WASHINGTON — Joe’s Crab Shack is planting the first major flag in the debate over whether restaurants should discontinue tipping.
Ray Blanchette, CEO of the parent company that runs Joe’s, reportedly told investors last week that 18 of its 131 restaurants are testing a no-tipping policy, making it the first major full-service chain to jump into the fray, reports Consumerist. A hospitality group in New York City announced that it was banning gratuities in all of its high-end restaurants in October.
The locations testing the policy will compensate waitstaff for their lost tips by increasing their starting minimum wage to $14 from $2.13 hourly, reports Restaurant Business.
But don’t think diners won’t still pay: the increased wages will be reflected in higher prices, Blanchette told Restaurant Business. Blanchette heads the Ignite Restaurant Group, whose holdings also include Brick House Tavern & Tap. There are five Joe’s Crab Shacks in the greater D.C. area, but it is not clear if one of them have stopped their gratuities at this time.
According to Blanchette the goal is to prevent staff turnover and improve service, though the “testing” is supposed to ascertain whether either will be achieved when waitstaff no longer make tips.
“I personally believe tipping is an antiquated model,” Blanchette said in the call, according to the OC Register. “The no-tipping service model gets us above the fray with regards to the increased minimum wage conversations that seem to be happening all over the country.”
He says he believes staff will tend to stick around when longer at the mercy of slow shifts and diners’ generosity — or lack thereof.
