An Oakland Restaurant is Using an Interesting Hybrid Tipping System
In DepthAn Oakland, CA restaurant is trying something unusual in response to the city’s rising minimum wage: a hybrid tipping system involving both a service charge and tips — but tweaked so that it actually saves customers money and appears to allow employees to make a living wage.
Oakland’s Toast Kitchen & Bar is now utilizing something creative in the wake of the city voting to raise the minimum wage: they’re posting a 15% service charge on every check (split between servers, cooks, dishwashers, and bussers, leaving out only owners and managers), but then also encouraging a 5% extra tip (service-dependent, obviously) be left purely for servers. Owner Heather Sittig Jackson explains how this move helps customers as well as employees, via Eater:
Sittig tells Inside Scoop that this isn’t just an issue of fairness: it will save diners money. The alternative many of her fellow restaurateurs are considering is raising prices 30%, which will affect customers far more. She uses the example of a party spending $40 on brunch: with tax, the service charge and extra 5% tip, the meal would be $52.25, but with tax, a 30% price increase and a traditional tipping system (with good service and a 20% tip assumed), the meal would be $66.84, an increase of $14.59.
Customers reportedly are enjoying it, too: Jackson reports that they’ve been leaving comment cards out for feedback on the new system, and they’ve yet to receive any negative reactions.
I’d have to see the actual numbers to figure out how well this system works, but it’s important to note that one of the reasons it might be able to is that minimum wage is higher in the Bay Area than elsewhere — Oakland voted to raise the minimum wage* from $9 to $12.25 starting in March. Granted, this still isn’t as high as San Francisco’s plan to raise minimum wage to $15 by 2018, but Oakland’s cost of living also isn’t as high as SF.**