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Restaurant trend of ‘service-inclusive’ billing may be reaching a tipping point

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Sonoma restauranteurs have shown their smarts in waiting to see what happens to big city restaurants that recently did away with tipping and switched to a policy of adding on tips or a surcharge straight to customers’ bills.

Restaurant customs and finances are complex issues. Some owners no doubt saw opportunities to pocket some of the tip revenue, while others try hard to provide health insurance and pay all workers a living wage. Incidentally, hourly wages in restaurants are low, and servers often depend on tips to make ends meet.

Some of those servers can make far more per hour in tips, and a few of them somehow forget to report all of that extra cash. Many restaurant owners, including Ari Weisswasser of Glen Ellen Star and Bob Rice of Breakaway Café, recognize the discrepancies between what “front of house” staff take home, which is much more income than “back of house” or kitchen staff, who make the food as good as it is.

Some restaurant owners think they should decide how to reward servers, while that could depend on how the employee butters up the employer, rather than how they perform their job. Some customers feel that servers dote over customers known to be big tippers while ignoring others, especially women.

A few San Francisco restaurateurs discovered they had to pay taxes on the added income that resulted from a fixed surcharge tacked onto bills, and the new system began to unravel.

According to the San Francisco Chronicle, San Francisco restaurants that have given up the no-tipping policy include Trou Normand, Bar Agricole, Aster, Dopo, Oro, Lord Stanley and Sous Beurre Kitchen.

Bay Area restaurants that still have service-inclusive policies include Camino, French Laundry, Petit Crenn, Zazie. Bay Area restaurants that include fixed-percentage service charges (17 to 20 percent) are Chez Panisse, Lazy Bear, Chez Panisse Café, Coi, Sessions, Californios and Toast. Jennifer Piallat of Zazie likes her alternative all-inclusive pricing and plans to stick with it.

Tipping has been traced historically to 17th century England when “tip” supposedly stood for “to insure promptitude,” and applied to restaurants, bars, taxis, hair stylists, hotel staff and others.

Weisswasser summed it up by saying that, in most restaurants, the people cooking your food often earn less than the people who serve it – an idea he says is “troublesome.

“In cities like New York and San Francisco, where the cost of living is high, there is an unprecedented shortage in talented cooks,” says Weisswasser. “They simply can’t afford to live there on current average wages. Unfortunately, restaurant margins can’t support the burden of mandatory increased salaries and wages. Policies like ‘hospitality included have great intentions, like distributing pay more equally. However, it puts the financial responsibility on the guests. Not every restaurant has a large enough regular clientele willing to bear that burden.”

For now, he adds, most of the restaurant industry will sit back and observe the effects of “hospitality included.”

“Whether this is the answer or not, change is coming in 2016.”

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