Recently on social media, I’ve seen lots of complaints about how tipping culture in the US is out if control, with people aggressively demanding tips.

Here are two examples:

 

The internet seems to be in disagreement with who is wrong. Is it the customer for not tipping, or is it the worker for demanding a tip.

I’m going to go with a third option that accurately addresses the problem.

The bad guy is the business.

As a buddy of mine put it so succinctly, the gig economy was just another way for the wealthy to fuck over the workers.

What most people don’t understand is that from DoorDash drivers to the stylist at SuperCuts, these people are effectively subcontractors.

They don’t have a wage. They get a percentage of the service price.

You go and pay $24 for a haircut, and the franchise gets a cut off the top and the stylist gets the rest. Technically, the stylist is renting the booth space.

Here is the kicker.

As inflation has made everything more expensive, these businesses are not increasing prices, or are not increasing prices as much as they need to to cover costs.

What they are doing is taking a greater percentage off the top.

In days gone by, the franchise take of a $24 haircut would have been $12. Then it goes to $16, then $20.

Some places, like implied by the massuse and DoorDash driver above, the house cut is 100%.

The business expect the customer to make up the difference in tips.

This system fucks over both the worker and the customer.

The customer is enticed by the low advertised price. Then the customer gets fucked when they feel strong-armed into paying another 20% or more for a generous tip.

The worker gets fucked because if they don’t get a generous tip, or even tipped at all, they don’t get paid.

The $24 you paid for a haircut that took 20 minutes just paid the stylist $3. If they manage to do two haircuts an hour, they made $6 without a tip.

Yes, your unhappy that you got guilty into adding a $10 tip.

But, how happy would you be working for $6 an hour?

This is absolutely one of those times when, “There aught to be a law” is appropriate.

I see three potential solutions.

1. End the gig economy like this, pay these people a wage like normal workers. This is probably the most drastic approach.

2. Establish a minimum percentage that workers are entitled to for services. The worker must get, say, 50% of the cost of the service with no additional fees to nickel and dime them to a lower percentage. If you pay $24 for a haircut, the stylist gets at least $12, guaranteed. If that isn’t enough for the house to operate, they need to raise prices accordingly. Businesses would also be forced to compete for good workers by offering above minimum percentage wages. This is my preferred option.

3. The advertised price must reflect the house and worker cut. If the business advertises an $80 massage, they must say:

Massage – $80, parlor $70/masseuse $10.

Then the customer knows that they should tip so the masseuse makes more than $10 per hour, or customers refuse to patron a business that pays its gig workers a shit percent. This is probably the least intrusive option.

Anyway this is dealt with, something has to be done.

The current situation is unfair to workers and customers, and is unsustainable.

The next time you see someone complaining that, “Tipping culture in America is out of control.”

Look at them and say, “Yes, franchise owners and tech bros are absolutely out of control fucking their workers.”

Spread the love

By J. Kb

14 thoughts on “The trouble with tipping”
  1. the other problem with tipping- traditional life waitstaff were pretty much the only workers expected to get a tip. here they get paid HALF of minimum wage. the rest is made up of tips. my wife has been doing this for 15 years. now, the problem- democrats and thier “fight for $15”. minimum wage has been going up and up and up.. so now people have the attitude- fuk em, they make $15 bucks an hour!” no, they don’t.. the other problem created is EVERYONE has a tip jar out and people get the attitude “no one deserves a tip for doing thier job”.. the stupid is getting deep.

    1. It’s the same across multiple industries.

      “I’m going to raise prices but not wages, then put out a tip jar to make up the difference for my employees.”

      Your Starbucks drink might have gone up $2 since 2019, but the worker’s wage hasn’t, so the workers are left begging for tips. It’s a shitshow.

    2. Your example varies by state. I owned a restaurant for a couple of years in Calif in the mid-’90s. Wait staff was paid (at least) minimum wage PLUS what they got with tips. It was up to the individual if they shared any tips with cooks or bussers. If the wait staff took a bad check with a 15% tip, they took the tip from the till that day. If the check bounced, the owner took the loss of the whole thing.

      I’m not keen on tipping under any circumstances (unless that is the sole salary and it is explicitly stated as such). At best, tipping should be limited to exceptional service. Extra money should not be expected for doing a job properly (do we need to start tipping mechanics and plumbers; tip cops for writing speeding tickets?)

      One of the main reasons (I believe) for the gov’t to be against the gig economy is that it can’t track the money and feels it is missing out on tax money.

  2. I have been dealing with this situation by informing the customer/client of the overhead costs. I break it down line by line so they can positively understand how their money is being appropriated, appreciated and how it provides the incentive and inspiration for the excellency in services that they can reasonably expect and will therefore receive.
    .
    When you pay the latest adjusted for inflation price for services you will receive professional grade materials, best in the industry, along with second to none customer and client services designed to meet the level of product you choose to pay for. Please note exactly what your money will give you and please inquire about our custom designed packages for our best deals for your particular needs. All gratuities are already included but please feel free to add to that in accordance with the level of product you enjoy, Thank You.

  3. One other thought on this subject as I sit here smoking a fine cigar which used to cost two to three dollars less a year ago.
    .
    When I go to a local quality restaurant, being a businessman, I expect to see the prices increasing and if I don’t I am always suspicious that the quality is taking a hit—using cheaper ingredients which are less healthy, which will also have more salt to mask the lower quality experience. Salt, believe it or not, is the reason people say, “Wish I could make this dish this good at home”—if they saw the salt used, which they would never use at home, they’d think twice about consuming it.
    .
    If the price is not increasing in pace with inflation, then the quality must be suffering exponentially. If the price doesn’t go up, then the quality must come down…it’s that basic. And the people who feel that they should not have to pay more for what they always got before are not the customer base you should be interested in.
    .
    By being truthful about overhead costs in the menus, you’re assuring the people who will be able to continue frequenting your establishment when the economy continues to decline, that they are in fact getting exactly what they always had in the past. Quality has a market cost, your target customer-client knows this and expects you to deliver as you always have. Those that don’t understand or can’t afford the quality they have always enjoyed will have to make a choice or subject themselves to something far less in value.

  4. You are not going to get rid of the gig economy now. That train has left the station.
    Not unless the people participating stop doing it.
    .
    There are too many people who like setting their own hours, selecting which job they want to run and which they want to skip. Just do not feel like driving after this last rider? Not a problem, you are your own boss, stop working.
    .
    However, places like supercuts where the franchise sets the rates, regardless of how much they take, that is where the problem really lies. “Our cut for this service went up a dollar, but we cannot raise the rate, so you suck it up.” Nope. Again, if all the hairdressers quit they would have a problem…
    .
    The big issue is tips have become wages in the US. Businesses pay employees less because tips are practically universal. The cashier at your supermarket is going to have a tip jar any day now. Heck, the person overseeing the self checkout will likely have a tip jar as well. Why? Because the company can pay less.

  5. I’m still trying to figure out how any of the above ‘justifies’ an entitled shitbag of a delivery driver literally robbing a customer. If you want to know why people don’t feel like tipping gig workers anymore, just look at him, and reflect on the fact that most of his comrades in the industry support him and not the victim.

  6. Inside tip: look at what they’re driving when they deliver. Is it a fleet vehicle, like Kroger’s blue vans for home delivery, or is it a personal car. A fleet vehicle almost certainly means they’re full-time employees, benefits, the whole deal — and I know Kroger does not permit tips for their home delivery.
    .
    If it’s a personal car, then, yeah, the tip is going to most or all they make. Doesn’t justify refusing to deliver and stealing from the customer, of course.

    1. DoorDash is notorious for both fucking over its drivers and restaurants. The DoorDash discount code doesn’t mean DoorDash corporate doesn’t get paid, it means the driver doesn’t get paid and the restaurant takes a hit.

  7. The issue of how much to tip, is separate in my mind from new occupations asking for tips. For instance, we found a note on a box from Amazon asking for tips for the driver.
    .
    Just to reiterate a point made above – just as the customer has a choice whether to purchase services or goods, and if so to decide how much to tip; the person providing the service can also choose to (at least try to) find better employment.

  8. Many interesting viewpoints on this subject. one I haven’t seen mentioned yet is the mindset of entitlement for tips for the american service worker. If you go to a restaurant, say, in southeast asia- they do not get tips there, they do not accept them if you try, yet their service and attitude for serving you is always great. Here in the US it’s hit or miss, to be honest. Yet they all expect a tip for their service, even if it’s not good. Maybe the solve is to change how their paid per J. KB’s suggestion? Not sure. Agreed something is broken and other countries methods prove that people can serve well without tipping involved.

  9. Yes…the problem includes the greed of business owners. But that isn’t the only factor. Just one of them.
    I don’t tip beyond normal wait staff because I don’t make use of such “service industry” workers. I DO FOR MYSELF
    what they expect to be tipped for. I am NOT ALLOWED to accept a tip for my work. Doing so would cost me
    my job and probably my professional licensure. So this “push to tip” just annoys me. It doesn’t make me feel guilty for not tipping.

Only one rule: Don't be a dick.

This site uses Akismet to reduce spam. Learn how your comment data is processed.