Danny Meyer Declares an End to Tipping

Did Danny Meyer just upend the restaurant industry by ending tipping at his eateries? Maybe.

Whoa. Did the whole restaurant-hospitality pricing structure just get completely upended while we were all innocently going about our usual business? Maybe.

On Wednesday, New York City restaurateur and Union Square Hospitality Group CEO Danny Meyer, whose 13 renowned eateries include Union Square Cafe, Gramercy Tavern, The Modern and Maialino, announced that he will eliminate tipping altogether at all of his establishments. The move is to better compensate those not only serving diners their food, but also those cooking the meals, washing the dishes and making the dining experience possible in myriad unseen ways.

In an open letter posted online, Meyer said that, after a company-wide “robust conversation” about opportunities for career advancement across the 1,800-employee organization, it became apparent that “a major obstacle in this endeavor is the practice of tipping.
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He wrote, “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.” And he noted that the way gratuities are distributed within a company is governed by laws and regulations. “Unfortunately, many of our colleagues — our cooks, reservationists, and dishwashers to name a few — aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants.”

And so beginning with The Modern, the Michelin-starred contemporary American restaurant at the Museum of Modern Art, at the end of November, and rolling out during the next year to the group’s other establishments, guests will be discouraged from leaving cash for their server, bartender or coat check worker; patrons will receive a bill at the end of their meal that has no tip line at all.

To compensate the absence of tips, Meyer will raise menu prices, although he said they will not rise much. Eater (which looked at the move in highly informative detail), however, predicted prices will rise “significantly,” increasing perhaps about 21 to 25 percent, which can add up quickly.

Meyer said the changes will have a “significant” effect on his employees’ incomes and opportunities.

“We will now have the ability to compensate all of our employees equitably, competitively, and professionally,” he wrote. “And by eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work.”

The reaction on Twitter has been overwhelmingly positive, with lots of bravos and no shortage of “tipping point” puns. And the restaurant staffers whose pay is expected to increase as a result of this bold change? It's safe to say they’re probably pretty tickled too.

Photo courtesy of iStock

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