Tipping Sucks

Hello Everyone,

First of all, I am alive and well. I have been away on vacation recently in the USA. I had naively hoped to return home to better economic news, but it turns out that the opposite is true. The price of oil has continued to climb, more American Banks have become insolvent and the repercussions are being felt worldwide.

Most people have found few things to be positive about, but I can think of one thing. The weak US dollar made my vacation far more affordable. I can’t say that I lived or travelled like a king, but I certainly ate like one. Even in the most touristy areas, such as Niagara Falls, I was able to get a satisfying meal for $10. In contrast, last weekend in Sydney, I paid that same amount for a mere tomato bruschetta in a cafe, located on Broadway.

Two things however did annoy me very much about the USA. These are the practices of quoting prices ex-tax and the need to pay an additional tip for table service at restaurants. Tax was usually around 10% and tips averaged to 15%, so the menu price would be inflated by 25% in most cases.

Here in Australia, these practices do not exist. You pay the advertised price and that is that.
I expressed my feelings of frustration to other travellers I ran into, who would often answer “When in Rome, do as the Romans”. I did, but I really didn’t like it. Here are my main reasons:

1. Tipping Encourages Misleading Advertising

To me, I am effectively dealing with a business that quotes a misleadingly cheap price to get my attention, who then ask for an additional fee to get fulfilment of the service. This stinks of corruption and is completely against the ideals of capitalism, which relies upon transparency.

It appears that the reason tipping took off in America was because it allowed an employer to hire staff at a ridiculously low wage, to avoid taxes.

2. Tipping Promotes Idleness Amongst Employees

When I go out, I want the same level of service from each waiter – someone who can understand and take an order, and then bring the food out promptly.

I found, more often than not, service was actually worse in the USA. Although most restaurants had multiple waiters, I usually had to wait for the specific waiter that was assigned to my table, in order to make it easy for them to distribute the tips. As a result, many waiters were standing around twiddling their thumbs, which is very inefficient.

3. No Objective Measure to Value the Quality of Service When Leaving a Tip

It is stated that tip is designed to pay and reward the waiter for their ‘good’ service. In practice, I paid close to 15% to everybody, as there is no objective yardstick to judge what ‘good’ service is.

A number of times, a waiter kept coming back to give long speeches offering me more dishes, or alternative variations. To them, they were providing good service. To me, they were hassling me to eat and purchase more than I had originally asked for, and this detracted from the experience.

I reckon that If the bean counters in the business can prove that a certain staff member is able to attract more business, this should be recognised with a raise following a salary review.

4. No Competition Between People Collecting Tips

When I go to a restaurant, would it be acceptable for me to ask for the waiter who will charge the lowest tip? Surely, this should be allowed in a capitalist system.

Also, let’s say I don’t like the waiters in a restaurant. Would I be allowed to bring my own personal waiter who will then be responsible for taking the food from the kitchen and cleaning up after me, and I will pay him myself? I don’t think so.

5. Tipping Promotes Discrimination Against Less Wealthy Customers

Apparently, tips were originally 10% and they have crept higher over the years, and are now between 15% and 20%. One explanation is that wealthier people have been paying progressively higher tips to obtain better service than others, and this would result in lesser well-off groups of people receiving inferior service. Is this acceptable?

References on Tipping

I found this excellent paper written by an economist who discusses the history of tipping in America and beautifully outlines the case against tipping in great detail:

http://taxprof.typepad.com/taxprof_blog/files/the_case_against_tipping.pdf

What do you think?

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