The system of service charges is crass, inefficient and demeaning. Let’s end it
I am a control freak and as such completely unsuited to my job as a restaurant critic. Every time I visit a restaurant I am, in effect, ceding control of my night out to complete strangers: the waiters who will be looking after me. This makes me antsy. Usually, I know nothing about them. I have no guarantee they will show me a good time. Ah, but it’s OK because they have an incentive to do so: the discretionary tip I may leave at the end of the meal.
As if that really makes a difference. It’s time, I think, to acknowledge that the notion of tipping is a crass, outmoded, dysfunctional and ultimately inefficient system, ill-suited to a service-industry age. We’ve all read stories over the years about high-street chains charging fees to administer tips or using them to top up wages. Clearly, it’s now so muddled and tainted as to have outlived its usefulness. The restaurant business needs to follow the lead of a few enlightened souls and scrap the concept of tips and service charges altogether.
Can I really have control over my meal via a discretionary service charge? No. It may often be called “discretionary” but it’s a brave soul who refuses to pay it. But it goes further. Whether I pay or not, I have no way of knowing whether the staff receive the money, unless I interrogate them on the matter, which is hardly my idea of a great end to a night out. I could always leave cash, I suppose, but in the age of plastic who can guarantee to have that on them every time? And again, who knows where it goes even if you do so?
But there’s a bigger issue. Either we regard waiters as literally servile, to be rewarded at our whim. Or we think they have the right to the dignity of a wage that’s both reliable and reasonable. Do I need tell you I think the latter is the only way forward?
The naysayers argue that without tips we have no way of showing our approval or disapproval. Not true. We could show our disapproval exactly as we do now: by never visiting the restaurant again. And as to showing approval, there are various ways, including saying an effusive thank you, which is something people who are already being paid properly always appreciate. And yes, you could always leave more cash on the table, though as they will be being paid a decent wage there’s less reason to do so. The one real argument involves the knotty issue of VAT, which is not applied to tips that are freely given. But surely it’s not beyond the wit of the industry to sit down with the tax authorities in both Whitehall and Brussels to argue the case for a lower VAT rate for the hospitality industry – say 17.5% – to deal with the matter?
Alternatively, restaurateurs can simply take the hit, as both Danny Meyer of the Union Square Group in the US and the Gallivant Hotel near Rye have already done, arguing that it’s better for business in the long term if quality employees are incentivised by secure incomes. In turn, diners will see menu prices rise, but they’ll know that the price they see is the price they pay, and that the people serving them are properly looked after. This Sunday’s edition of OFM is all about service, because we think it’s important. And if it’s important it should be rewarded. That means getting rid of tips.
Observer Food Monthly is out on Sunday 17 April
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