A newcomer to the restaurant scene wants to turn the industry upside down by doing away with tipping — likely the first in Canada to do so.
When David Jones opens Smoke and Water in June at the Pacific Shores Resort in Parksville, customers will never have to crunch the numbers to determine what 10, 15 or 20 per cent of their bill is to leave a gratuity.
“Tipping is a broken business model,” said Jones, an admitted neophyte in the hospitality industry.
Instead of tipping, Jones has increased menu prices by about 18 per cent and intends to pay his staff a living wage, which is a business model that is accepted around the world in places such as Japan, New Zealand, Australia and parts of Europe.
That means the 155-seat restaurant will pay servers between $20 and $24 an hour and cooks $16 to $18 an hour.
At Smoke and Water — named after its fire-inspired menu of barbecue and wood-fired pizza and its proximity to the ocean — Jones will also put aside a small percentage of gross receipts to pay for medical and dental coverage for his 48 staff.
“When you take away tipping, you find you get more seasoned servers and you’re able to increase the quality of personnel you get in the back of house,” Jones said.
It also goes a long way to eliminating the division between the two sides of any restaurant where the servers often make three times what the cooks do, he said.
Jones is going so far as to eliminate the lines on credit card and debit receipts where tips used to be penned in.
“We will not accept them, we will give them back,” he said. “If a tip is left and we can’t get it back to [a customer], we will donate it to charity.”
It’s a novel concept here, but a Canadian tipping expert thinks Jones may be onto something.
“He’s ahead of his time,” said Bruce McAdams, a 25-year veteran of the restaurant industry and assistant professor at the University of Guelph’s School of Hospitality and Tourism Management.
No tipping in Canadian restaurants is an idea whose time may finally have come, said McAdams, who has been researching tipping around the world for the last three years.
“Three years ago, I wouldn’t have said this will catch on, but I think there’s a 50 per cent chance that, in five years from now, the restaurant model could change,” he said. “And it will start with small, independent operators.”
McAdams said most restaurateurs he speaks with agree tipping is archaic and makes little sense, but all are loathe to change a system that has become ingrained.
“They say it will never change and consumers will never go for it and no one will have the stones to try it first,” he said.
But he argues that is changing with increased pressure and discussion about what constitutes a living wage.
“I think [Jones] may be on to something, there is potential to market this and create some product differentiation,” he said.
“There are low barriers to entry in the restaurant industry and there’s one on every corner fighting to find some difference with a competitor and, as a business strategy, I don’t think it’s a bad one right now.”
Frank Bourree is not so sure.
The principal of Victoria-based Chemistry Consulting and a hospitality industry expert said he’s not surprised Jones has no restaurant experience.
“It seems a bit naive to me,” said Bourree, who thinks it may be harder for Jones to attract wait staff who are used to making most of their money through tips.
“Often tips are more significant to staff than wages. They can make $150 a day in tips and that becomes their primary source of revenue.”
But Bourree was quick to commend Jones for bringing restaurant wages up to a living wage.
“Restaurants have been underpaying their staffs for years,” he said.
Jones said he hasn’t had much trouble getting staff, noting he has young servers and veterans — one with three decades in the business.
“Paying them this way allows them to carve out a career,” he said. “If you know that you are going to make between $20 and $24 an hour and get medical and dental, well that’s paying a great wage, considering the level of qualification needed for the job.”
The Smoke and Water restaurant is undergoing a complete renovation, with a grand opening date of June 2.