Tom Colicchio Eliminates Tipping During Craft's Lunch Service; Dinner Could Follow

Tom Colicchio, the New Jersey native who co-founded Gramercy Tavern with Danny Meyer before skyrocketing to fame as head judge of Bravo TV's Top Chef, has become the latest culinary figure to take on one of America's most deeply ingrained dining customs: tipping. When Colicchio's flagship Craft debuts its lunch service today, patrons will see a note at the bottom of the menu stating that "prices are inclusive of service." Colicchio won't prevent customers who want to leave cash tips from doing so, but he'll remove the tip line from credit card checks. No additional surcharges, aside from tax, will appear on the bill.

As part of this European-style service-included policy, employed by the three Michelin-starred Per Se since 2005, and the two Michelin-starred Atera since May, Craft will guarantee a higher than normal base wage for waiters, bussers, bartenders, and other staffers who'd normally rely on the generosity of diners to earn a decent living. "It's time for a change. It's time to pay the servers a salary," Colicchio tells Eater.

To make this feasible, and to ensure that the restaurant can meet all of its financial obligations, Craft will charge higher than typical prices. If this policy proves successful, Colicchio says he'll eliminate tipping at dinner as well, "ideally" by the year's end, a move that would let him skirt the burdensome effects of New York's decision to raise the minimum wage for tipped restaurant workers.

"It's time for a change. It's time to pay the servers a salary."

This is no small matter. Virtually every member of New York's restaurant community is scrambling to deal with the higher cost of doing business in the state. The full minimum, which went up by 75 cents to $8.75 in January, will rise again to $9 by the near year. The new fast food minimum, in turn, will rise to $10.50, while the tipped minimum, which is what waiters earn before gratuities, will go up by $2.50 to $7.50. Labor costs could increase even more if New York adopts Governor Andrew Cuomo's plan to raise the full minimum to $15 for all workers, a policy that might include an elimination of the lower minimum for tipped workers.

The consumer will end up having to bear the brunt of much of these wage increases in the form of paying more for their food and drink, but the rise in the tipped minimum poses another threat: widening the longstanding pay gap in fine dining between the kitchen workers and dining room staffs. The reasons for this are complicated. Briefly, in some of New York's best restaurants, front-of-the-house employees like servers and bartenders, who often make the lower tipped minimum, can end up earning hefty salaries thanks to gratuities, while back of the house workers like cooks and dishwashers, who earn at least the full state minimum, often take in less money because they can’t partake of tip pool, which is legally considered the property of the wait staff. So the higher the tipped minimum rises as the full minimum remains stagnant, the larger these imbalances become, which is why restaurateurs often tell stories about cooks who ask to pick up a dining room shift from time to time to help make ends meet.

But with a service charge or service-included system, the funds that would have went to the tip pool now become the property of the employers, who can redistribute those proceeds as they see fit, whether to pay rent, to buy fancy black truffles, or to provide cooks and dishwashers better salaries. Those wage redistributions, if implemented poorly, can come at the expenses of servers, which is why ending tipping has historically faced resistance (and defections) from wait staffs, who stand to earn less (on certain nights at least), in exchange for more steady pay.

Colicchio says his servers should end up benefiting from the new system. "Waiters don't want to work lunch shifts because they don't make as much money. So in a way, we're saying you don't have to worry about what you're going to make tip-wise and you'll be fine. So I think this will be positive for the service staff." The chef also says that during lunch, cooks won't necessarily earn more under the new system, where the disparity between front of the house and back of the house incomes "isn't as drastic" as during dinner.

Another point of contention comes with the customers, who might balk at the higher published prices that a service-included system might entail. "You've got to hope that consumers come along for the change, because they're used to leaving a tip. We're in a moment in time where it's easier to change that behavior. When you look at Uber, people like the idea of not having to leave a tip," Colicchio says.

At ambitious a la carte venues like Craft, service-included efforts are more rare.

Most restaurants that employ service-included policies, like Per Se in New York, the French Laundry in Yountville, or the chef's counter at Meadowood in St. Helena, are high-end tasting menu establishments with price-flexible clients – patrons who'll visit regardless of whether they're aware that tipping is factored into the price. But at ambitious a la carte venues like Craft, service-included efforts are more rare, as more price-sensitive consumers might not understand why a burger at restaurant A, where tipping is banned, is more expensive than a burger at restaurant B. Indeed, Daniel Patterson's casual Aster in San Francisco's Mission District gave up its service-included policy after a trial run earlier this year.

"We're in a unique situation because we're not [currently] open for lunch, so it gives us a clean slate to start," Colicchio says, noting that it would be tough for him to simply raise prices by 20 percent on an established menu. "If it doesn't work out, and I'm expecting it will, it won't have the same impact as if we disrupted dinner service. So the risks aren't as high at lunch."

Lunch salads and raw items at Craft will range from $15 for cucumbers with red onions and pink peppercorns, to $23 for black bass with watermelon and chile, while cooked proteins and pastas range from $20 for corn agnolotti to $34 for sirloin cap steak to $35 for lobster with tomatoes and lemon verbena. Lunch portions are individually portioned while dinner items are family-sized, which likely explains why some of the service-included prices at midday are still less expensive than the evening offerings.

Consumer price expectations will of course dictate which items Colicchio will be able to hike by 20 percent or more, and which items, like coffee, he'll have to leave untouched. Foccaccia with roasted tomato will cost just $4.