The Tipless Restaurant

I promise this will be the last time I mention tipping today. I think this story is interesting and worth sharing.

Here is the start of a multi-part series published this week from Jay Porter, the founder of a restaurant in San Diego called The Linkery, which describes itself as a “tipless restaurant.”

The story of how The Linkery became a tipless restaurant was covered in the Times in 2008, but it essentially goes like this: Porter noticed that the staff at his restaurant “was squabbling, mainly over money: waiters were angling for better shifts and tables, and the kitchen workers didn’t feel they were getting a fair share of the profits.” On that last point, there are laws in California and other states that “prohibit redirecting tips to restaurant workers who traditionally don’t receive them — owners, managers and members of the kitchen staff.”

Porter wanted to get rid of tipping, but he didn’t want to penalize diners who ordered takeout and didn’t receive service, so he “proposed a service fee of 18 percent, to be pooled and split roughly 3 to 1 between the restaurant’s front of the house and its kitchen.” This kind of service fee is pretty standard at a lot of restaurants, but Porter took the extra step of forbidding diners to tip on top of that (to prevent the squabbling, and bypass the law that says tips can’t be redirected to the kitchen staff). This caused some people to complain, but as Porter sees it, his restaurant did quite well:

Meanwhile, our revenue was always higher at the tipless restaurant, I think because quality of food and service were both better due to the more consistent pay system (which at the Linkery was much closer to that of a normal, non-hospitality business than that of most restaurants, where server pay varies with a lot of randomness). With higher revenue and more consistent pay system, our retention was better. This continued to be a “virtuous circle” of benefits we saw from having a tipless/service charge model. On a personal level, it was much more fun to work with the non-tipped team; in that environment it was easier to build a focus on doing great, worthwhile work, and doing it well, when those thoughts weren’t being interrupted every couple minutes by a guest deciding how much to pay a team member for their last few minutes of services rendered.

Porter has many more observations to share in the series, and they are all very interesting.

Photo: Travis Grathwell