As New Yorkers flock back to reopened restaurants, tipping rates appear to be sliding to lower pre-pandemic levels, according to a new report. The New York Times obtained tipping data from two payment services regularly used in restaurants — Square and Toast — which revealed that on average, customers are no longer shelling out large tips for in-person and takeout orders, as compared to tipping activity during the pandemic last year.
Last spring, when the city first went into lockdown, average tipping rates rose from just under 20 percent to about 25 percent for online and in-person food orders, according to Square and Toast data. Average tip amounts then hovered just above 20 percent for much of last year, save for a short-lived spike around Christmas. Now, as restaurants move away from takeout and delivery and reopen dining rooms without capacity restrictions, tip rates appear to be settling back to pre-pandemic levels, just below 20 percent.
The data lines up with what restaurants have been experiencing first-hand. Customers at Fort Greene Mediterranean restaurant Olea are back to tipping 20 percent on average following a spike last year, owner Dan Demarti tells the Times. Baba Cool barista Nick Drake says that tips have declined following higher rates last spring and during the city’s second COVID-19 wave at the end of last year.
The decline in tips could be tied to the perception that service workers are no longer working risky jobs during the pandemic and no longer need hazard pay, Mike Lynn, a professor of services marketing at Cornell’s School of Hotel Administration, tells the Times.
Tipping on takeout and delivery orders also declined from last spring, although rates remain slightly higher than pre-pandemic tipping averages. On average, people tipped around 13 percent on takeout and delivery orders in the months before the pandemic. Tipping rates went up to between 15 to 16 percent on average last spring, and have since settled around 14 percent, with delivery orders getting slightly higher tips than takeout.
But the data also showed that while average tipping rates may be declining, more people may continue tipping overall. In early 2020, before the shutdown, between 50 to 55 percent of online and in-person food orders included a tip, according to the data in the report. After the shutdown, that number rose to about 65 percent of orders, and stayed there all of last year and through the city’s reopening this year.
The report also underscores longstanding issues with tipping, which can easily fluctuate at the whim of customers. Tipping has long been an unreliable pay system that, when tied to an employee’s core wage, can further racial and gender pay inequities in the industry, studies have shown. Some restaurants, including Crown Heights neighborhood bar Hunky Dory and newly opened West Village seafood spot Dame, moved away from using the tipped minimum wage during the pandemic in an effort to address longstanding issues with the labor model.