Opinion: Marius Zürcher on the problem with tipping

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Whether or not to phase out the tipping of serving staff remains a hot-button issue in hospitality, but there is no easy fix, says Marius Zürcher

In 2015, a number of notable American chefs and restaurant owners, among them Momofuku’s David Chang and Noma co-founder Claus Meyer, gained a lot of media attention when they eliminated tipping in their restaurants. They arrived at that decision – not to increase their profits – but rather in an effort to improve the working conditions and the financials situations of their staff, and eventually across the industry.

The ‘no-tipping’ approach as a means to that end made sense for several reasons.

Tipping reinforces racial discrimination within the hospitality industry, which is already a significant problem, as customers’ tipping habits are known to be heavily influenced by systemic racism. This has real-life implications. According to an Eater analysis of data provided by the Current Population Survey, the average hourly tips for white, Latino, Black and Asian servers in the United States are $7.06, $6.08, $5.57 and $4.77 respectively. Given that wages of servers tend to be unusually low and are supposed to be heavily compensated with tips, tipping therefore directly contributes to racial inequality.

Similarly, tipping reinforces racial stereotyping among staff members. Servers, depending on tips, have been shown to be more likely to be biased against customers of colour, leading to lower quality service, as people of colour (PoC) are regularly being stereotyped as bad tippers. Tipping habits are also, on average, tied the average customer’s wealth. As a result of this, servers in more expensive restaurants (mostly, though not exclusively, white) tend to earn significantly more than their counterparts in cheaper restaurants (often, though not always, PoC), although the workload is often the same. This directly contributes to the larger societal issue of income equality.

Sexual harassment

Tipping also reinforces the rampant sexism that is prevalent within the hospitality industry. As a friend of mine, who used to be a server in a high-end restaurant in major European city, put it: “I had to put up with a lot of stuff, especially from rich, entitled pricks.” She’s not alone. Female servers regularly must deal with verbal abuse as well as acts of physical abuse, such as groping, from guests.

A 2014 study showed that close to 80% of women in the restaurant industry have reported sexual harassment from customers. Given their dependency on tips, it is often simply not feasible for them to speak up. Instead, many end up leaving the industry. Not only is this morally appalling, it also contributes to high turnover rates and continuing industry-wide brain drain.

Eliminating tipping allowed the above-mentioned restaurants to add service charges to their prices, which wouldn’t impact the average amount a customer spends (as the de facto obligatory tip is no longer required) but would create room for higher wages. In theory, this was meant to reduce the impact of all the previously addressed problems, by tackling income differences that exist due to racial discrimination or the type of restaurant the server works for, as well as by eliminating a big reason why women are often not in a position to speak up against harassment.

In practice however, things turned out to be more complicated, for a number of reasons. To start with, customers, apparently irritated by seemingly higher spending requirements, started ordering less food. Furthermore, customers apparently missed the agency provided to them by a tipping system, which increasingly led them to prefer restaurants that still had one over those that didn’t. The resulting slowdown eventually led to servers earning (often significantly) less than before.

Additionally, although most servers agree that tipping reinforces sexism, racism and income inequality, many nevertheless missed the feeling of instant gratification associated with tipping. These two factors combined led many of them to leave for other restaurants or industries.

Some restaurants stuck to their guns, more or less successfully, though arguably against the wishes of the people they tried to help in the first place. Most however had to reverse course.

Is legislation the solution?

So, what can be done to move beyond this catch-22? It is hard to say. The fact that there are countries in which tipping does largely not exist suggests that the solution must come in the form of legislation, such as higher minimum wages in the hospitality industry. If all restaurants would have to raise their prices to compensate the higher wages, customers wouldn’t have easy alternatives to switch to.

Given the financial pressure the industry is already under however, as well as the lobbying muscles of large hospitality corporations, many governments will be reluctant do so, especially in times of crisis.

Marius Zürcher


About the author:

The co-owner & founder of start-up 1520 in Apeldoorn, Netherlands, Marius Zürcher was a participant at FCSI’s ‘Millennials’ focused roundtable at INTERGASTRA 2018.