Eliminating Tipping Goes Even Better than Expected for Danny Meyer

Nearly four months after eliminating tipping at the Modern, trendsetter Danny Meyer says  that the first full month without tips was the restaurant’s most profitable ever. On a recent podcast of Freakonomics, Meyer declared his surprise that the two-Michelin starred restaurant had benefited so quickly. He expected that, while they would ultimately see the benefits through lower turnover and more equitable pay, the process would be slow  and have initial hurdles. Instead, back of house applications have increased nearly 270%, server application shave increased 25 to 215% over three months, and there are more guests walking through the door than ever.

Of course, the Modern stands to benefit from a lot more publicity than the average restaurant considering this change. As one of the first New York restaurants to go gratuity-free, not to mention one with an established name for itself, the publicity alone is enough to make up for any sticker shock at higher menu prices. Still, the news is another piece to add to the puzzle when deciding: to tip, or not to tip?

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