After 5 Months of Gratuity-Free, Nishi Changes Tact

20160227-Momofuku_Nishi_interior_2.0.jpgWhen David Chang opened Momofuku Nishi in Chelsea 5 months ago, the chef generated the usual buzz for a new Momofuku concept. But Nishi was also earning press as the latest addition to the gratuity-free movement, so far spearheaded by other big names like Meyer and Tarlow. Chang even gave an interview in his magazine Lucky Peach on the decision, citing their desire to pay kitchen workers a living wage.

This week, Nishi will be changing course and adding a tip line to the bottom of all checks. Prices will also lower somewhat, but wages for kitchen should stay the same. The team explained the decision in a Tumblr post, saying “This is by no means the end of the no-tipping discussion at Momofuku. But at this moment, we think a tipping model will benefit our guests and staff.”

Nishi also added brunch this week, which included a number of smaller, more affordable portions of items on the dinner menu. Hopefully the changes will satisfy early critics, who had praise for some dishes but considered them too pricey.

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Joe’s Crab Shack Defects from Gratuity-Free

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Several months after going the no-tipping route, Joe’s Crab Shack has now rolled back the model from 18 restaurants to just 4. CEO Bob Merritt tells investors that customers simply don’t like it, and foot count is down 8 to 10% on average among the locations.

The chain was originally praised for their efforts, which followed on the heels of higher-end restaurateurs like Danny Meyer, Gabriel Stulman and Andrew Tarlow. Overall they raised server wages to $14 an hour and menu prices by 12 to 15%. “We tried it for quite a while, tried communicating it different ways,” Merritt explained, but a large portion of guests were unswayed. Research indicates that about 60% of guests disliked the model, either because they didn’t trust management to pay the higher wages or they preferred being able to incentivize good service.

Joe’s will revert 14 locations back to their former tipped model, but the remaining 4 have apparently been working much better. Merritt says they plan to treat those stores as a rich source of research, and figure out what distinguishes them from locations where it doesn’t work.

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New York Approves $15 Minimum Wage

New York Governor Andrew Cuomo followed closely on the heels of California yesterday, announcing an agreement with Albany lawmakers to raise the NY State minimum wage to $15 per hour over the next few years. The increase will begin with for workers in New York City employed by large businesses (those with at least 11 employees), who will have a minimum wage of $11 at the end of 2016, and an additional $2 each year after, reaching $15 on 12/31/2018.

The national labor rights movement has been fighting for $15 since 2012, and roughly half of the 50 states have increased their minimums somewhat (although the Federal minimum is still set at $7.25 due to congressional opposition). The final legislation in NY has not been approved, so it’s unclear how it will affect tipped workers. The tipped minimum in New York increased recently to $7.50, precipitating some of the gratuity-free movement. Additional increases would almost certainly prompt more NYC restaurants to raise prices and eliminate tipping altogether.

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Roman’s Runs Into Trouble Going Gratuity-Free

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After Danny Meyer, Andrew Tarlow is arguably the biggest name behind the no-tipping groundswell, and one of the first to vow that all his establishments would eventually go gratuity-free. But unlike Meyer, who recently announced that the change had gone unexpectedly well and generated more business than ever at his two Michelin starred The Modern, Tarlow is running into a little more trouble.

At Roman’s, the Fort Green Trattoria where Tarlow eliminated tipping in mid January, the change has reportedly been contentious. Although wages for both front of house and back of house employees have risen to $15 to $17 an hour, that wage still represents a significant decrease from what a server would earn on a typical Friday or Saturday night. As Roman’s bartender Anna Dunn puts it, “Some people want to pursue their art for 40 hours a week and then work 28 hours a week in a restaurant to pay the bills. Those people are really vital to a room. What are they going to do to make the most amount of money in the least amount of hours?”

Friction was likely aggravated by the way the change was announced; servers found out they would be losing tip income on December 15th – the same day the public was told. At least 2 veteran servers quit shortly after. Still, these hiccups are along the lines of what Tarlow – as well as Meyer – expected, and ultimately they still believe that the friction will be worth the change.

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Eliminating Tipping Goes Even Better than Expected for Danny Meyer

94678Interiors_4349.jpgNearly 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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Andrew Tarlow Takes the Lead Against Tipping with a Sticker For Your Window

03-gratuity-free-logo.w901.h901.jpgDanny Meyer may have been the first to really make headlines by eliminating tipping, but Andrew Tarlow has now gone a step further by taking on the anti-tipping movement’s PR as well. Marlow recently pitched a standard sign which he believes all gratuity free restaurants should display in their windows in order to help retrain guests who have spent their whole lives living in a world of tips.

The logo is custom designed by Drew Heffron, a graphic designer Tarlow has used before for the menus at some of his restaurants. The move is clearly well thought out, and even the wording – “Gratuity Free Establishment” rather than “No Tipping Allowed” is design to make guests more comfortable with the change. First restaurants went Smoke Free, now they’re going Gratuity Free.

The logo is already on display at Tarlow’s Roman’s, and will be added to Diner and Marlow & Sons soon. It is also available open source from http://www.gratuityfree.nyc.

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Slow Food NYC’s Food Almanac 2016

Slow Food NYC (SFNYC) will be hosting their 6th annual “Food Almanac” on February 9th at the Brooklyn Winery. The event is inspired by the original Farmer’s Almanac, which was used by farmers to predict the weather and plan plantings for the year to come. SFNYC’s version allows industry experts and food activists to discuss what’s in store for our local food system. This year’s theme focuses on food wages: the Fight for $15, the no-tipping movement, and what they mean for both restaurant workers and farmers.

The Food Almanac will also feature treats and eats from Brooklyn Winery, including beer, wine, and seasonal snacks. Proceeds benefit SFNYC’s Urban Harvest program, a nonprofit food educational program for children in NYC public schools.

To learn more and register, click here.