Oakland Restaurant Toast Kitchen & Bar Launches Hybrid Tipping System, But Should Other Restaurants Do the Same?

As the city of Oakland, California raises its minimum wage, a local restaurant is getting creative responding with its own unique hybrid tipping system. Toast Kitchen & Bar rolled out a system combining service charges and tips designed to save customers money while providing its employees a living wage. It sounds like a situation where everyone wins — but should other restaurants adopt a similar approach to tipping?

In March 2014, the ballot to raise Oakland's minimum wage from $9 to $12.25 per hour passed with overwhelming support. In response to the wage increase, several restaurants considered jacking up menu prices by as much as 30 percent. In hopes of retaining its loyal customer base by not pissing off diners with exorbitant scrambled egg prices, the urban Americana restaurant decided to circumvent the spike with a clever service charge breakdown. The restaurant posts an additional 15 percent service charge on every check which gets split between all servers, cooks, dishwashers, and bussers. In addition, satisfied customers are encouraged to leave an extra 5 percent tip intended solely for servers. Given this dining theory, customers who are now making more money are spending less money, while service industry employees are earning more sustainable wages. Sounds too good to be true, doesn't it?

Sure, customers save money while the restaurant bolsters front and back of the house fairness by establishing pay equity, but as a veteran server I can't help but wonder: just how much money are servers walking away with at the end of each shift? The 15 percent tip pool may be sustainable, but is it truly livable? While diners have expressed nothing but positive reactions via restaurant comment cards, does the waitstaff share the same sentiments?

Although it has yet to be determined whether this hybrid tipping system will be beneficial to all parties involved, one thing is certain: albeit slowly, city by city, vote by vote, our country is working its way toward the establishment of a living wage. Food for thought, indeed.

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