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Joe's Crab Shack considers no-tipping policy
A sign for Joe's Crab Shack is seen in San Francisco, California in this file photo. The restaurant has been piloting a no-tipping policy at 18 of its locations around the U.S.
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Joe's Crab Shack said Wednesday it's looking at expanding a no-tipping policy piloted at 18 locations around the U.S., as more restaurants around the country consider similar moves.
The new policy is intended to benefit not just guests but also restaurant staff, including servers, hosts and bartenders, the restaurant said in a statement. Staff will benefit from higher pay and fixed hourly wages, which Joe's said will lead to an "improved team atmosphere, greater financial and employment security and reduced turnover."
Ray Blanchette, CEO of Ignite Restaurants which owns the chain, portrayed the move as an attempt to take full responsibility for paying the staff. Waiters often get paid at a lower rate because they're expected to make up the difference with tips.
"I personally believe tipping is an antiquated model and you have seen most businesses in America migrate away from it over the last 50 to 100 years," Blanchette said in a prepared statement.
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According to the Los Angeles Times, the 18 test locations are Indianapolis and Hobart, Ind.; Columbus, Ohio; Bellevue, Ky.; Ann Arbor, Auburn Hills and Sterling Heights, Mich.; Omaha; Fairview, Peoria and Schaumburg, Ill.; Robinson and Pittsburgh, Pa.; St. Louis and Independence, Mo.; Olathe, Kan.; and Salt Lake City and West Jordan, Utah.
Joe's joins a growing list of restaurants that have begun experimenting with no-tipping policies, including Chez Panisse in Berkeley, Bar Marco in Pittsburgh and Alinea in Chicago, according to Fox Business.
To compensate for the loss of tips, restaurants typically increase their costs to ensure staff are still receiving similar pay. While Joe's would not say exactly how much its prices would change, it did say the difference would be "typically less than the average 20 percent service tip."
By comparison, the Union Square Hospitality Group, which also recently went to a no-tipping policy, said prices at its 13 restaurants in New York City would go up 21 percent to 25 percent, according to Eater.
Joe's said there is no timeline for a national rollout of the new policy, but it's looking at the results of its pilot program.
Joe's locations in Southern California include Garden Grove, Long Beach, Newport Beach, Rancho Cucamonga and Redondo Beach, among others.
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