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Will Philly restaurants ditch tips like one New York trendsetter?

Restaurant pros are suddenly more passionately divided than ever on whether tipping should be a thing of the past.

Jim Miller, a server at the Fountain since it opened in July 1983, examines glasses as fellow servers prepare the dining room.
Jim Miller, a server at the Fountain since it opened in July 1983, examines glasses as fellow servers prepare the dining room.Read moreDavid M Warren / Staff Photographer

Restaurant pros are suddenly more passionately divided than ever on whether tipping should be a thing of the past.

But most locals still plan to wait and see how influential restaurateur Danny Meyer fares with his game-changing new plans to raise prices and do away with gratuities at his 13 New York restaurants.

Eli Kulp and Ellen Yin of the High Street Hospitality Group support the movement in theory.

"The idea of eliminating tipping has been a very big conversation in our company lately as well," says Kulp. "There are so many different complexities and potential pitfalls. . . . Ellen and I are convinced that it will take a company like [Danny Meyer's] to allow this move to truly gain traction."

Others, like Jessica Mellen-Graaf, who with her husband, Marvin Graaf, owns Cresheim Valley Grain Exchange and Falls Taproom, sees both sides of the issue as an owner who still bartends.

"I enjoy working for tips," she wrote in a Facebook exchange. "The harder I work, the more I make. I appreciate the challenge of it all."

In a statement Wednesday to guests, Meyer said he wanted to "have the ability to compensate all of our employees equitably, competitively, and professionally."

Translation: Meyer wants to fix the huge disparity in compensation between the front of the house (waiters, who are tipped) and back of the house (kitchen workers such as cooks and dishwashers, who are not).

Meyer told the New York Times that in his 30 years in the business, kitchen income has gone up no more than 25 percent, while dining-room pay has risen 200 percent. (The consumer price index has risen about 120 percent over 30 years.)

Under Meyer's plan, kitchen workers would see more pay while the servers' financial situation somehow would not change. Meyer's statement referred to but did not explain a "merit" system, presumably to reward better employees.

Meyer plans to start the policy next month at his most expensive restaurant, the Modern, inside the Museum of Modern Art, and phase it in at the other restaurants by the end of 2016.

Higher prices

Some local restaurateurs are averse to universal change. Rob Keddie, Garces Group's executive vice president, said it had "no plans to adjust our gratuity policies." (Its luxe Volvér, one of three local restaurants to remove optional tipping, adds a 20 percent service charge to the bill.)

Many wonder how Meyer's system would work. Meyer said his prices would rise as much as 35 percent.

Some restaurateurs suggest that Meyer will also use the higher prices to help offset rising food costs, in addition to paying the added labor.

Meyer said he wanted to stay ahead of a planned rise in wages to fast-food workers, a movement that is gaining steam in New York and Philadelphia.

"It's better PR to say we're raising pricing to eliminate tipping and pay more than to say, 'We're raising pricing because of local laws.' It sounds greedy," said Michael Strauss, who owns Tap Room on 19th in South Philadelphia.

There also is the fine art of compensation for waiters. Will Meyer's system continue to reward the best waiters, or will it send them fleeing to work at another restaurant where tipping is still allowed?

Jim Miller, one of Philly's best servers for 40 years until he retired when the Four Seasons closed in December, is "horrified" at the prospect of Meyer's new model.

"Giving an owner 20 percent (plus) more revenue and then asking him to be fair is just plain ludicrous, and sounds like the old trickle-down theory," Miller says. "Who will be checking the accounting? Only him and his managers. . . . The servers will lose. Some of their money is now supposed to make it to the cooks. Sounds fair, feels foul. That money will hardly reach the cooks, who will see a small increase, but again not close to their worth, their production."

'A surprise'

The restaurants in Philadelphia that have eliminated tipping are few - Volvér, William Street Common (a bar-restaurant in University City that is pretty much self-service), and Girard (an independent restaurant in Fishtown).

Girard opened as a "no-tipping" restaurant that paid workers a flat salary of $13 an hour plus benefits, but later added a tip line to its checks as an option; workers in the kitchen and dining room now have a $10-an-hour guarantee plus potential profit sharing.

Meyer, whose book Setting the Table is known as the definitive book about restaurant service, is regarded as a forward thinker, making his Union Square Hospitality Group restaurants smoke-free about a decade before legislation dictated it.

It comes down to habit. "People want to tip," said Ed Doherty, a restaurant consultant who worked with Girard. "The reasons why were a surprise. It turns out that tipping is about the guests more than it is about a reward for good service rendered. The real push-back was: We were taking away the guests' ability to express themselves." (And in Philadelphia, locals reported leaving above-average tips, 19.8 percent, compared with the national average of 19.3 percent, according to a Zagat survey.)

But not all restaurants may be well-suited for the change, says Doherty: "You have to be a busy place to afford to put your team on salary. I do believe if you build a strong, healthy culture, you will win in the long run. But can you afford to do it in the first place?"

But the notion of raising prices to compensate for a move away from tipping scares Mellen-Graf of the Cresheim Valley Grain Exchange: "Some guests might appreciate why it's being done, but it's still going to scale back how much they visit."

Still, as an owner, she also sees the merit. "It would be nice to see this model work," she says. "I feel like tipping causes a lot of tension between customer and server."

Kyle McCarthy, 25, a Fork server who has worked the last five years in both New York and Philly, understands the skeptics, from Miller's concern that not all restaurant owners are reliably fair to concerns from some of his own colleagues who are reluctant to relinquish the rush of the occasional big payday.

But the prospect of a guaranteed hourly rate, he says, "is security for us when the difference in tips between summer and winter is huge and . . . will reduce staff turnover."

"I don't think it's a question of if this can work," McCarthy says. "It's a matter of when."