Good that it's all going to employees - if the only net effect is that previously grossly underpaid back of the house service workers (dishwashers and buspersons) get a raise and everyone else stays more or less the same, then fantastic. I remain skeptical (not cynical) that the math works out this way, however; it looks like a way to take income from front-of-house to use it to pay back-of-house instead of taking it out of the house's revenue stream.

For all of these no-tipping folks, I'm still left wondering why not simply bump prices for everything 18.5% across the board, rather than having a fixed surcharge? It can't be that it's somehow an incentive bonus, since it's mandatory.

I'm still left wondering why not simply bump prices for everything 18.5% across the board, rather than having a fixed surcharge? It can't be that it's somehow an incentive bonus, since it's mandatory.

The answer is right there in the article.

“It was really our staff that pushed for it,” says Price. “They worried about having to explain the price increase to every guest, every night.”

“The concerns from staff,” recalls Erickson, “were ‘What will people do if they don’t know anything about what we’re doing with this extra money, if they don’t know it’s going to help employees?’”

“It’s nerve-wracking,” she continues, “wondering if we’re going to alienate ourselves because our chicken is $35, while everyone else’s is $26. Without a service charge, we don’t get to explain why. This is a business: We want to compete.”

Both Erickson and Price see the service charge as an intermediate step: “Eventually we just want to charge what has to be charged to pay people what they deserve,” says Erickson. “That’s where our hearts are.”

OK, I'm glad they dug a little deeper here and gave us some detail. First of all, the decision to not just straight up raise prices was idiotic. Their employees were wrong, and selfish, in suggesting that. If I'm a regular customer and I come in and my meal is $17.50 instead of $15, but there is a notice on the menu that says "we no longer accept tips" I'm either, 1) going to assume that they have raised the price to accommodate for no tipping (duh), or 2) I will ask my server, who will tell me it is so that he/she can make a living wage without having to rely on the mood of his/her customers on any given day, and I will happily congratulate him/her on working for a great employer
I don't understand why that would have been difficult to explain. And I don't understand who would have been upset by the increase. I also predict that a majority of people would not even notice the price change.

Why is it so hard to get restaurants to charge us more? I feel like I'm in crazy town.

@AFinch

In a place where they were pooling tips, this doesn't redistribute income. If the restaurant was not pooling tips, then this does take away money from the front of the house.

In an ideal world, you would just raise prices on average 18.5%. However that has some extra costs. Most restaurants either price everything ending in .99 or price everything in an even dollar amount. So if you're chicken dish was $20 before, you should make it $23.70. However to keep the menu even, you make it $24. If you round some up and some down you should be ok on aggregate. Until you get a week where everyone orders the pork chop that was $23, should have been $27.26, but you priced at $27. The service charge keeps this from happening.

Also, humans are generally bad at math and comparing prices. If you go to one restaurant and all the prices are higher you have a hard time comparing it to another. Even though after tip at the cheaper place you come out the same, most people have a hard time seeing that. They only see the initial price. It's the same reason no one advertises the price after tax on items. If everyone went away from tipping, you could do it. But in the mixed environment, a service charge is probably best.

@Eckstein

Try making that same explanation 20 times a day. How fun is that? Especially when you are making it to customers who are on aggregate bad at math.

basically this restaurant decided servers making that extra $6 or so dollars an hour was not justified. maybe they are right. so they are having the servers pay for a share of the bump up in overall staff expenses and throwing in some income disparity because cook earning around or over $15 were going to be upset. maybe that is fair. something about it all rubs me the wrong way though.f

Wait, why would an 18.5% hike suddenly push $26 chicken to $35 ? That's a 40% increase.

@chefjoe

Closer to a 37% increase. But you can forgive her for talking off the cuff and not saying $31. Like most people, she's probably bad at math. Which is why a service charge actually makes sense.

Since 90% of all productivity growth in GDP has gone to capital (owners) and not labor (workers) since 1971 (an historical aberration as it used to be 20/80 in the US), this is a good start.

But just a start.

Will these new service charges be subject to sales tax? According to the WA State DOR, they shouldn't be.

Oh look, it's this thread again...

@3: Many people won't even get in the door if they see a menu that is 18 percent more expensive than comparable restaurants. It's a very competitive business.

The service charge makes perfect sense until momentum swings and tipping becomes the exception, not the rule.

I'm impressed we found a restaurant owner that isn't acting like a total fucking asshole about this and is finding a solution that isn't based on "FUCK YOU!! I'M A BUSINESS OWNER AND THE MOST IMPORTANT PERSON ON EARTH!!! HERE ME BITCH!!!!"

Seriously, this is pretty reasonable

I'm not going to eat at places that have a 18.5% SC. It seems like such a Arbitrary number in the first place.

A Tip is/was always discretionary. The amount based on Factors decided by the customer.

Now a "Tip" is MANDATORY. FUCK THAT!

I don't care about Offsetting a owners cost/overhead. That's his/her problem.

It's not the customers job to underwrite the cost of waitstaff healthcare. That's a employers job/expense. It's the cost of doing business.

If a owner paid a expense before April 1st. Then he/she should pay it afterward too.

When I go out, I want to pay for food. Not for my waiters dental plan.

If I were to call in a to-go order and picked it up myself, would there still be a surcharge?

@14:

Name a place where you can do one without doing the other? Hell, even if you buy your food directly from a farmer, they gotta pay for THEIR dental plan, so they're going to factor that into what they charge you for those Rainier Cherries or Yakima Sweet Corn or whatever you get from their roadside stall. And whomever buys whatever you're selling (whether it's a customer purchasing goods or services or an employer purchasing labor) is contributing in some fashion to YOUR dental plan, so why are you so opposed to giving back what you get?

Unless you're just a selfish, narcissistic asshole, in which case it all makes sense...

@16, You must work at a reataruant? Because it sounds like I struck a nerve that you feel all too well. I get what you're saying. But, I've seen on the news a lot lately where a owner says that healthcare cost are going to be bore by the cutomer. I.E. not the owner anymore. As they used to before April 1st.

Min wage +tips, (at least in OR where restaurants have to pay full min wage,) even with sharing said tips with hosts, bussers, etc. still works out to a lot more then $15/hour. Just saying.

Total puff piece. Try finding more than 50 words to quote from a server who is being affected by this change.

All Erickson is doing is taking the minimum wage raise out of the pocket of the front of the house. She cannot claim to be acting upon egalitarian principles while using someone else's money to bankroll this equalizing of wages. Tipping is the only thing allowing some restaurant workers to achieve middle-class status. If Erickson really believed in people working their way up to build a career in this industry, why would she work to destroy the institution that makes such a career a possibility? Oh yeah, because the money will otherwise come out of the restaurant's (her) pocket. I call BS on the idea that the front of the house wanted this. I hope they are widely boycotted.