With a growing wave of restaurants implementing new no-tipping policies, most industry insiders are questioning whether it’s the most beneficial choice for employees and customers. But what about the restaurant itself?
In an interview with the Freakonomics podcast, restaurateur Danny Meyer explained that the month after implementing his no-tipping policy at The Modern in the Museum of Modern Art has been the most profitable month ever for the restaurant.
“Doing the right thing is the most profitable thing,” he said. “I never would have guessed we would already be profitable this early on — thought this would be a long slog.”
The Modern was the first of Meyer’s restaurants to adopt the “Hospitality Included” policy. Even though the restaurant had to make up for funds lost from tipping by giving managers and servers raises, it still came out on top. Why? According to Meyer, the profitable month is thanks to the buzz surrounding his new policy, which has received mostly favorable reviews.