The Server Should Serve

In less time than it takes for a server to refill your drink, you can find a handful of social media posts from service industry employees cataloging their sufferings and listing their demands. They range from litanies defining how customers should behave to emotional breakdown videos of Starbucks baristas in broom closets with snot dripping on the camera like a scene from The Blair Witch Project. Not only has tipflation become a societal plague, but so has the underlying mentality of many in the service industry who believe they are part of a protected class owed a percentage of all money that changes hands simply because they show up to work.

Why we tip

Let me start with the two most coherent and defensible arguments I have read for the practice of tipping: principal-agent, and buyer monitoring. Principal-agent states that tipping helps align the server’s interests (maximize tip) with the customer’s interests (receive great service), avoiding the need for managerial oversight. This has been further expanded by buyer monitoring theory most notably by Ofer H. Azar who states, "Tipping shifts the task of assessing employee performance to customers, addressing the service industry's difficulty in monitoring employees." These theories show that tipping isn’t merely the restaurant offloading its payroll, it’s a performance management mechanism delegated to the customer.

So how do we define the relationship between restaurant, waitstaff, and customer in this equation? The waitstaff are not so much employees of the restaurant, as indicated by their pay structure, but independent contractors who have entered into a mutually beneficial arrangement with the restaurant to use the location to ply their trade. The server is not a wage worker, but "rents" the table section for a shift. They use the restaurant’s infrastructure to sell a service, and their compensation comes directly from the customer. The restaurant provides the venue, the food, and the brand, but the economic transaction between server and customer is solely based on service. The customer is functioning in the role of employer and is compensating the work based on performance.

With this in mind, the open disdain exhibited in social media tirades against the customers, and the disordered power dynamic between the participants makes less and less sense. The customer is the boss, and in an employee/employer relationship, it is not the employee who sets the standards or makes the demands.

This Historical Nature of the Job

Which brings us to the nature of the job itself. The word server comes from the verb serve, and this is not in reference to the transactional duties, but to the historical root. It is a hierarchical arrangement. The role of server was held by household servants in aristocratic homes. The expectation was not just to deliver food, but to do so with ritual, deference, and symbolic recognition of status. The servant was expected to anticipate needs, present food gracefully, and demonstrate deference and etiquette befitting the guests. It was not just service, but symbolism.

When public restaurants first opened in 18th century Paris, these expectations were transferred. In fact, the first servers were often staffed from these households since they knew how the job should be performed. There was an expectation that one would have manners, discretion, knowledge of etiquette, and deference to those who were paying, and those who were paying did so primarily for the chance to feel like an aristocrat being served.

It is unreasonable to assume the current practice should be separated from its historical and social genesis. It is a social and financial contract based on behavior and protocol. The customer is to be served, and the level of service is recognized by payment.

If a person doesn't feel comfortable taking this position in the social hierarchy then they should look for employment in some field that doesn't fall under the term "service industry." One is not expected to fix a roof with a smile on their face, or change oil with panache, but if the skills you are selling hinge on social interactions then you should be prepared to do both.

It isn't Entitlement

These arguments are not founded on entitlement in the way it is commonly weaponized. They are built on the legitimate entitlement of expecting goods and services when providing payment. It is not entitlement to expect all of your groceries after you pay for them. We don't simply let the bagger take a few things off the top because they helped bring them to your car. You pay them separately for the quality of the service they provide. Would you not pay them less if they broke your eggs and scratched your door? Perhaps you wouldn't pay them at all. There is a legitimate entitlement to receive the goods and services you’ve paid for.

How Much is Enough

This brings us to the question of how much is appropriate for these services.
In the 18th and 19th centuries, tipping was generally a small flat fee for good service and nothing for bad. In the 20th century, 10% became common since a general rule of thumb assumed higher prices equalled higher service and effort. By the 1980s, 15% became standard for good service and adjusted down to indicate subpar performance. Around 2010, the amount rose to a default 20% primarily as a result of digital POS systems that suggested higher amounts, guilt marketing, and social pressures.

This creep can only partially be justified if a certain formula is maintained: the more expensive the restaurant, the better the service. In other terms, the nicer the restaurant, the more the waitstaff should conduct themselves in a manner appropriate for the price and expectations. The server should be more deferential and well mannered as the price increases. When this equation becomes unbalanced, then payment as a percentage cannot be justified.

When you are paying more, the chef should be trained and competent and so should the waitstaff, and this is often the case at very high end restaurants. But the equation quickly falls out of balance at the upper and mid level tiers. I would ask you to consider the service provided the last time your meal was $50-100. Would you say it was significantly better than when your meal was $15-20? If not, then why should the IHOP server get $3.50 and the steakhouse server get $15? If we are paying for competence and skill, then why would there be a difference? Again, the restaurant is providing the food and the justification for its price, the server is an independent contractor selling only the value of their services. We pay specialists more than generalists because they have a higher degree of training. The managing lawyer has a higher rate than the junior. Why is it that servers should be paid a percentage regardless of their expertise? The simple answer is social pressure and guilt. That is true entitlement.

So far this evaluation has been based on historical expectations, but the most egregious example is the contemporary prospect of tipping on top of wages paid by an existing salary structure. Our Blair Witch friend at Starbucks is the perfect example of someone already paid a fair wage for the duties required, but who has somehow ridden on coattails into the tipping world. Performing a skill that is taught in 2-4 weeks gets them a standard minimum wage of $15 per hour with a national average of $17.50, which is further adjusted to an average of $27 when benefits are included. And these benefits include medical, dental, matched 401K, stock options, time off, tuition assistance, memberships for music and therapy services, and a free pound of coffee each week. Hell, after 10 years they are even eligible for a one year sabbatical with a guaranteed job at the same level when they return. Most colleges aren't that generous to the comparative religion professors who helped prepare them for these jobs.

The Next Time You're Asked to Tip

The tipflation outrage has gotten us nowhere, and I don't expect this little tirade to change the world, but hopefully it will change your perspective. If you are a server, understand the nature of your job and act accordingly. If you want 20% on a $500 table, develop your skills, manners, and etiquette. If you are a customer, I hope this places the arrangement in perspective and gives you the confidence to tip accordingly. We don't owe anyone more than the quality of their work.

The entire practice of tipping should be up for reevaluation. For those who provide poor service, we shouldn't offer a 15% nod of dissatisfaction, we should offer a refusal. For those who are already being paid a salary to perform their duties, a tip shouldn't even be considered. When someone turns an iPad toward you at a cash register, decline with a smirk. You are not rude. You are correct. You have the force of history, tradition, economic theory, and principle on your side. Don’t just complain about tipflation, actively participate in a return to sanity.