, issued a statement which read, “Eliminating tipping in some restaurants by adding an administrative charge or raising menu prices by 20 percent or more has been a slowly developing practice that is being driven by union activists and government regulation, far more than servers and bartenders believing they are undercompensated.” Luz added, “The results so far have been very mixed in many cases as service levels guests received have dropped and high-performing employees have moved to competing restaurants that have not changed the service model.”

The new policy would not take effect at any of the Union Square Group’s New York restaurants until the end of next year at the earliest. Indeed, Meyer is hedging his bets somewhat, inviting his guests to a so-called “town hall” meeting next month to discuss the new policy. He will establish a pilot “no tipping required” program at one of his restaurants, the Michelin-starred eatery inside the Museum of Modern Art called The Modern.

As far as Rhode Island restaurants are concerned, the overall response from business owners and chefs appears to be wait and see. Industry insiders and members seem to be in the camp of not taking away the opportunity of the guest to reward exceptional service.

Evan Smith, the executive director of Discover Newport, the convention and visitors’ bureau for Newport and Bristol County, observed on my radio show that while the so-called European model of a fixed service charge to each guest’s check might be more appealing, even in Europe the idea of additional gratuities for superior service has caught on, brought by American tourists.

Restaurants in Newport may be watching the developments in New York more closely, as so many seasonal visitors are from that area, and if “hospitality included” catches on, may want to bring the new practice with them on vacation. •

Bruce Newbury’s Dining Out talk radio show is heard on 920 WHJJ-AM, 1540 WADK-AM and on mobile applications. He can be reached by email at Bruce@brucenewbury.com.

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