No-Tipping Pioneer Danny Meyer Abandons Policy Due to Coronavirus Crisis

Danny Meyer — the restaurateur who was one of the pioneers of the no-tipping model at restaurants in NYC — is now abandoning that practice at his roster of restaurants at Union Square Hospitality Group, that are reopening for outdoor dining, the New York Times reports.

The practice will start off this Thursday at Meyer’s first restaurant, Union Square Cafe, and will be adopted at other Union Square Hospitality Group establishments in the coming weeks including Gramercy Tavern. USHG restaurants that are already open for takeout and delivery, including all-day cafe Daily Provisions, will make the change immediately.

In a letter published on LinkedIn earlier today, Meyer notes that the decision was largely prompted by the growing uncertainty on when things might go back to normal for restaurants. With indoor dining postponed indefinitely, and with most restaurants earning less than half the revenue they did in pre-pandemic times, Meyer felt it was imperative to reinstate tips.

“It’s against that precarious and unpredictable backdrop that we are concluding the chapter on Hospitality Included, and reopening with tips, all the while advocating for policy changes that will introduce much-needed equity into the compensation system,” Meyer writes in his letter.

Part of that change is introducing a new revenue-sharing system for all staffers at USHG restaurants. While tips will still go to front-of-house staffers, Meyer has pledged to share restaurant revenue with kitchen staff noting that those staffers will get a 25 percent pay increase on average. Meanwhile, Meyer says he’s going to try to persuade federal lawmakers to change the existing rules to allow for tips to be shared equally among kitchen and dining room staffers in New York.

Meyer’s reversal comes amid growing calls to eliminate tipping with data increasingly showing that the practice encourages racism, sexism, harassment, and exploitation. With restaurant revenues down across the board, though, Meyer says this one way to get more money to his staffers, some of whom are now returning to work after being laid off four months ago.

Meyer closed all of his restaurants shortly before the state-mandated shutdown orders on dining in went into place in March. USHG laid off 2,000 workers — or about 80 percent of its workforce — shortly thereafter, due to the coronavirus related measures. With some workers now coming back, the reversal will likely come as a boost to USHG staffers. In 2018 — five years after he introduced the no-tipping policy at his restaurants — Meyer admitted that he had lost 30 to 40 percent of front-of-house staffers due to the change.

Meanwhile, many other restaurateurs who had initially followed Meyer’s lead on the no-tipping policy — including Andrew Tarlow, Gabe Stulman, and Claus Meyer — all reversed course long before Meyer’s announcement today.

In January this year, Gov. Andrew Cuomo announced that he would eliminate the tipped minimum wage, but in a surprising move, hospitality industry workers were excluded from that change. And while Meyer may now be reverting back to the tipping model due to the coronavirus crisis, Crown Heights all-day cafe Hunky Dory has been one of the first in the city to switch to a no-tipping policy in light of the pandemic.

• Danny Meyer’s Restaurants Will End Their No-Tipping Policy [NYT]