
The American System of Tipping Makes No Sense - flurdy
https://www.theatlantic.com/ideas/archive/2019/10/american-tipping-system-makes-no-sense/600865/
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hn_throwaway_99
Feels like we have these tipping articles every two or three months now.

1\. Yes, tipping in the US is insane, and it's getting more insane with iPad
tipping.

2\. No, it's not ever going to go away in the US. There are many, many stories
of restaurants that tried to go no-tip (and crowed about it) but eventually
had to go back to tipping because (a) the best servers prefer tipping and (b)
people will judge you more expensive, even if you're not compared to their
price+tip.

3\. If you are a highly paid professional living in a major US city, you
should tip and tip generously (assuming normal or better service). At the end
of the day the difference to you is a miniscule, teeny amount of your salary,
but for the server, barista or cashier receiving the tip it's a huge
difference.

~~~
luckydata
Or, simply stop tipping altogether, cold turkey. Let's do that all at once.
Tipped professions will turn on a dime and start expecting a living wage, and
everything will be fine, just like everywhere else in the world.

When things don't make sense you DON'T need to participate in them.

~~~
jandrewrogers
Tipping is important to many people who already make a solid living wage, it
is what puts them in the middle class. I know people that earn $60-70k, some
significant fraction of which is tips. It isn't just important to low-wage
workers.

An under-appreciated aspect of tipping is that it is a form of wage elasticity
in industries with small margins and highly variable revenue. Hedging revenue
risk is going to come out of employee paychecks, and tipping allows the
employee to take on some of that risk for higher average take-home pay.
Eliminating tipping has been tried in bars and restaurants many times in the
US with poor results, such that they revert; employees hate it because they
would rather have the income variability and higher average income, and it
also impacts the quality of their hours.

There are some complex economics going on with tipping that it would be
foolish to ignore.

~~~
throwaway808080
What’s so special about US. Rest of the world is doing just fine right ?

Why does someone need to survive on tips? Why can’t it be part of their base
pay?

What I hate about US tipping is that tips are a 15% hidden tax. It’s expected
out of you even though the service is terrible. People get legit mad if they
don’t get their minimum 15% tip.

~~~
jandrewrogers
The economic structure of tipping is _not_ equivalent to adding 15% to prices
and adding 15% to wages with no tipping. It produces different outcomes for
employees and they demonstrably prefer their outcomes under the tipping model
in the US. Industries with tipping select for employees with these
preferences.

Adding tips to base pay necessarily lowers aggregate income for employees in
return for less income variability -- it is a tradeoff. Many people who
receive tips are not "surviving" on them, their base pay is more in line with
median western European incomes, so many American employees can afford income
variability in exchange for higher average earnings, and people that cannot
afford income variability select industries without it. In practice, this is
their preference and it has been tested in the market many times. Every time
tipping has been eliminated in the US in a business neutral way, the employees
revolt because it reduces their effective total compensation.

Employees have all the power. Tipping being preferred in the US is almost
certainly an artifact of the US having higher incomes than most other
countries, a much larger percentage of the working class can afford income
variability which creates an employment market for people with this
preference. The median American has $1000/month left over after all ordinary
expenses, which is more than enough to float some income variability if it
means they can earn more.

~~~
shiitake
You make good points. I wish your posts had a bit more visibility to the folks
who hate tipping.

Tipping not only produces different outcomes for employees but it also impacts
employers and customers. Even if you raise prices 15% it still won't be enough
for most restaurants to keep their entire floor staff. Restaurants will be
forced to cut hours and/or staff - this will lead to worse service and more
unhappy customers.

And this has been my experience when visiting countries that don't have
tipping (primarily the UK). Most of the restaurants are understaffed - there
would be a single server covering 10+ tables. And because of that the service
was really slow. And slow service is not only frustrating for customers but it
is also bad for restaurants (fewer customers = less items sold).

I always get the feeling that the people who hate tipping the most have never
actually worked in an actual restaurant.

~~~
luckydata
That's complete nonsense. It makes no mathematical sense and if your business
relies on the public's largesse to pay your own employees then your business
is not sustainable.

The intellectual backflips people perform to justify this abhorrent, classist
performative display of daily piety are a sight to behold.

~~~
luckydata
I forgot to add: wages are tax deductible for the employer.

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Mindless2112
Tipping needs to go. It's discriminatory and a PITA. But I think the only way
we'll get rid of it is if it's made illegal.

~~~
Aperocky
That's impossible. People's freedom to give other people money on their own
volition as a personal gift will not be infringed. We can argue about whether
tipping is good or not, but you will not (realistically, it's a non-starter)
ban my ability to give it.

~~~
arcticbull
Tried tipping a police officer lately? How about a border guard haha.

You absolutely can restrict it. An employer can forbid their employees from
taking tips, there are plenty who do so already. There's all sorts of
regulation around tipping, and under federal law, employers can require
employees to participate in a tip pool or otherwise share their tips with
other employees.

That means by extension that the state or federal governments can require
employers forbid employees from taking tips. You're free to give anyone you
want money in a personal capacity but in a professional capacity their ability
to receive it can absolutely be curtailed by the government. There's lots of
prior art here, especially around business conflict of interest. You can't tip
a government employee for their service.

As a thought exercise, if you go to a restaurant today where tipping isn't
permitted, you offer $10 to the server. They refuse, because their employer
doesn't permit them to accept tips. What do you do? _Force_ them to take it?

~~~
glofish
This is a false analogy.

You can choose to go to a different restaurant, you can't choose to deal with
another government. Hence the rules should be different.

The rules and regulations of a governmental agency do not need to have any
bearing on the rules and regulations of a private business.

~~~
arcticbull
Conflict of interest rules apply the same way to governments (foreign and
domestic) as they do to any other company you're considering doing business
with. You can't give their representatives gifts either over a handful of
dollars, if you've ever watched a compliance training video at work. I'm not
using this as an analogy, just as prior art in the restriction of your ability
to give arbitrary 'gifts' or 'expressions of gratitude for someone having done
their job'. I mean, why can't I tip a police officer who came out really
quickly to look into my home invasion? It's _my_ money and I'm not paying them
to do anything they _shouldn 't_. I'm just grateful they did their job.

The point remains, you can give anyone gifts in a personal capacity, and there
are restrictions in a professional capacity.

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gamesbrainiac
This also made no sense to me when I visited the US. If you don't tip, people
are going to be seriously mad at you. Living in Europe, you never tip. You
just pay for your meal, and you call it a day.

~~~
svara
Where in Europe are you talking about? Here in Germany, and everywhere I've
traveled so far, tipping is expected. You just tip less than in the US. I
guess you could not tip, but your server will be miffed and assume something
was wrong with the food or service.

~~~
gamesbrainiac
I've been to Germany on several occasions, and I've never tipped, and have
never seen any of my German and/or European friends tip. Sometimes, you just
round up to the nearest whole number, but that is it.

Also, in countries that do a better job with pin+chip, you never have to even
round up. You only do this in Germany, because you mostly pay for things in
cash over there.

~~~
svara
When I pay by card in a restaurant in Germany I always leave one or two Euros
in coins on the table. You can also ask your server to include it in the bill
and put it on the card. It would seem quite rude to me not to leave an tip at
all.

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glofish
Tipping is something completely different. I have come to believe that in
America tipping is to recognize acceptable service. It is a feedback mechanism
to weed out, to mark and penalize undesirable behaviors. The best people to
make that determination are the customers themselves.

The only time you should not tip is when the service is bad.

Do understand that if we did not tip the prices would simply rise, we would
still pay the same as with tipping, but it would take away a mechanism by
which you can make ourselves heard.

~~~
ilkan
Imagine if every coder was paid below minimum wage and depended on tips in
every paycheck... it assumes a default that the employee needs a daily threat
of punishment from moody strangers to do acceptable work. Not a fun
environment.

~~~
glofish
it is not a good analogy, you can't immediately tell that a piece of code is
good or bad. If you could tell that in 10 minutes, if you could separate a
good coder from bad just like that, tipping would improve coding as well.

Tipping is not about moody strangers, the vast majority of people eating at
restaurants are normal people with normal, predictable and reasonably
benevolent behaviors. People will tip if the service is at least average.
Won't tip when the service or food is bad. What better way is there to tell
how your business is doing?

As many others in this thread pointed out, both waiters and customers like
tipping. The minority that hates it has various misconceptions about both how
it works, what it does to salaries etc read a few very salient replies in this
thread.

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poisonborz
There is no system for tipping that makes sense. It's a bad social construct,
just plain harmful from every angle. Let's abolish it.

~~~
gojomo
That's 3 assertions without evidence/reasoning, and then a stated preferred
course-of-action. Here's the same in the opposite direction:

"Lots of tipping systems make sense. It's a good social construct, and
beneficial from every angle. Let's expand it."

Both formulations are just longwinded ways to say "I dislike tipping" or "I
like tipping", without adding anything for people trying to form an opinion on
the merits.

~~~
michaelmrose
Here is a longer form of argument from another person.

Tipping shifts the burden of paying staff from the employer who already derive
most of the benefit from the staffs work to the patron who is pressured to pay
a large bill than presented to make up for how shoddy the employer pays.

For the most effective and the most attractive wait staff especially white
females in the most lucrative or the most inebriated environments they
actually may make more than they would if paid a flat rate by their employers.

For the majority they are probably paid less. It's like a tax collected from
black, ugly, or fat girls and given to 20 something females with nice boobs.

It replaces a negotiated predictable bargain struck after due consideration
between adults with the whims of the odious masses who get to decide if their
server gets paid based on whether she has sufficiently kissed their overly
broad asses.

In some states they allow the servers to be paid less than minimum wage so
long as they "tip out" which is to say they earned enough tips to ensure they
earned between both sources the federal or state minimum.

Requesting the employer to make up the difference between tips and minimum
even on a slow shift without enough business is a sure route to termination so
staff are strongly encouraged to help their employers break the law and
ultimately steal from them.

There are so many downsides and so few upsides and the upsides accrue nearly
entirely to employers and a fraction of servers its hard to imagine anyone
seriously arguing in favor of tipping.

~~~
phonypc
> _It 's like a tax collected from black, ugly, or fat girls and given to 20
> something females with nice boobs._

Also from the back-of-house staff, who are rarely tipped fairly and often not
at all, despite arguably having an equal or greater role in providing a good
experience at a restaurant.

~~~
glofish
but what if those people are already paid well? not that I know, but it is so
easy to be an armchair general, that has all kinds of opinions on how to run a
restaurant

~~~
phonypc
Speaking from experience, they're not. Back-of-house tends to get a slightly
higher wage, but end up making less than servers factoring in tips. Sometimes
_a lot_ less.

------
gojomo
Thompson quotes the Uber study showing that ride quality/service _does_ affect
tip rates (after other stronger factors) – but then claims the study shows the
opposite!

For tipping to be a useful feedback mechanism for the quality/service
dimension, quality/service doesn't have to be the strongest, or among the
strongest, factors determining the tip size. Just _a_ factor.

And given that all of the other factors mentioned (like demographics of
driver/rider, rider habits, location/duration of ride, etc) are fully
determined once a ride is matched, it appears that quality/service is the
single _influenceable_ contributor to tip size.

So, contra Thompson, it is absolutely the case that, once all the non-
controllable factors are fixed, the remaining differential in tip size is a
reward for excellent service.

~~~
ilkan
The meaning of non-controllable is "can't be fixed".

“The quality of the drive does seem to affect the tip,” List said. “It just
matters way less than all these [other] factors.”

------
galkk
I haven't used Lyft for a while due to the fact that it had tip request - I've
used Uber extensively, because it didn't asked for tips.

~~~
HenryBemis
Uber in Europe does ask for s tip, buy also gives the option to leave none.

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RickJWagner
I don't mind tipping, especially if I feel the server did a good job. (Not
even exceptional. Just 'good'.)

But I am a little concerned about 'tip inflation'. I am just now comfortable
going over 10% (with it's easy math), and it seems 15% and even 18% are fading
quickly into the past. I'm not wild about paying 20% or more as a tip, it
feels like I'm being gouged.

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throwawayuuuu5
I like tipping my barber. His skill and care makes a substantial difference on
the outcome. This feels like an appropriate place for tipping.

~~~
n4r9
If he's skilled and careful then why doesn't he charge in line with his value?

~~~
throwawayuuuu5
The barber dishes out haircuts with average utility of X, where the average
price for a X utils of haircutting is Y. I personally receive more than X
utils from this guy’s haircuts. As a courtesy to compensate the additional
value that I personally receive from him, which would not be fungible to a
randomly chosen barber of equal skill based on anecdata, I provide a tip.

~~~
n4r9
Hmm, I sort of get why you do it but it still seems weird that the amount of
tip should factor in the original cost. It's almost like you're insinuating
that people should pay what they estimate the value of something to be to
themselves, rather than what it's offered at. I don't go on ebay to buy
something and then send extra cash to the seller just because that thing was
extra valuable to me. Like most people I look for the best price I can find
and then decide if its low enough.

------
danieltillett
I have often wondered if the solution is to tip the manager/owner of the
business and let them distribute the tip (or not) as they see fit. Ultimately
tipping or not tipping will be built into the overall cost of the meal so why
not give the money directly to the person with the greatest ability to
optimise the dining experience.

------
BrandoElFollito
From what I read, this is stealing from the customer by everyone.

The owner is happy to pay less.

The waiter is happy to get tax free money.

Since nr_customers >> (nr_owners + nr_waiters) I have zero empathy towards
anybody in this wicked system.

But I still tip when in the US because peer pressure, and I am there only once
every few years.

------
glofish
Having traveled extensively in Europe I will say that I came to believe that
the American wait staff is more attentive, more courteous and more friendly by
large margins.

I am talking casual dining here, Applebee, TGI Friday, etc level of
restaurants where you get a decent sample size across many locations.

European restaurants just charge you an arm and leg for water - 300ml - that
will be 3 euros, refill ... pff, cough up another 3 euros! There is your "tip"
built into that overpriced water, right there.

Thus I find these types of articles quite unconvincing, where all personal
empirical evidence says different

~~~
Symbiote
You need to travel a bit more in Europe, then you can understand that many
Europeans find the overattentiveness and simpering friendliness of American
waiters shallow and insincere.

You will also find that whether tap water is free or not varies between (and
sometimes within) countries.

~~~
glofish
Really, your problem is over attentiveness? That someone comes over a few
times to ask you if you something?

What I found immensely insincere and fake is exactly the European style.

There is this pomp, where initially the waiter is expected almost humiliate
themselves, seems like the customer expects to be treated you like royalty,
but in fact the waiter is sick and tired of another "royalty" bossing them
around, getting nothing for good service, and will screw you over at their
first opportunity

In the US the waiter fakes that they are your friend

In Europe the waiter fakes that they are your servant

~~~
eesmith
Guidebooks point out that European restaurant culture is different than the US
one. (Speaking broadly, of course.)

I'll pull examples from [https://community.ricksteves.com/travel-forum/food-
drink/res...](https://community.ricksteves.com/travel-forum/food-
drink/restaurant-culture-europe-vs-united-states) .

The European view is that going to dinner is a leisurely affair, which can
take hours, and is part of socializing. ("A Norwegian friend explained that
many Norwegians have small homes and use restaurants for entertaining. It's
eat and talk, not eat and run.")

While to Europeans, the US culture seems more like one of turning tables to
get more customers through.

"I've had to explain to Americans that the service in Europe isn't bad when
the server isn't hovering over you. They think it's rude to rush you!"

"My husband and I love the European restaurant culture. When we’re back in the
USA after a trip, my husband gets annoyed with the habit of some restaurants
where three different people will stop by the table to ask if everything’s
fine, followed by the quick bill with a “no hurry”. But, everyone knows they
want people to leave for a couple more table turns."

So, what you see as "attentiveness", other see as pressure to get them out.

Culture's odd like that. I grew up in the US South saying ma'am and sir to
anyone over about the age of 10. Then I moved to California, and was chided
for using "ma'am" to someone. It wasn't that she had a problem with
politeness, it was the cultural context changed, so my polite wasn't her
polite.

------
planetzero
"By outsourcing compensation to consumers, companies can pay their employees
less"

They pay their employees less because otherwise, they won't be able to stay in
business without radically raising their prices.

I wonder if the same people that want to get rid of our tipping system would
be willing to pay double the price for breakfast?

~~~
skinnymuch
Why would breakfast be double the price? Wouldn’t that mean tipping on avg is
more than the meal price?

~~~
Spooky23
Because everyone in the restaurant industry systematically underestimates tip
income. It’s a pretty corrupt industry by modern standards. Waitstaff would
get paid way more _and_ the employer would actually have to pay taxes at
value.

Prices wouldn’t _double_ at most places, but some waiters at high volume or
expensive restaurants make a lot of money, and factoring those wages would be
tough on cash flow.

