The Tipping Point: 3 Reasons Why Leaving a Tip Has Got to Go

When you read the title of this post, you might think: Wow, this guy is against tipping, what a cheapskate. You are right, I am against tipping, but I am not cheap; I am frugal. (There is a difference between the two; it has to do with conscientious spending, but that is a discussion for another time.) As for my frugality, or “cheapness” if you will, it has nothing to do with whether or not I tip, because I do. Furthermore, because of societal pressure here in the US, I feel the need to tip very generously, whether or not the service was deserving of such gratuity. I always tip a minimum of twenty percent in every tipping situation, whether it is an inattentive waitress at a restaurant, a reckless Uber driver bringing me home, or an unwashed delivery guy who is over thirty minutes late with my food. Who am I to judge whether or not they deserve to make a living? Almost every time I tip, though, I feel like I am being bullied out of my money. The bully is not the waiter, waitress, or delivery driver however. The bully is the proprietor(s) of the restaurants, bars, or ride sharing services. It is they who are shaking me down for my hard earned money. They are simply using their low-paid employee as the sad face of pressure, forcing us to tip them, more out of a sense of obligation than out of sense of appreciation. Why do we allow restaurant workers (or others who work for tips) to make minimum wage (or less), and expect the loyal customer to be the ones to supplement their income? It is about time we put this whole tipping thing in perspective once and for all. The following are the top three reasons why tipping needs to stop being the norm in our society, and instead become what it was always meant to be: an extraordinary sign of generosity and appreciation that only comes up on the rarest of occasions.

1. The Owner’s Money

The first reason that the whole tipping thing needs to go has already been partially addressed: the owner’s money. Why do we allow the ones making all of the profits of the business, to put the burden of paying their hard working employees a livable wage, on us, their loyal customers? This calls to mind Bernie Sanders’s point, when he was fighting for a $15 minimum wage at Amazon, saying that Amazon was paying their employees so little, that thousands of workers, desperate to survive, needed to supplement their measly income with tax payer money in the form of food stamps and welfare. At the time of Senator Sanders’s minimum wage fight with Amazon, 33 percent of all Amazon workers in Arizona were receiving government assistance. Sanders’ point was that the owner of the company should be the one paying the company’s workers a livable wage, not the American public. My point on tipping is exactly the same. Why do the owners of these restaurants or ride sharing services expect the public to be the ones to pay their workers — the ones who make their businesses profitable in the first place — the steady income that they need and deserve. Talk about socialism. The irony/hypocrisy of these “capitalists” is laughable.

The current minimum wage of tip workers in the U.S. is well below the minimum wage for non-tipped workers, and although there are states like Alaska that do not allow a lower wage for tipped workers, or states like Massachusetts that legally require the employer to make sure that their employees make at least $12 an hour after tips, the drastic variation of wages for tip workers state-to-state and week-to-week is both inconsistent and inefficient, and should be done away with immediately. The ratio between the average CEO’s pay and the average worker’s pay is 221:1. And for many tip workers, this number is even larger. The fact that anyone, but the ones profiting from the business would be the ones responsible for paying the full wage of the company’s employees is completely ludicrous.

Restaurant owners usually have the same two responses to this point. The first argument is that they are providing an opportunity to a waiter or waitress to take advantage of the business that they as the proprietor have drummed up. That is to say, they are giving them access to the good location that they are paying for. To this argument, it needs to be said: a good location depends on a nice atmosphere. And by atmosphere, I mean more than just the address and building. The energy of happy, well paid employees is palpable and ostensibly effects the environment in which the customer partakes. Miserable, low-paid, apathetic workers drive away business, even in the nicest of settings. Moreover, without well-contented, well-serviced customers, which is something that only comes from the hard work of happy workers, a business will inevitably fail. In other words, a location is only as good as the energy inside of it; it is what gives a place its life and vibrancy, and by extension its financial success.

The second argument of restaurant owners against paying their employees a livable wage, is that if they have to pay their employees more, then the price of their items will have to go way up. They say this as some kind of a veiled threat against the consumer of their product/service. To this point, I have a few things to say, most of which will be addressed in third part of this post. All I will say here about the price of items going up is, most restaurants already mark up the cost of alcohol over 200 percent on average, and now they have the audacity to say that they are going to raise the price even more if they have to pay their workers a reasonable income? Good luck with that. If you cannot find a way to offer reasonably priced items/services and pay your workers a steady, reasonable wage, then perhaps you are not cut out to run a business, and the free market system, which you claim to love because it has given you an environment in which to succeed, should extinguish you like the “want-trepreneur” that you are.

2. Service

A very informative article was recently posted in The Atlantic entitled, “The American System of Tipping Makes No Sense.” Derek Thompson’s article highlights the misconceptions of tipping in regard to providing the customer with better service. Thompson uses the recent findings of a field study on tipping, involving 40 million Uber rides, as evidence of his point. In the field study, the incongruity between service and tips is laid bare. According to the National Bureau of Economic Research, “Overall, the demand-side explains much more of the observed tipping variation than the supply-side.” What this means is the likelihood of a tip, and the amount of the tip, are more often a reflection on the tipper than on the worker and the quality of the service that he or she provided. In other words, the long believed notion that basing an employee’s income on tips is best for the consumer, because it will ensure better service, is completely misguided. John List, the former chief economist at Uber, acknowledges the huge gap between service and tips, saying, “The quality of the drive does not seem to affect the tip. It just matters way less than all these [other] factors.” The “other factors,” are mostly about the customer. As Thompson notes, “In all ‘rider-side effects’ — the gender of the riders, where they are picked up, how long the trip was, and whether they were routine tippers — explain three times more of the tipping variance than the qualities of the drivers or the drive itself.”

What is it about our society that makes us think that we have to threaten the pay of workers in order to derive from them a job well done? What about all the other jobs in America that do not receive tips, are they all just terrible employees, who do not do a good job, because they are not trying to constantly impress the customer? No, of course not. That is ridiculous. Most people want to do a good job at whatever they are doing, and furthermore if the threat of not getting paid is the incentive for good work, why can’t the threat just come directly from the business owner(s), in the form of maintaining employment or not, and not from the customer, in the form of making end’s meet or not? Moreover, the customer already has ways to hold the worker accountable for good service through Yelp, Google reviews, and a plethora of social media platforms. Although, I do not really think people need to complain as much as they do. It’s bad enough that customers get all this power over a person just trying to do his or her job, they should not be able to determine whether or not that worker can pay his or her bills or not. That is absurd on the face of it. As you can see, I am not against tipping because I am against service workers, I am against tipping because I think they deserve a fair and consistent wage from their employer.

Well, it would not be completely honest to say that my opinions as a customer, having to dole out extra money every time I eat at a restaurant or take an Uber home, have nothing to do with my feelings on the matter…

3. Customer Experience

The customer experience should be of the utmost importance to everyone: the owner, the worker, and especially to the customer themselves. Forcing the customer to have to pay more than what is advertised is unfair and seemingly underhanded. And as was already addressed in this post, even if an owner of a restaurant has to raise the price on items or services in exchange for paying their worker a more steady income, then I say that is still better than the current situation. Paying a higher price for something in a more transparent way gives the customer a better experience than tacking on an extra amount to the bill after all is said and done. I do not know what it is about human psychology that explains this, but when I order something online I will pay more for an item if it says “free shipping.” There is just something about adding an extra fee to an item or service that really repels the customer. And that is exactly what a tip is; it’s an extra fee that the restaurants, bars, or ride sharing services put on those of us who always tip. It must stop.

There are so many flaws in the current tipping system, not least of which is the customer’s understanding of his or her role in the process. Not all customers are the same; some tip well, some tip small, while others do not even tip at all. In fact, 60 percent of Uber riders never tip. How is the worker supposed to make a living, if they are relying on an unwritten understanding from the tipping public? Some Uber drivers have gone a step further to ensure that the tipping public understands their role. That is, these bold drivers have gone so far as to put baskets in their cars, explicitly asking for tips for their service. If this doesn’t ruin the customer experience, then I do not know what does. It is no wonder that the founder of Uber, Travis Kalanick, was against the tipping feature on the app (a feature that was added shortly after his departure from the company in 2017).

Why do we allow business to be conducted this way? It is time forced tipping became a thing of the past. To make this happen, however, everyone needs to do their part: the one who makes the profits of the business must pay their employees a fair and complete wage; in return, the worker must do his or her job well in order to make the customer happy; and moreover, the customer must stop feeling pressured to pay more than the cost of the item or service that he or she purchased.

The problem is, however, tipping has somehow become this unspoken barometer of decency. Occasionally you will see a story, of someone who left an incredibly generous tip, where they are praised for their equanimity. On the other hand, you might see a story of someone who not only did not leave a fair tip, but felt that the receipt was some kind of soap box on which to spew all of their judgmental venom. To this I say: I understand that you do not want to tip, but you do not have to immortalize your hatred in black and white next to your signature and a dollar amount. It has a weird selling your soul to the devil vibe to it. Just don’t tip, that’s fine.

Moving on, you might agree with me that a person should not have to tip, but not that the owner should have to be the one who pays the worker the difference. You may have a “that’s what they signed up for” point of view about the worker, with the opinion that “if they don’t like their job and don’t make enough money, then they should go work somewhere else.” To this I would argue, it’s not always that easy. When entire industries, industries with so many entry level jobs, manipulate the entire pay structure of millions, you cannot be so flippant with your response to their struggle. If you treated every entry level job like this, then upward mobility in America would become a thing of the past. It has already been said in this post that the current ratio of pay between a CEO and the typical employee is 221 to 1. To those who would make the aforementioned “that’s what they signed up for” argument, it must be asked: How is it that you can understand that making the owner pay their employee more is unfair, but not that paying poverty level wages to hard working people is?

No matter where you stand on the tipping debate, I can almost guarantee that you have a strong opinion about it one way or another. It is fair to say that this issue is not going away anytime soon. If anything it will just keep getting more complex. I did not even get into the fact that some restaurants automatically include the tip in the bill. What if someone doesn’t want to tip?Or how some restaurants will add a delivery charge to the order, which makes me wonder: does that count as the tip for the driver? Or how some restaurants make their waitstaff share their tips with the busboys and bar backs. All of these just seem like complex, convoluted ways to make sure that one way or another the one who profits most from the business can keep all of the money for themselves.

Let me give you all one final tip: once you understand the irony of my point you will no longer see me as a cheapskate, but as a champion of workers: I am against tipping because I think that service workers deserve so much more than I can give.

There’s my two cents.