You you've heard the reports that during the games many downtown restaurants are charging on averagy 18% auto-gratuity to deal with 1) extra flow/deliveries/hours and 2) those pesky tourists who come from countries that don't customarily tip, thereby protecting our servers. This generally seemed fine to me in the beginning because businesses have to take advantage of a two week party because when everybody leaves that'll be it. Vancouver will be twiddling their thumbs once more. What I didn't forsee, however, was that it would piss off locals MUCH more than tourists. Here is an amazing article that does the math:
Pre Olympics total tip take per night (10 servers 1.5 covers per seat, 3 bartenders, 3 covers per seat): $2,350 (rounded up).
Olympics with enforced 18% gratuity total tip take per night (10 servers 3 covers per seat, 3 bartenders, 4 covers per seat): $5,615 (rounded down).
Olympics with voluntary gratuity, total tip take per night (same servers, bartenders as previous): $3,035 (rounded down).
It's quite clear that even in worst case tipping scenarios, restuarants in high-traffic Olympic areas (like Yaletown) that are packed all day and eve are completely cleaning up on tips when auto-gratuities are enforced - more than double their take pre Olympics. Even with voluntary gratuities, they'd be making as much as $700 or more in tips per shift - but with auto gratuities enforced, they stand to make over $3,000 more, per shift in tips.
Do I even have to break down the smaller, 30-40 seat indie restaurant?Where it gets BAD - Industry's dirty little secrets
Here's where things get particularly bad - and I'm betting most consumers and many foodie-bloggers don't have a clue about this.
Did you know that management, and in some cases, the owners, take a cut in the tip pool that is sorted every night? In the case of many of the downtown chains (especially those with a big alcohol/bar focus), this is especially true. I'm not saying every restaurant has this policy, but you'd be shocked to find out how many actually do - some of Vancouver's top restaurants, globally recognized, have this policy in place.
Also, management and back of house (chefs, cooks, expediters, etc) do not trust servers - or do not trust them to be truthful with their entire tips take for the evening. This is why the end of the shift tip pool is based on sales, and not the server's word on how much tips they've taken in.
It is standard in Vancouver for servers to contribute four percent of their b]sales take into the house tip pool. Bartenders are typically 2% of their sales. Some restaurants have higher percentages - I know of at least 2 famous restaurants with 5% policy, and one with 6%. But let's go with 4%/2% to keep the numbers conservative.
So let's go back to our downtown chain restaurant with a booze focus restaurant - the 150 seat venue with 10 servers, 3 bartenders. The total sales pre Olympics might be $11,250 for all the seated covers, and $2,700 for the bar ($13,950 per full shift). Sales during the Olympics could skyrocket (based on similar pre Olympic cover sales x extra bonus customers) to $27,000 for all seated covers, $4,200 for bar (or $31,200 per full shift).
Those are huge numbers, to start with. Now let's look at what the house expects to take in tips total, and per server / bartender
Pre Olympics: ($11,250 x 0.04 = $450) + ($2,700 x 0.02 = $54) = $504
Olympics: ($27,000 x 0.04 = $1,080) + ($4,200 x 0.02 = $84) = $1,164
That is more than a 120% increase in tips take per shift for the house!
Just based on these numbers, it's quite clear that restaurants could have scaled down their house tip out percentage for the two weeks of the Olympics, and everyone could have still come out ahead - going to 3% / 1.5% would have still brought everyone - house, back of house, servers, ahead with more money each day - even based on lower voluntary tips.
Still - this isn't the full dirty little secret.
The whole auto gratuity thing isn't to protect servers - servers are cleaning up - enforced tip policy or not. It's not even to protect back of house staff.
One of the primary reasons for auto gratuities is to protect, and even enrich management and the house's take in tips.
At most (not ALL, but most) fine dining restaurants in town, management gets to dip their hands into the tip pool. In some cases, I'd say it is highly deserved - I've seen managers and assistant managers at some restaurants to do everything - bus, expedite, serve, fix, clean bathrooms, you name it.
But I've also seen managers who like to boss people around, and not do much else. At one restaurant (one I no longer frequent), I've been told first hand by staff there that the GM's weekly tip pool take is over $1,000. And management sucks at that restaurant.
Even worse is ownership taking a share of the tip pool. This happens much less and as far as I know, is not the practice at any independent fine / casual dining place where management isn't also ownership. But word is, it does happen with few of the chain restos in town (and no, not Cactus Club or Earls, as far as I know). Where it does happen is pretty bad - people who do nothing day to day in the restaurant's success are taking money from the tip pool - and taking money away from the back of house staff. The tip pool is for people who actually contribute to that meal, that drink, that service you got. Not someone sitting at home (or in their box seat at an Olympics Hockey game) during your meal.
That's pretty bad.
It gets worse
At least worse from my perspective. The tipping pool has become so standardized in Vancouver that back of house staff - the amazing chefs who craft your food, the expediters who get it moving on time, the back of house management, etc - even front of house management - all are paid sub-par salaries and told upon hiring "tips will make up your salary".
In other words, restaurants, from management to lowest bussing staff are ALL UNDERPAID. On top of charging you, the customer premium markups on alcohol (wine, beer, cocktails) and competitive prices on food, they fully expect you to pay a sizable portion of their staff's pay, directly (ie, no middlemen).
Now this leads to something very interesting. Revenue Canada has been coming down on servers quite hard the last decade or so - if a server gets audited, RC will look at their restaurant's books to see what the sales take is for the server's average shift, and will calculate a 12% amount for declared gratuities based on that audit.
However - Revenue Canada does not regularly investigate managers, assistant managers, section managers, etc at restaurants in the same way. And you can be pretty safe in betting that the $1,000 tip-take a week manager I mentioned earlier isn't declaring $52,000 in extra cash income, over and above his salary, to Revenue Canada.
This is just a snippet of the entire article which is definitely worth the entire read here.
Now some the most annoying parts about service is that servers, menus and restaurants don't TELL patrons that auto-gratuity exists until they get whammed with the bill. This is a major faux pas, in my opinion. Moreso- I do believe it is illegal for there to be a mandatory gratuity.
Now I'm sure there are some angry servers out there etc- but I've got to things to end with:
1) I used to be a server- so don't give me the run around that we don't respect servers. I immensely respect the serving job. It's possibly the hardest job I've ever had to do. But gratuity is a "thank you" to a wage. A mandatory gratuity assumes some sort of automatic level of service which NOT all servers grace customers with. In a lot of cases I wouldn't even mind paying the extra 20% if the service was impeccable. But it's the principle that it's automatic without giving customers a chance to decide whether it deserved the 20%
2) If we had LIVABLE WAGES we wouldn't even be talking about TIPS. Servers earn NOTHING. They someimes earn less than minimum wage. Yes it is illegal- but restaurants do it because they can. And we never talk about how in countries where tips aren't customary- wages are usually at a living standard- people generally get paid more and there is a good social security net for the population. So instead of targetting the servers let us target the industry and the practise of UNlivable wages.
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