Tipping at restaurants is a practice so deeply ingrained in our culture, that it’s hard to imagine enjoying a meal out without calculating that 20 percent. But the times might be a’ changing in Asheville.
Blue Dream Curry owners James Sutherland, Chris Cunningham and Sean Park recently made a surprising move when they eliminated tipping from their downtown restaurant. While rare, the decision isn’t unprecedented. The concept of a no-tip restaurant gained national attention in October when Danny Meyers of the Union Square Hospitality group in New York City, decided to eliminate tipping from over a dozen of his restaurants.
While the idea of a no-tip restaurant doesn’t yet qualify as the next big thing, other local restaurant owners are considering the move, and almost everyone in the industry seems to have an opinion about it. For Sutherland, Cunningham and Park, it’s partly a matter of principle.
“For a very long time, servers have been paid $2.13 per hour plus tips. This means it’s up to the guest to subsidize the server’s pay,” explain the owners in an email exchange. “We believe it is our responsibility to compensate our team and not our guests’ responsibility.”
Base pay for all staff at Blue Dream Curry is now $12.50 per hour, which is the living wage in Asheville as certified by Just Economics. Staff will also receive a guaranteed bonus based on a percentage of total sales. The owners anticipate that with a sales increase, employees should receive a pay range of around $17-$25 per hour. “Along with regular raises, paid time off and other benefits like shift meals and discounts for their families, we feel like this is a total package that works,” say the owners.
Taelin Frasier has been working at Blue Dream Curry since it opened in May and has worked in the restaurant industry for much longer. “It’s definitely different than I’m used to. I’ve worked in the restaurant business most of my life,” says Frasier. With the previous system, he says, his paychecks were “next to nothing” after taxes. “So, I think in the long run, it will be better for me. And it doesn’t matter if it’s a slow day or a busy day; I’m still going to make the same amount of money.”
The owners say responses from other employees have been similarly positive. No one has quit in reaction to the new arrangement, and they say they have experienced an increase in applicants for all positions.
The no-tip restaurant model still seems like a fringe movement, but other local restaurant owners have been paying close attention. Katie Button, co-owner of Curate and Nightbell, says that while she has no immediate plans to change her restaurants’ tipping policy, it’s a possibility for the future. “Certainly Danny Myers taking that step was a big indicator of the direction that people are headed,” says Button. “I do think that if [eliminating tipping] allows restaurants to offer benefits, pay their staff — both back of the house and front of the house — fair wages and have direct control over performance reviews of their staff and promotions and incentives and things like that, then I am all for it.”
Button recently began offering employees health insurance, and she says that offering paid time off is in the works. “We’re moving into creating the restaurant industry to be more like the way a general business is run,” she says. “I think it is just going to take a little bit of time for people to make that adjustment and figure out how that is going to work.”
Meherwan Irani, owner of Chai Pani, says the decision to eliminate tips isn’t a trend. Instead, he says, “It’s a response to some serious issues in the restaurant industry that are calling into question the way we handle compensation and benefits for staff.” The solution, however, isn’t so cut and dried, he says. “It’s easy for people to say, ‘Well, why don’t restaurants pay their staff better and give them benefits?’ The simple answer is that most independent restaurants can’t afford to. Whether it’s fine dining or fast casual, margins are wafer thin.”
He adds that Chai Pani is in the middle of figuring out how to combat these issues. Like Button, he started offering health care to the restaurant’s 30 full-time employees this year. “We pay a premium for high-quality ingredients, we regularly give raises to match the cost of living, we offer paid vacation time to our salaried employees, we promote to management from within, and we’re continuing to look at ways to improve the quality of life for our team,” says Irani. “But it’s incredibly hard to do all that in a casual restaurant where the most expensive thing on the regular menu is $10.99. And we agonize over raising the price on anything by even 50 cents, worrying that people may think we’re getting too expensive.”
Customer reaction is one concern with eliminating tipping, but so is the reaction from servers. Malcolm Knighten has been working in the restaurant industry for 15 years. He currently works at Sovereign Remedies and says, like most servers, he never sees a paycheck. “My paycheck goes completely toward paying taxes, and I will still probably owe money at the end of the year,” he says. “So I live totally off tips.” He’s fine with relying on the generosity of customers for his income, as he doesn’t feel confident that his employers could match the income that he makes from tips. “Nobody wants to take a pay cut,” he says.
He also says the the tipping system (and the amount of money that goes along with it) is the major appeal of the service industry. “Every time someone comes in and gives a tip, they give it willingly,” says Knighten. “And that’s kind of a good feeling. … People are giving me money because they respect and appreciate what I’m doing.”
Taken all together, it appears that restaurant owners and employees want the same thing — to work in an environment that is supportive and professional and where everyone is making good money. Irani says that for major changes to happen and for those goals to be met, the community must also get on board. “Kudos to Blue Dream and other restaurants looking for a different approach,” he says. “But at the end of the day, it’s the customer that will have to decide whether they want to pay for a change or not.”