Service charges – just the tip of a deadly iceberg

06 June 2008
Service charges – just the tip of a deadly iceberg

Take any group of restaurateurs, start a discussion on service charges and tipping, and you risk the debate getting overheated. During my committee meetings at the Restaurateurs Association I soon learned to proscribe debate on the subject for fear of not getting anything else accomplished.

For the record, I believe that, in the interests of the customer, it would be better if all restaurants treated service in exactly the same way; and if legislation is the only way to achieve that, then so be it. Others believe that the rights of restaurateurs should outweigh the public interest and argue for the confusing status quo.

We in Britain are clearly not at peace on this issue. But in the USA everyone agrees that tipping is the only way to go. Right? No, very wrong!

I recently learned of the existence over there of a kind of guerrilla army of socialist-thinking restaurateurs who believe that tipping is a bad idea because it demeans the person and devalues the work and status of servers.

Some years ago, the proprietor of New York's mould-breaking Quilted Giraffe restaurant, Barry Wine, decided to put his socialist theories to the test. He paid servers a flat salary of something like $25,000 and forbade them to take tips.

Curiously, about a year after starting his "ennobling" experiment, his formerly sound and profitable business went "splat". Were the two events connected? Maybe, maybe not, but it's beguiling to think so.

Clearly, no lessons were learned, for I just read that Charlie Trotter, the famous Chicago chef-entrepreneur, is trying something similar. The headline read: "Trotter offers fixed salaries to servers." His intention is to make servers less dependent on the irregular nature of customer tipping and thus get them to think of themselves as equal to his customers.

In justifying his decision, he was quoted as saying: "When you treat people like they are real professionals, that's a better way."

His attempt to improve the status of servers and elevate their skills to an altogether higher plane is plainly laudable. But, personally, I think that the way servers are remunerated has no bearing on their perceived professional status.

Professionalism

The status of a typical French waiter, regarded the world over as a paradigm of professionalism, has not changed at all since France introduced a "servis compris" policy some years back. They were professionals when they were tipped and they are still such now.

Space permitting, I could make a good case for allowing customers to decide directly and immediately the amount of a server's remuneration. What better example is there of capitalism in action? And doesn't capitalism, in turn, encourage professionalism? I think it does.

But back to Charlie Trotter. What's different about his plan is that he won't be abolishing tipping and replacing it with a mandatory service charge. No, he's going to pool customers' tips and use those to supplement the hourly rate he pays servers in order to make it up to a guaranteed fixed salary. In other words, he's taking the "tronc" system, so familiar to Europeans, just one step forward (or backward, depending on your view).

All has been said

But his system raises at least as many questions as it purports to answer, and I could comfortably fill at least two more Viewpoint columns just listing them. But that would be pointless, as practically everything there is to be said on the subject has been said many times over.

Naturally enough, I think that my views on this controversial debate should prevail. However, I am resigned to the notion, after years of listening to all sides of the debate, that simple solutions will not be forthcoming.

I doubt that Solomon, with all his wisdom, would have had an easy time on this one. But, with all the wisdom that I can summon, I have decided that there are just two certainties about service charges and tipping. First, restaurateurs will never come to an agreement that satisfies all camps. Second, we can hold whatever position we like, but however it's packaged, the customer will always, in the end, be the one who pays.

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