Danny Meyer: Tipping system has lost any value it had

Union Square Hospitality Group CEO Danny Meyer on his decision to eliminate tipping at all his restaurants and the state of the restaurant business.

NYC Restaurateur Bans Tips to Raise Workers’ Salaries

By Industries FOXBusiness

In an effort to take on low wages, restaurateur and Union Square Hospitality Group CEO Danny Meyer is eliminating tips.

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“The tipping system, as it is, has completely lost any value that it may have ever had,” he said during an interview with FOX Business Network’s Maria Bartiromo.

Meyers explained how the government has banned restaurants from sharing tips with people who cook food and has created a disparity between the kitchen and dining room.

“Kitchen wages have gone up 22% on an hourly basis in 30 years, whereas being in the dining room has gone up well over 250%,” he said.

Meyer says there’s no incentive to attend culinary school if wages are low.

“It’s going to help us to reverse what’s been a horrible drought in labor in the kitchen,” he said.

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Although menu prices go up, Meyer argued the total will be the same as if you left a tip.

“By putting the full price into the menu, being transparent about it, it allows us to do two things… We get to determine what everybody’s income is on a merit basis… We are also going to institute revenue sharing for our servers so that just like today, when the restaurants’ revenues go up, they’re going to have the incentive to sell and to make more money.”

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