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We found out new details about Danny Meyer's new no-tipping policy at a recent town hall meeting.
When restaurateur Danny Meyer recently announced that he would abolish tipping throughout his Union Square Hospitality Group, he opened the floodgates to questions from loyal customers, industry colleagues and media. To address the many gnawing concerns (bad service! cooks' wages! cost!), he co-hosted a “Hospitality Included” town hall last night with USHG chief cultural officer Erin Moran, chief restaurant officer Sabato Sagaria and chef Abram Bissell of the Modern. (The Modern's three-month trial period kicks off on November 19.) Here, the top five things we took away from the event.
1. Stars will replace tips. Many believe that tipping is the only way to reward good service or punish bad service. In practice, people don’t use tips that way, according to Meyer. “Twenty-percent tippers are twenty-percent tippers,” he said. Still, to satisfy the urge to praise or penalize, he is going to replace the tip line on checks with a 5-star system. In the future, Meyer hopes to implement this rating system into mobile pay technology. The ratings will influence revenue distribution from the night among the front-of-house team, as well as determine who deserves a raise or should be let go.
2. If diners aren’t happy with service, the bill will reflect that. Instead of docking a server the tip in response to bad service, Meyer recommends talking to a manager who will deduct from the cost off the bill. “It’s the same as if the salmon was overcooked,” he said.
3. The change will benefit kitchen staff immediately. The average starting hourly pay for a line cook in New York City is $11. When the no-tipping policy is implemented, the Modern will raise its starting pay to $14 an hour. That news is already attracting potential cooks. According to Bissell, the Modern was short twelve cooks just three months ago and is now getting two to three job applications a day (up 3,000 percent). In the future, kitchen staff will take part in the revenue sharing program.
4. The cost of a meal will go up—but not much more than it would have. While there won’t be an across-the-board cost increase on Meyer’s menus (the price of coffee, for example, will stay the same), meals will be more expensive than they were even with the tip. On average, Meyer said to expect to pay 5 to 8 percent more than you currently would at one of USHG’s restaurants (including tax and tip). That said, with NYC’s forthcoming minimum wage hike, you’ll likely see prices go up on menus across the city, regardless of their tipping policies.
5. A chef is getting married with help from the new policy. On a more personal note, one cook at the Modern told Bissell that he’d propose to his girlfriend on the 19th because he finally knows what he can spend on a ring.