No Tipping Future?

The end of tipping may be coming to New York, but Houston restaurants are skeptical

The end of tipping may be coming to New York, but not yet in Houston

Katie Oxford tips tip jar February 2015
Changes are coming to how and when diners tip, although it's not clear when they will come to Houston. Photo by Katie Oxford

The debate over tipping seems like it will never be resolved. Recently, the usual subjects of when to tip and how much have been joined by new concerns over whether the practice is ethical due to the disparity it creates between servers and cooks (among other reasons).

Regardless of one's opinion, changes are coming to tipping.

On Wednesday, Danny Meyer, CEO of the New York based Union Square Hospitality Group, announced that his restaurants would begin ending tipping beginning at the end of November.

In an article revealing the change, Eater critic Ryan Sutton summed up the decision as follows: "Danny Meyer is eliminating all tipping at his restaurants and significantly raising prices to make up the difference, a move that will raise wages, save the hospitality industry, and forever change how diners dine."

Attempting to summarize Sutton's 6,000 word companion article would be foolish, but it did raise an interesting question: Have any Houston restaurant owners considered dropping tipping at their establishments?

Emails sent to a variety of Houston restaurateurs revealed that they're considering the possibility but not ready to commit to such a radical change. 

"We talked about it overall and at length for Hunky Dory," writes Treadsack co-owner Chris Cusack. "We got really close to pulling the trigger on it. It's a huge risk; I still hope that it'll make sense in Houston for (at least) one of our concepts soon."

New regulatory environment

Part of what's driving Meyer's decision is a new regulatory environment in which the minimum wage for tipped employees in New York is being raised to $7.50 an hour. Per Se, celebrity chef Thomas Keller's three star Michelin restaurant in New York, recently paid a $500,000 settlement to servers over unpaid wages.

Tracy Vaught, co-owner of restaurants that include Hugo's, Backstreet Cafe and Caracol, explains that she's waiting to make a decision until similar legal changes come to Texas.

"There are several models to consider including service charge as opposed to gratuities or including it all in the price of the item. The increase in price would be dramatic. Probably in the 25-30% range to cover the new minimum wage hike, taxes etc," she writes. "Going out is optional, it’s going to be a real problem for us in this industry. The National Restaurant Association and Texas Restaurant Association will be weighing in soon with the details, and we will be watching that very carefully."

In addition to a concern about how customers would respond to higher prices, Cane Rosso owner Jay Jerrier worries that waitstaff would leave for higher paying, tipped jobs at other restaurants.

"We almost had a revolt when we started putting tips on checks instead of cash at the end of the night," he writes. Those are real concerns given the problems many restaurants are having finding a sufficient staff.

Issue isn't going away

While the time may not be right for Houston businesses to eliminate tipping, the issue isn't going away. Weights + Measures co-owner Mike Sammons tells CultureMap that he and his partners considered service included pricing for their Midtown restaurant but decided it would be "too risky" at a new establishment. Still, he understands Meyer's decision and acknowledges that change is likely coming. 

"The current system in our country of remuneration for service staff is antiquated and bizarre," he writes. "In any part of a business, be it a restaurant, bar, accounting firm, retail shop, whatever, any area that is not under control is an area that needs attention and needs to be changed.

"The tipping policy in our country is nearly impossible to control . . . Eventually, I am sure that we will all end up with a service included system but I think we are still a little behind as far as the perception of fair payment to service industry workers, front of house as well as back of house."