It's hard to really pin down the number of casual restaurants that have gone, or are currently going, tip-free. Hoffman shared a spreadsheet of 212 restaurants. For this story, I reached out to 30 around the country, and heard back from half.
As you might expect, opinions and experiences were all over the map. ChefStable's Kurt Huffman was the most vociferous opponent of going tip-free after doing it at his beer hall, Loyal Legion. Huffman was paying $18 an hour to front of the house (which would get another $3 an hour because "people still left tips no matter what we said") but after four months he sat the staff down and admitted he didn't think it was working. Customers were weirded out and drinking less. Servers weren't making as much. The bar was losing money. "My hubris had overwhelmed my business sense," he said.
When it switched back, Huffman kept the pay raise for the back of the house but started paying servers $10 an hour again. Within one business cycle, the servers began averaging $32 an hour, making 50% more than they were during the no-tipping experiment. On top of that, Huffman's costs went from $21 an hour to pay front of the house (including tax) to $12. "I'd cut my costs in half and raised my server wages by 50%. And this is the only one of my restaurants out of 20 where we've had no issues keeping kitchen staff."
He admits Loyal Legion's size (there are only two people in the kitchen, as opposed to a bigger restaurant with, say, 12-14) also helps. "I'm not sure how you'd digest the cost of the raise to the back of the house in a big restaurant." But he's also wary of the idea that the system can really change. "When you start embracing the hubris of trying to alter an entire business model, it's really risky. All I can say is 'good luck with that.'"
Adam Hebert, managing partner at The Radler in Chicago, also moved back to tipping after a year, but had a considerably better experience. "Switching back was one of the hardest decisions I've made in this business." Hebert said that eliminating tipping offered up "so many positive aspects, it was mind-blowing." He rattled some off: "Restaurant was easier to manage, entire staff was more hospitable and effective, entire atmosphere much more positive."
One of the biggest criticisms of no tipping is that service drops off, but Hebert disagrees. "Service got better -- the mentality of why we're doing what we're doing changed. Before, no one wanted to help anyone else be a server either, because they were territorial, but now the more senior servers started training each other to gain more responsibility. I had bussers who'd been just that for eight or nine years, and now they're learning how to talk about beer, and make simple cocktails, and do things to help out the staff, because everyone benefitted."
In the end, he said, they had to switch back because of two reasons. The first was financial. "We just didn't make enough money to sustain it, honestly." The second was more complicated. "It was kind of a turn-off for people coming in," said Hebert. "A turn-off in the sense that they didn't understand it. And it's not the consumer's job to care because they have no incentive to say, 'I want this to be different.' Until that happens, I think we'll have a hard time changing what we're doing."
Chef Cara Stadler, who, along with her mother, owns and operates Brunswick's Tao Yuan and Portland's BaoBao Dumpling House, became the first Maine restaurant owner to make the switch, adding a service charge. Now three months in, she -- like many others -- immediately noticed a change in the way people ordered. "They're now spending more money on food and less on alcohol. It's just hard to rationalize that second drink with the surcharge."
After the change, she lost 50% of her front-of-the-house staff. And she admits to taking a financial hit, estimating losing, at least in the short term, "$30,000 or so." Despite that, she remains philosophically opposed to tipping.
"Everyone talks about sustainability of their food, but I think we should be talking about sustainability of our staff, too," she said. "At what point is it worth just paying your bills if it's to all these unhappy ends? Americans have shown that they'll take moral stands if they feel like a company is mistreating their employees [she mentions Walmart], but I'm just not sure if the American public is truly informed as to what's happening in restaurants right now. I have to believe that once they really know, they'll be ready to make that change."
Stadler laughed. "God, I hope it happens sooner rather than later."