Industry Shake Up?: Shake Shack Owner Danny Meyer To Nix Tips In 13 New York Eateries

Imagine a world where leaving a tip at your favorite restaurant is no longer the social norm, if not exiled completely. Danny Meyer is making waves in the New York restaurant industry by outlawing tips at his premier New York City restaurants.

Meyer, a restaurant powerhouse responsible for establishing Shake Shack and 13 other New York eateries, will be implementing a new system he is calling, “hospitality included.” The strategy will remove any need to tip by increasing food prices to reflect the average tip of 21 percent.

“When you get your bill, it should look just about exactly as it would have if you had left your gratuity in the old days.” Meyer explained to NPR.

While the front of house receives the tips, chefs, sous chefs, dishwashers and line cooks are excluded from the margins. This new service will disperse the revenue equally throughout the entire restaurant operation.

Saru Jayaraman, co-director and co-founder of Restaurant Opportunities Centers United “applauds restaurant employers to explore wage structures that aim to pay employees a fair, stable base wage, helping to mitigate the problematic system that is inherent in the tipping model.”

With everyone getting a piece of the pie, Meyer hopes that the change will produce a healthy working environment and a leveled playing field for employees.

The Modern will be the first restaurant to test Meyer’s new theory this coming November. The eatery nestled in The Museum of Modern Art serves a refined menu of Foie Gras Roasted with Lemons, and Green Zucchini Gnocchi, but for an additional $25 expect a generous showering of Burgundy Truffles.

We wonder how these changes will affect fine dining establishments, where consumers are expecting higher prices. Will these same tactics work in small-scale eateries, and diners across the United States?

“We hope others in the restaurant industry will follow suit,” Jayaraman said.

In the coming months, only time will tell how the “hospitality included” will pan out. But one thing is for sure, Meyer is taking the first big stride toward wage equality in the restaurant industry.