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Tipping has gotten out of control for many Americans. Even drive-thru coffee involves awkwardness and moral uncertainty as customers paying by credit card must decide—often as an employee looks on—how much to tip, if anything. Many have taken to social media to complain about “guilt-tipping.”
But there’s no need for the guilt trip, says Shake Shack founder Danny Meyer. “If you’re just taking out food, and it was just a transaction—I give you money, you give me a cup of coffee—I don’t think there’s any obligation to tip whatsoever,” Meyer said today on CNBC’s Squawk Box.
That might help some consumers feel a bit more justified when choosing not to tip for takeout, but it won’t likely remove the discomfort. And for those who do tip, there’s still the question of how much is the right amount.
At Starbucks, drive-thru customers, as well as those in the cafe, are presented via touchscreen with the option of $1, $2, “other amount” or “no tip” when paying by credit card. The coffee giant rolled out the tipping system late last year, and many other companies have similar systems in place, using point-of-sale terminals from the likes of Square and Toast.
In some cases, these systems are being deployed where, in the past, no tipping was expected. In March, New York Times columnist Brian X. Chen wrote about a motorcycle mechanic presenting him with tipping options on a smartphone screen, noting, “I felt pressured to tip because my safety depended on his services.”
South Park creators Matt Stone and Trey Parker have taken a different approach to the tipping issue at Casa Bonita, a Mexican restaurant in Colorado they recently bought and renovated to the tune of $40 million. The duo eliminated tipping, deciding instead to pay staff $30 an hour. The minimum wage in Colorado is $13.65.
Last weekend, West Hollywood—between Beverly Hills and Los Angeles—became the city with the highest minimum wage in the U.S., at $19.08 an hour. The federal minimum wage is $7.25 per hour.
Meyer, who is also founder and executive chairman at Union Square Hospitality Group—an operator of New York restaurants—has a history with tipping.
He eliminated tipping at the group’s restaurants in 2015, only to allow it again five years later amid uncertainty about the pandemic. In a LinkedIn post, he wrote, “We’ve come to believe that it’s the inability to share tips that is the problem, not the tips themselves. Our ultimate goal is for your tips to be shared among our entire team, so both kitchen and dining room teams can benefit when a guest has a great experience.” In 2017, Meyer said on The Sporkful podcast, “Tipping is actually one of the biggest hoaxes ever pulled on an entire culture.”
