Assorted links

1. John Cochrane on the case for gold.

2. An update on European economies, including some pieces of good news.

3. Miracle Village, Florida.

4. The experiment with a tipless restaurant, part II here.  Here is one good passage: “The other reason we didn’t accept tips was that removing any option for tipping was the only way to remove those two parasitic businesses — the side business between the server and guest, and the side business between the server and cooks — from our own company.  By not allowing these side businesses to exist, we created an environment where all of us were engaged in only one mission, our stated goal of creating remarkable experiences for our guests, around local food and drink.  Being in only one business made us like pretty much every other company in America, except that it also made us unlike any other restaurant in America.”

5. “Borges never wrote a work of fiction longer than fourteen pages.”

6. Hermit shell crabs and city skylines, from Japan.

Comments

#4, kinda creepy. Guy makes a deal about how the customers want to be able to control the wait staff as if they were strippers and get mad when that ability to control is removed. Sounds to me like as an owner/operator he just wants to remove the competition. When I waited tables, the occasional obnoxious controlling customer I could deal with, because he went away. Dealing with the caprice of overbearing managers and owners was a lot more difficult.

I think the guy misunderstands the nature of tipping, anyway. Guess he never worked for tips himself. The obnoxious guy who hints at a big tip for the waitress that serves him like a stripper -- he's never the guy who leaves a big tip.

Agreed that the stripper analogy is overblown and weird.

But what do you mean by competition? If you are referring to within-restaurant competition with the owner, then yes, he wanted to remove it. That is the whole point. Most businesses -- and most restaurants outside of the US and a few other countries -- don't have to deal with employees who are actively incentivized to compete against the owners' wishes.

Most managers at restaurants and bars simply align their best interests with that of their wait staff. But I can see the benefit of removing that competition. My point is that he is framing the situation to make himself look like the protecting prince for these poor otherwise-exploited women (and men, you would guess, although his language inclines against that). While if you accept his metaphors and take them a step up, this is more like a turf war between pimps and Johns.

It's creepy how frequently women resort to calling men creepy these days.

What's amusing is that the owner is actually himself implying that these men were creepy for wanting to brandish tips as a way of eliciting favors from his female staff, but his observation is itself being called creepy.

It's o.k., there are a ton of creepy women out there, too.

What you note was on purpose. He is trying to characterize tipping men as these gross perverts trying to get their jollies by making women dance to their tune for tips. I'm simply applying the same standards of prejudgment and stereotyping to him. While it's hardly uncommon for some drunk bore to try to use diminishing tips to get a pretty waitress to be nice to him, it rarely works out, because catering to the drunk bore is not worth the $20 extra you probably won't get anyway because it's being promised to you buy, well, a drunk bore.

But the scenario of the owner or manager of the bar or restaurant hitting on the young staff is hardly a shockingly unknown one -- ask anyone who has waited tables and they'll give you a bunch of stories. The stakes for not smiling at your manager or the restaurant owner, those are higher than one tip.

What the owner is saying here is that people are beholden to the ones paying their wages and that can be a creepy thing in an industry where social interaction and looks play in to the success of the worker. That holds, however, whether the wages are being paid by one manager or by a hundred customers over a weekend, and so if there's a creepy factor as the owner claims, better to disperse it, I'd say.

It may well be that his restaurant profits more if he takes out the tipping element. It just irks me that he's playing it up as a big benefit for his wait staff.

You make a good point that the success of the no-tipping model may be contingent on having a reputable, or at least revenue-maximizing, owner. If the owner is just trying to personally exploit the waitstaff, I could see how tipping culture offers a modicum of protection.

But this guy, at least as he sounds in his own not-exactly-neutral blog post, seems more concerned about revenue. And he actually ran two restaurants. One with tipping and one without. The one with tipping resulted higher variability in staff pay, and in more staff turnover. The one without resulted in better staff retention and more dependable revenue streams. He doesn't say which restaurant had higher time-averaged median staff income. But knowing what we known, which one would you rather work at?

Good question. Hmmm.

As a waitress, you mean, right? Because I'm not seeing the above as auto-benefits for a restaurant owner, either. If your revenue stream is consistent but 20% lower than the average when it had hills and valleys, that's not an up side. If employee retention means the duds who drive away customers hang around, that's not good.

But as a waitress, which environment would I prefer?

If I liked stability and wanted to know I'd be bringing in the same amount of money every week; if I hated the sniping and fighting for the tables and bribing the hostess and all that and preferred a non-competitive and non-antagonistic environment; if I wanted to work during the week and take weekends (big tip times) off, or work on slow nights instead of busy (Wednesday evenings = no tables); I might choose the no-tip restaurant.

If I wanted to be able to kick up my earnings; see a direct relationship between my hussle and my pay; didn't might tussling and fighting for tables; wanted to challenge myself to be able to cover more tables at once than my co-workers; was happy to see folks leave that couldn't take it, because then I get more tables; was either a super-worker with an incredible work ethic or a dirty fighter who put myself above everyone else, I'd likely work for tips.

It's great to have different options, not everyone would choose the same way. But one option is not necessarily best for everyone. I just don't think this guy is doing anyone any favors.

Removing tipping also makes the server's wage constant over their shift - so something like folding napkins, polishing cutlery etc. which is typically done at a lower wage during non-peak periods would now have to be paid at the same, higher wage.

But is it really "tipless"? They add a "service charge" to each bill

Cynical me suspects that Jay Porter's no-tipping "innovation" had less to do with a genuine outrage over the inequality or unfairness of tipping and more to do with a cunning way to somehow get his restaurant talked about. He did get awesome NYT coverage for his no-tips policy rather than the quality of his menu.

Eventually, publicity is good publicity......

If he wants to get rid of tips, why tack on a sneaky service charge? Why not just increase your menu rates?

To me the most annoying part is a mandatory service charge that is sneakily added on to the check at the end. When I read a price on the menu all I expect to pay additionally is statutory taxes and anything more to me is a sneaky business practice.

I'd much rather have discretionary tipping than a mandatory post hoc service charge. If you have the guts, increase your menu prices.

Current law and the general industry practice favors service charges vs. menu price hikes. If you raise the price of everything by 20%, people will react very differently by just not showing up anymore. It also allows the wages of the staff to vary based on sales and how busy the restaurant is rather than having the restaurant bear all of the risk if the wages were fixed.

To your first point: If being honest about your policy rather than tricky about it makes people go away, then it's probably not a very customer friendly policy.

To your second: You could incorporate the "tip" into the menu cost by paying the staff on commission.

These days it feels like the American consumer prefers being tricked. He doesn't trust anyone who isn't obviously trying to play him, and he figures anyone who is honestly not trying to get away with something isn't smart enough to deliver a good product or service. Or cool enough to deliver a trendy product or service. I'd also frequent a restaurant with higher menu prices over one with low food prices and a service charge added. But I'm also about the only person I know who doesn't think supermarket loyalty cards are saving her money. . . . .

A mandatory service charge is a useful shorthand to indicate that tipping is not expected.

Depending on the state, "mandatory" service charges aren't actually mandatory. I've had the experience (in California) of being in a group large enough to have the "mandatory" 18% added to the bill, but due to the rather poor service, the group did not want to leave much tip. We left about 8%, and the manager admitted that they couldn't enforce the full service charge.

The odd thing about tipping is that essentially no other English speaking countries practice it - and particularly in the case of Australian comments on the web talking about visiting the U.S., they find it really disturbing. But then, Australia is a fairly egalitarian place.

In general, most people I know who aren't Americans but who do live in industrial nations see tipping, as compared to paying a normal wage with normal benefits to a normal employee of a business, as being essentially exploitative. Admittedly, even the most right wing of these people are flaming socialists by American standards (none have any desire to end universal health care, mandatory vacation time, or the legal protection of employment contracts, for example).

In addition, both the Australian commenters and the people I talk to about the subject think service in America is quite good compared to their own country. However, all of them are aware of why that is, at least in the context of restaurant service, and it disturbs them to a large degree (much the same way that so much American retail friendliness is based on the reality that most employees have zero job security, another thing that most visitors view through a perspective that is considered 'socialist' in contemporary America).

Tipping is customary in Canada. http://www.tripadvisor.ca/Travel-g153339-s606/Canada:Tipping.And.Etiquette.html

European in America: The service is good, and the people are friendly!
European #2: Yes, very disturbing.

Interesting, not my experience in the UK at all. Some restaurants say "service charge included," while others make a point to say "service charge not included." Some, but not all, have service charge percentage options show up on the handheld credit card devices. The typical rate is lower than in the USA, though.

Your post does not correspond to my experience in Canada or the UK. Are you sure that you aren't stiffing people who expect and deserve a tip? If so, then you are the exploitative one.

You may be right about Australia. But a definition of "essentially no other English speaking countries" that excludes the UK and Canada is odd. Tipping is definitely expected in the UK at restaurants unless a service charge is included, in which case it will be noted. 10 to 12, maybe 15% at most though.

My experience in Australia is that most Aussies think they have no tipping in their country; but most Aussie waiters do think they have tipping. And the the waiters like it.

We tip in Canada and in Germany a small amount of tipping happens, in Asia tipping is not customary

Does #4 mean no more crouching waiters, conspicuous mirroring, or smiley faces on the check? [Hopes]

Our local golf course has a service charge in the clubhouse similar to what is described in the article. It doesn't work. I am assuming this is due to a lack of true management of the club, but could the service charge also cause the servers to assume they are going to get paid no matter what?

#5 is great. Borges is a treasure. I thought the article ended on a real sour note though:

"An aloofness from mere politics seems like a strength in his fiction, but it’s hard to come away from reading these interviews seeing it as anything other than a serious weakness in his life."

Please.just.stop.

Really, what a foolish reviewer. The whining toward the end was obnoxious.

Yes, a disgrace for the New Yorker to publish it, and for Tyler -- who likes Borges -- to link to it.

but "... a retreat into the luminous mist of his own blindness" sounds more understanding (or wistful) than deeply critical to me.

I live just down the street from The Linkery (or what used to be The Linkery) and there's definitely more to the story of the tips-less experiment than what the owner wrote.

Service at The Linkery was notoriously horrendous. The servers thought they were God's gift to humanity and that they were doing customers a big favor by bringing food out or stopping by to check on customers. Read some of the Yelp reviews for corroboration. No tips meant no accountability and, vague mumbo-jumbo about "focusing on the food" aside, a worse dining experience. Add the mandatory service charge to the already marked-up prices that were some of the highest in the neighborhood and you have a recipe for culinary failure.

Fortunately, the free market is a wonderful thing and there are plenty of amazing spots nearby that have cheap prices, delicious food, and great service.

I agree, I also live just down the street from The Linkery. The service was...not good. Any comparison with his other restaurant (El Take It Easy) is going to be hard because the food there was...not great (and certainly the restaurant was nowhere near the quality of The Linkery). There's a reason that El Take It Easy shut down, reopened as Hubcap for a couple of months, then it and The Linkery also went under.

The Linkery and El Take It Easy were clearly great restaurants for the area when they opened, but the quality of the food in the area has risen enough that they were no longer standouts.

Certainly seems like part of his problem is the various Labor regulations making it illegal to split the tip with other staff or in CA to pay servers less to reflect tips.

#4 is no different than attempts to end commissions for employees in sales (often done by owners and managers annoyed that someone "below them" makes more money, even as they protest that it's about those back office employees). And yet commissions endure.

True. Discussions about tipping usually ignore the true purpose of tipping for the restaurant: it turns the service staff into a sales staff. The sales pitch to order the special or an expensive bottle of wine or coffee or dessert, that's because of tipping. It drives the sales of a restaurant the same way a corporate sales staff on commission drives the sales of a corporation. A restaurant with tipping is "like pretty much every other company in America". Replacing tipping with a flat rate does continue the "sales staff" model, and the author is correct: it eliminates the parasitic side business between server and guest. However he isn't frank about what exactly this "parasitic side business" entails. It entails the server undercharging the customer in exchange for a higher tip. This practice is likely what the restaurateur is really trying to eliminate. Has nothing to do with "creating remarkable experiences for our guests".

Side business -- yes, but only when your employees hate you. Well, mostly when your employees hate you.

When you charge off this or that, it can indeed bring up your tip. But if you do it properly, it brings up the rep of the restaurant, makes it feel personal, caring, like you are known there and important. That's part of the job of the wait staff, to make the restaurant look good. "Let me just top off that ice tea, I won't charge you" may lose a dollar for the restaurant in theory, but in reality it can build the kind of good will that gets the guy buying dessert and recommending the place to his friends.

"Let me drop off a bourbon on the rocks and not charge you" is not a side business, it's stealing, and should be addressed as stealing, not a tipping issue.

Nah. It's more subtle than that. It all goes unspoken. "Forget" to charge for the third round of drinks, say. Be all too quick to take that entre off the bill because the customer didn't think it was "great". It particularly explains why he didn't want customers to tip over 18%. High % tips are the red flag.

Has nothing to do with hating your boss. Just businessmen&women doing business, responding to market incentives.

Ah, well, I would call the first theft.
Second is fuzzy (particularly since the free food might benefit the restaurant but will almost definitely benefit the waiter; while not comping the food pretty well guarantees the price of the meal will be largely deducted from the tip) -- so I'll give that to the businessmen doing business etc.

The thing is, watching out for these things, preventing theft, and working with market incentives and businessmen is tiring. You're kinda working with a ton of subcontractors. This can benefit your business because people normally work better for themselves than they do for a boss, but sometimes it's easier to just hire a crew.

The Frontier Restaurant in Albuquerque, a well-known student hangout and many times winner of the Best of Burque for its green chile, its flour tortillas, and its breakfast burritos, has been tipless forever. You go to the counter, place your order, and sit down until your number is up on one of the many screens in the place. You get your coffee cup or drink cups at the counter and go tot the coffee pot or soft drink machine to get it. There is no tip jar - what they charge is what you pay. I don't know what they pay their people, but I have never heard anyone complain about the service.

This sounds more like a fast-food place than a restaurant with "deliver to your table" waitstaff. Such places rarely produce tips (although they do try with tip-jars, which most people ignore).

Where things get interesting is "hybrid experience" restaurants where you order at the register but have food delivered to your table (ie, Sizzler) or some buffet places where drinks are served and old plates taken away by bussers. Do you tip at these and how much?

At buffets where folks bring drinks/pickup dirty plates I think it's expected that you tip around here. I appreciate that they come check on my drink and get my salad plate out of the way. (A Ryan's, Golden Corral, or Chinese Buffet is the model I'm thinking of here.)

We have a few places around here (Nashville TN) where we order in line then have food brought to table with minimal other service, and I'd occasionally leave a $1 or something small - but these were at places like a little barbecue sandwich place we'd go to regularly. I understood that tipping isn't expected, but I figured they're fast on getting food out and save me from having to go to the counter when my number is called and they do work hard. We'd get our own refill. I think a small tip in those situations is sometimes warranted (my friends often wouldn't tip I don't think and certainly nobody expects it I'm sure so I doubt they make much from tips), but I guess sometimes you do it because it seems like the right thing to do and hope they remember you next time to make the next visit more friendly.

Part of the commentary around misaligned incentives rings true based on comments my wife made back when she worked as a waitress a) having to bus tables herself because the busboys weren't doing their job, b) not having the cooks care about the food quality, c) other waitresses being unwilling to do any of the side jobs that were unrelated to tips such as salt/pepper, napkins, ketchup bottles, etc.

I am glad you linked to the interesting comments on Borges which I would have otherwise missed. The writer gets some things right but I don't believe for a second that Borges was, as the writer hints, more exclusively "masculine" than other writers of equal talent- after all, he was exceptionally devoted for more than half a century to his mother, who was logically and necessarily female, and huge swathes of his favorite writers, including Shakespeare and the composers of the Norse sagas, clearly spent enormous amounts of time with fascinating women, and probably incorporated much of what those women said into their surviving works. Also, the writer doesn't seem to get that Borges (like his contemporaries Joyce, Nabokov, and Wodehouse) never had anything close to a serious intention of being a primary source of poetic inspiration, but rather aimed only at truthful and unprecedented but nevertheless secondary or belated poetic and metaphysical effects (in contrast to writers like Undset, Tolkien, Waugh and Juan Ramon Jimenez, who all tried for primary relations with truth, and none of whom are usually thought of in the same category as Borges, I would guess). Btw, and slightly off topic, all the male writers I mentioned (except Wodehouse) were theoretically young enough to legally marry my grandparents' daughters, and like my grandparents, I would have been appalled at any such marriage.

sorry for the excess verbiage - last phrases should read "all the male writers I mentioned (***including*** Wodehouse) were ***theoretically and practically*** young enough (leaving aside the issue of bigamy) to marry my grandparents' daughters"... a detail included in large part on the off chance that some young person reading this (in 2013, 2023, or at some other random time) is over-impressed with a potential spouse's artistic gifts (which, in my experience, are neither correlated nor uncorrelated with the essential gifts of kindness and (usually) practicality)

Part 3 of the tipless restaurant - http://jayporter.com/dispatches/observations-from-a-tipless-restaurant-part-3/

Coming back to this post a week later, I'm unsurprised to see that the vast majority of comments are negative reactions to #4. Jay & The Linkery really touched a cultural nerve.

I could not resisit commenting (not something I usually do)
on how much I loved your blog.
I am a London comedy club and would love to link to it as
I think people would love it.
I will definately be by again soon to see more.
Keep up the good work.

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