Jay Porter, the founder of Linkery (previously of San Diego but currently closed to move to San Francisco), eliminated tipping in the restaurant’s second year, instead applying an automatic 18 percent charge for service to all dine-in checks. Writing in Quartz, he explains that the move brought in more money. “Our service improved, our revenue went up, and both our business and our employees made more money,” he says.
Service improved, he explains, because servers and management were aligned in working toward a single goal and because the restaurant was able to find many people who wanted to work in the new environment. He also points to research that shows that because customers rarely change tips based on service, servers are incentivized to increase quantity rather than quality and target guests who are more likely to tip higher. Even if a tip does convey displeasure with service, that information may not even make it to a manager where it might be addressed.