The anti-tipping train keeps chugging along. Gabriel Stulman — the young hospitality guru behind a collection of six casual downtown restaurants — will raise prices, increase wages, and eliminate gratuities at Fedora in January. And Stulman says that if the no-tipping policy "turns out to be everything it can be," he believes that "everyone at the company will want to adopt it." The restaurateur says another one of his restaurants could switch over to no-tipping as early as the end of the first quarter, but Stulman stresses that he'll test drive the system at Fedora for two months before making any firm decisions on whether and when that will happen.
Why start with Fedora? Because like its sister restaurant, Perla, there's just one service, dinner, meaning Stulman won't have to deal with the complexities of raising breakfast, lunch, and brunch prices. Stulman himself has been working as the maitre d' at Fedora two nights a week, and he'll increase that to four in January. "If we're going to make any big change, it's great for our guests if I'm in the dining room, and they're able to hear things directly from me," Stulman says.
Stulman is the latest in a string of high profile venues to rethink the classic American gratuity system (and hospitality industry pay) in the wake of Danny Meyer announcing that his plan to eliminate tipping at all 13 of his New York establishments. Eleven Madison Park and Huertas, both run by Meyer proteges, are following suit with so-called hospitality-included policies, wherein prices reflect the full cost of dinner, including service. And just yesterday, Andrew Tarlow announced he'd go gratuity free at Roman's, Marlow & Sons, and all of his other hip Brooklyn hangouts.
The lure of ending tipping is simple: By raising prices, the funds that would have counted as gratuities, which are the property of the employee, now count as revenue, which belong to the employer. Owners often use that extra income to raise wages for cooks, who typically earn less than waiters because they can't collect tips. These moves become all the more desirable as New York increases its tipped minimum wage by $2.50 in January, a pay hike that restaurants can sidestep by ending tipping.
The big risk, of course, is that diners might balk at the higher prices, especially at the casual level, where there's fiercer competition for walk-ins. So at Fedora, prices will increase by approximately 24 to 26 percent, which means the $26 fried chicken will likely cost over $32 – not really a heck of a hike considering that you'd now spend $31 after tip.
Line cooks will see an hourly raise immediately as of January 4, when the new system will go into place. So at the time of the changeover, cooks will earn $12 to $15 per hour, while servers will make $9 per hour plus revenue share. Entry-level managers in the dining room and sous chefs will see their pay increase by 10 to 20 percent, a particularly vital step to ensure that those individuals no longer take a pay cut when they make the jump from being an hourly server or line cook (who's eligible for overtime) to a salaried worker.
And to avoid the type of waitstaff defections that sometimes accompany the switchover to tipless systems, Stulman will implement "guaranteed wages for the members of our dining room team to be consistent with what they were averaging before the change." Meyer is doing the same with his waiters for the first three months of no-tipping at his restaurants. Incidentally, the fact that average tips at Fedora have hovered around 21 to 22 percent for the past few years partially explains why Stulman is hiking his prices above 20 percent; otherwise he wouldn't be able to keep waiter pay whole.
Like with Meyer's restaurants, Stulman won't have a line for optional extra gratuity on the guest checks. And Stulman will do his best to inform guests as much as possible about the new policy. "We want you to get the message so many damn times," he says, adding that he's considering sending out no-tipping reminders as part of Resy's confirmation text messages, the online booking system he uses at his restaurants.
One other note: To offset the increase in New York's minimum wages in 2016, prices at Stulman's other restaurants will tick up by about 5 percent.
New York's restaurant cooks, on average, make $13.29 per hour, while waiters make $14.44 per hour. The city's living wage, according to a widely used MIT gauge, is $14.30.