IT WAS BIG FOOD NEWS LAST week—New York restaurateur Danny Meyer announced he was eliminating tipping at his more upscale restaurants. The reaction from the New York-based food press was a vast collective OMG, a hive-mind cry of this changes everything.
Well… maybe, and maybe not. Outside of Shake Shack, Meyer only has 13 restaurants, considerably fewer than, say, Lettuce Entertain You in Chicago or Cameron Mitchell in Columbus, Ohio, and his restaurants are, if not for the 1%, at least for the 3 or 4% in one expensive city. The way he’s doing it—simply jacking up all his prices to make up the difference—is arguably less likely to work outside that rarefied dining (and spending) world than some of the other experimentation going on, where post-dinner bills are replaced with pre-dinner ticket sales including a service charge, and the chefs themselves are often the servers, too, as the whole nature of fine dining and service evolves.
But that’s mostly the high end, too. In the news last week, it turned out that just a week before Meyer sprung no-tipping on New York, a Chicago restaurant had done the same, to zero fanfare—The Radler, the Logan Square German restaurant and beer hall run by chef Nathan Sears and general manager Adam Hebert. This was curious and potentially much more momentous, because The Radler is neither at the low end of self-service restaurants nor the high end of tasting menu restaurants—and certainly not at the cutting edge of reinventing the restaurant business. What attracted a mid-priced, relaxed place like The Radler to overthrow the system and think they could survive and actually be better off? Wasn’t it sure to drive their best servers off in search of greener dining rooms?
Sears and Hebert are interesting as partners because they’ve both been on both sides—Sears was a server before he chose to go into the kitchen, Hebert had trained for management in New York with Myriad Restaurant Group (Tribeca Grill, etc.) but he met Sears when both were cooking on the line at Paul Virant’s Vie in suburban Western Springs. My first questions aimed at finding if the no-tipping change was aimed at reducing the inequity between servers (who can make a lot of money in the right restaurant) and cooks (who tend to make around $10 an hour no matter where they are). But both jumped to say it wasn’t really about money, or disparities in wages, at all—it came out of a bigger conception of how their restaurant would have to change to adapt to the changing environment for Chicago restaurants in general:
Adam Hebert: I was living in New York, so even if I made more money, I was still broke. So I always figured, I might as well work more hours anyway.
Nathan Sears: At least you’d get a meal out of it.
I spent eight years in front of house. There’s the debate, but it’s like any job. It’s like being mad at someone else who took a job that you could have easily had, and getting mad that they have more money because you didn’t go for it. I think I took a 50% pay cut when I left serving to go to the kitchen, and I knew it. But I knew where I wanted to be, and I knew the longevity, and I knew the promise ultimately as a chef would be better than being a waiter my whole life, so that’s a leap I took. But it’s like getting mad at a doctor for the money they make when you refused to go to school.
Chef Nathan Sears and manager Adam Hebert
Michael Gebert: If it wasn’t so much a money issue for either of you, why did you make this move?
Hebert: We want things to be better for everybody—better for our guests, better for our employees—and as a server here, in this neighborhood in particular, you never can tell [how you’ll do]. It’s not like Michigan Avenue where there’s people all day, every day. Here, it varies all over the board—
Sears: It’s a neighborhood—
Hebert: It’s a neighborhood. There could be a game on, and people aren’t familiar with the fact that we have TVs here because we didn’t have them for the first sixteen months we were open. So Cubs game, all of a sudden that Friday’s dead. But then there could be a Tuesday in the middle of that week that for some reason, everybody decided to go eat at the Radler. It’s all over the board for us, so there are huge inconsistencies in pay here for everybody who works on a week to week basis. The consistent ones are the cooks in the kitchen, but they’re barely making enough to survive in the city of Chicago.
We wanted to make things better for everybody, and in order to do that, we kind of sat down, I buried myself in the books and asked, how much does everyone make on an hourly basis, as an average for the quarter, the month, the year, since they’ve begun here? And how can we get to a point where we can afford as a company to pay people their value, as opposed to what they’d just get paid in tips from guests, and help distribute that money that comes in from guests, and make sure everybody’s well taken care of?
It was really just coming up with a number for each individual. Now we pay people, front of house employees, based on their position, the amount of time that they’ve worked that position at this restaurant, what their background and expertise is, their knowledge on food and beverage.
We talk about sales numbers, but we’re not like, if you don’t hit this sales goal, you’re not getting a raise. It’s not like that, because it’s no longer a commission-based thing, where we’re not the ones paying the commission, the customer is. The goal in mind was just to even things out for everybody.
How did the servers react to this? Because it’s hard to see how it doesn’t mean money being taken from the servers and given to the cooks.
Everybody reacted really well. Our service staff’s really happy with the move. For us, we were definitely like, what’s the question going to be, what are their thoughts going to be, who’s going to leave us. We thought that our most senior employees were the ones who were going to be like, “Yeah, I’m not really down with that, I’m used to making my tips and my tips only,” and take off.
We sat everybody down one on one and said, this is what we’re doing, we want to make sure you know why we’re doing it, and that your questions are answered. We’re very transparent with our employees about how we’re doing financially, and as people, too.
They all stayed. Every single one of them stayed. They all said I’m on board, this will be cool to see, I’m excited to work through this and see what it’s all about. Payroll went in for our first week of it, and everybody did well.
The bigger people say, I went from [a tip average of] 22.7% to 18%, what happened to that money? Well, we made the change at a time when we were getting busier and busier. We did that for a couple of reasons, one so that we could accommodate that change, and two so that in our busy season, we can build up the reserves so that in our next slow season, we’ve already have the reserve to carry us through.
Sears: It went in hand in hand with when we were looking at the business as a whole. We looked at our sales per week, and approached it as a way to handle that revenue, rather than constantly pushing for more revenue—as most restaurants do, and it never happens.
So we were trying to figure out better ways to handle service, streamline things—like the kitchen, I basically knocked a whole station out of the kitchen. So I was able to streamline that to reduce the number of cooks. So then, there’s more money for everybody. We’re changing the service a little bit, so there’s less servers, now there’s more service charge coming in, but we’re able to distribute it where they make about the same money per hour as they were.
What’s the station you got rid of in the kitchen?
Well, it’s hard to say because there were three stations, and a lot of them did multiple things. But the majority of the one that I got rid of was the garde-manger station, which is the cold apps, charcuterie. Which is weird, because like—
The charcuterie platter of housemade meats was central to the concept of the restaurant—
Well, it was, but we kind of redistributed the focus back onto sausages, and kept that station the same. But people would come in, and they’d be like, why can’t I just get one [meat], why do I have to get the whole charcuterie plate? So you kind of tailor to that, but then people are like, why can’t I get the charcuterie plate any more? You just shake your head…
But it’s a matter of, the charcuterie plate, while it sold well, would need to sell enough to support a whole ‘nother body during the week. Which means it would have to bring in double or triple what it was. It’s so labor intensive to put it together, not just [making] the meats but the plating. And they were all different, so it wasn’t like you could make them ahead of time. My guy would be going down, and he’d have so much else to worry about, and it was like, it’s nuts, we just can’t operate like this.
Every restaurant in this city’s going to be wondering, how the hell do I fix this? How do I pay a server eleven dollars an hour at the same time that they’re collecting all the tips?
It was also a matter of looking at the overall situation—the fact of the matter is that we are a neighborhood restaurant. We have to hit a lower price point. I mean, we’ve got a Michelin starred restaurant down the street with $20 appetizers, but people think of us as the expensive place, when our entrees barely hit $20. Adam and I walk around and drink beer and wear lederhosen, but somehow we’re the bougie fancy restaurant in Logan Square.
Taxes are going to rise, which means people are going to be spending less money going out. And also, those salaried employees—they’re kicking around a bill where potentially salaried employees are going to get overtime. So it’s like, what can we do to hit all of these things, and turn a bunch of things around and be profitable.
Hebert: To be ahead of what’s down the road. Because it’s not a necessity for people to make a change like this now, but in the next five years—sure! Every restaurant in this city’s going to be wondering, how the hell do I fix this? How do I live with this? How do I pay a server eleven dollars an hour at the same time that they’re collecting all the tips?
The fact of the matter is, every single person who works in this restaurant aids in your experience as a diner. From the porter who checks the food in to the dishwasher, the line cooks. And it’s incredibly unfair that the only people who get a share of that gratuity are your bussers and your runners and your servers. As we began to cut things back in a way that we were beginning to save on labor, what we were beginning to see was that our servers were making more and more money, because there were less hands in the pool. Which doesn’t relate to the quality of service, the quality of food, anything like that.
People tip what they’re going to tip. You go out and spend money, you know what your budget is. You might tip a little more if service is especially good, but most people were just tipping 20%. Our tip average, consistently, was 22.7%. If it’s already such a mundane thing for everybody, and it has absolutely no weight on whether service was good, how is that an incentive for the server to do better, which is the reason why it was invented in the first place? It’s become obsolete.
It was this thing where, like, dukes and railroad barons would be at the grand hotel and they’d toss the boy who brought them tea a gold coin. And in America, that turned into the middle class tipping the middle class, basically. Which feels weird, and as a result, we’re just not very good at it.
I did a bunch of reading on tipping culture in the States. Because if you think about it, it’s a country that was founded on the basis of becoming classless, that was the whole reason that we wanted to separate [from England], you know? So tipping was not a thing in the States, for a really, really long time. Prohibition is what brought tipping back, because alcohol was illegal, and if you wanted to get something that was illegal, you had to slip some extra money to people. And actually, in a number of states in the U.S., tipping was illegal during Prohibition because it was leading to underground drinking clubs and that kind of thing. It’s amazing how much that period of history affected so much—
Sears: And how much of it hasn’t changed. I go to a wedding, I throw down a $20 and make sure that they see it, and I’m like, see this? Make sure my drinks keep coming.
You know, it sounds like you’re kind of saying it’s been government all along. It started with Prohibition and now it’s a higher minimum wage—
Hebert: No, no, I’m not—
Not to make it political, but you are kind of being driven by reacting to the policy environment.
It is and it isn’t—it’s a butterfly effect. One thing happens, and everybody kind of has to adapt to that change. I think [restaurant owners] find different ways of adapting, and in different environments the adaptation happens differently. Having done a lot of reading on what Danny Meyer’s doing in New York, I mean, it’s different from what we’re doing. He’s eliminating tips, but he’s doing it in a different way, and a lot of that is the laws in New York. There’s things that we can do here that he can’t do there, and vice versa.
You said the service has also changed, like the staffing in the kitchen. What’s changed in terms of the service?
Well, we haven’t changed the service yet, but it’s a planned change. And the change has a little bit to do with tipping, but more to do with the actual feel of the restaurant. We just want to…
Sears: Chill out a little—
Hebert: Get to a more chill environment. We have such a number of people in the neighborhood who come in on a regular basis, we just want to make it easier and more relaxed for them to be here, a couple of nights a week instead of just for special occasions.
In terms of service, that means we’re putting little flags on the table and introducing more of a Cologne-style service. So, you kind of call for your service when you need it, instead of the server coming back constantly.
These are moves we were going to make anyway, so they’re a little bit separate, but we just decided to do them all at the same time. So yeah, we’ll bring the roll-ups [silverware] to the table when you order food, because we have a lot of people who just come in to drink, and then we put the little cards on the table, they’ll have a little description of the service charge thing and why we do what we do, and how service works and how you can just flip it. When we seat them, we’ll say we do Cologne-style service here, which is even cooler because it’s a very German style of service.
Our tip average, consistently, was 22.7%. If it’s already such a mundane thing for everybody, and it has absolutely no weight on whether service was good, how is that an incentive for the server to do better?
Sears: It’s nice because you can have your main servers a lot less and your support more, and your support makes a little less per hour. But they’ll be able to walk by and say, oh, did you need a refill on your beer? But then you don’t need the face man, the server who’s the face, to be in it and handle everything. It’s kind of like the salesman at the car dealership, they hand it off to someone who hands it off to someone. In a weird way, it’s almost like old brigade system, or the captain system—
Hebert: The back waiter, and the front waiter—
Sears: But it’s more casual. We’ve even been playing around with the idea of getting the cooks to run the food, things like that.
Hebert: It’s cool because it’s really an opportunity to give people the chance to do more things, and try more things, take on more responsibility if they want to. With a server, and a busser, the server takes your order and does this stuff and collects this amount, and that’s it. That’s their job, and this is what they get from a tip perspective. And then the busser, you get a cut, like a hand down from it, and your job is to do this this and this.
If we change the style of our service a bit, so that everybody’s walking the floor and everybody’s helping everybody and everybody can do a little bit of—it’s like, you’re able to punch in orders now, because you’ve taken the training and you know the beer list, you’re comfortable selling it and we’re comfortable having you sell it. So, guess what, you get a little bump in hourly and you take on the responsibility of also taking drink orders. So now, when you see a flag, you can go to the table and you can say, how can I help you? Or you see somebody sit, can I get you guys something to drink, and you learn and grow. Which is the coolest thing.
I mean, nobody wants to be a service manager. You take a huge pay cut from being a server, to work longer hours on salary. Now, I can take a server, who’d be well qualified to be a manager, and say, I’m going to give you a little more responsibility, and I’m going to give you a little more compensation. And then the service manager we do have is the head guy, but he doesn’t have to work 90 hours a week, through breakfast, lunch and dinner, to make it all happen. He can go home two hours earlier and trust someone to lock the doors.
I’m so excited about this thing because there’s so many ways that it’s way better, just exponentially better for the operations of the restaurant, and the lifestyle of our staff. And from a guest perspective, it’s just simpler. You don’t have to worry, it’s built in, this is what it costs, that’s it.
So I know it’s just been about a week and a half, but what reactions have guests had to the changes?
Sears: We had a couple of people complain this weekend, but they were looking to not leave much of a tip anyway. One guy left a nickel, after he said the food was great, service was great, he bitched about the service charge—
Hebert: He said he didn’t want the service charge removed. He was just drunk and wanted an argument, basically, and not leave a tip.
Sears: Ultimately, as you build up, it’s a good way for us to control things a little bit more, like Adam said. Then, if you have your standout server, you can cut support staff, let the server work a little harder but then they’re still making their hourly, and then, because there’s more to the service charge coming into the house, we’re able to use that to increase the wages to the back of the house.
Ultimately we want to get them above a subsistence wage, because guys like [Brendan] Sodikoff, whose restaurants are just busy all the time, are like, I’ll pay $16, $18 an hour for line cooks. I don’t know many restaurants that can compete with that. A lot of them, like $13, $14 an hour is a stretch. So it’s nice to be able to consolidate a lot of things and know that we can beat the curve on a minimum wage increase. Because we want to do it, we just need to figure out how the hell to do it, and this seems to be a good way.
Hebert: And if somebody has an issue with the service charge, if they say service sucked, hey, I understand that sometimes, things happen. Something got missed, maybe we didn’t punch in a dish, stuff happens. We’re more than willing to take that off and say, I’m sorry. If you did not receive the service we expect you to receive, as a company, we’re not going to charge you the service charge. And it also helps them bring up the fact that they didn’t get good service, because a lot of people won’t tell you, hey, I didn’t get my dish.
Sears: But they still tip 20%.
Hebert: They tip 20%, and they walk out and leave a Yelp review.
There was a lot of talk after the Meyer announcement about how this less dog-eat-dog approach to compensating staff has the potential to soften and improve many of the things that are brutal, or at least brutish, about kitchen culture. Do you think that’s true?
Yes. Because the control of what our servers make is not on the guest, it’s on us, it takes away a power that I think some guests abuse. It doesn’t happen in this restaurant very often, but it definitely happens in a lot of other restaurants, where sexual harassment is a huge issue from guests to servers. There are a lot of lawsuits of sexual harassment in restaurants, and most of them don’t have to do with harassment within staff. They happen because a guest did something and a manager didn’t do anything about it.
When you work at a Denny’s in a small town, and your income is solely based on that tip, and a guy grabs your ass, what are you going to do? Are you going to be upset with him, and miss out on the tip, or are you going to go with it so you can feed your kids? It’s a huge issue in the industry, and I think this change in the way of doing things, I won’t say it will eliminate it, but it will significantly decrease the amount of incidences.
Right, because again, the aristocrat tossing a coin means that he can do what he wants. It professionalizes that relationship, between server and guest.
Sears: There needs to be a level playing ground with a lot of stuff. There’s so many problems with the way restaurants operate. Since we’ve opened, we’ve talked about a lot of ways to level out a lot of stuff, and we kind of thought a lot of things needed to change, and then you had the salary thing going up, the taxes going up, the minimum wage going up all at once.
And then you had a lot of great restaurants, like Honey Butter Fried Chicken who we know pretty well, they run a fast casual, but they do the same thing, they take all their tips and pool them and they distribute them. And if they can do it… the more we talked about it, we started piecing it together, and if we change the way we pay, then we can change the service, and—three or four major things, and we were like, let’s just put it all as one package, get everybody on the same page.
Spaetzle with housemade bacon.
Hebert: For us, our ultimate goal is to make sure our guests are happy, that our food is good, our staff is happy, and that in the end of the day we’re profitable, and pay our investors back, and we can live happy lives. Raise kids, and go to their baseball games, and have fun in life. I mean, that’s everybody’s goal, right? So it’s just like, what do we have to do to make sure that we can do that? And if one thing isn’t working, or you can see that it’s going to stop working, fix the problem before it becomes a problem. Or else wait till it becomes a problem, and deal with the shitshow later. It’s kind of up to you, you know?
Michael Gebert, though bougie even in lederhosen, is the editor of Fooditor.
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I would like to hear about how this wage distribution is affecting the cooks. The article focuses mainly on the front of the house and cutting into their wages, but is the back of the house getting fair compensation with this new deal? Thank you for somewhat referring to the fact that the skills of the cooks actually impacts the dinning experience.
They didn’t say the exact figure but the point of this does include an increase for cooks.
I understand that it a wage increase implied, but I would like more validation then simply an implication. Its always about the severs, they make the money, and now we hear their woes. Can we cooks get some good news? The struggle is real. The article start out how as switching to a cook, at 50% wage decrease was the price over being a server. This is not ok, and it would be nice if the balance was addressed wholeheartedly. Thanks for listening!
[…] there was something else the story got me thinking about, which had to do with my interview about tipping with The Radler on Monday. That’s the pressure that our food scene puts on the middle-level […]