Danny Meyer's USHG ended tipping with one all-in menu price (interview)

In an NPR interview a year after the change, restaurateur Danny Meyer, CEO of Union Square Hospitality Group (Gramercy Tavern, The Modern), says he eliminated tips in 2015 and raised menu prices to bridge the earnings gap between servers and kitchen staff. His non-negotiable, he says, was that a group promising guests the best dining experience cannot run an economy that looks after only tipped employees. He says he asked kitchen and dining room staff to help leadership do the math, and that people trusted them.

He calls the program 'hospitality included': one price on the menu, so a $28 chicken covers the linen, flowers, cook, reservationist, server, wine director and rent, with no gratuity line. It is 'a jolt' when guests first see it, he says, but he says the group has not, to his knowledge, lost any guests and has had a strongly positive response. He rejects the idea that tips motivate friendliness, noting that bad service happened under tipping too.

The costs are real: Meyer says every restaurant saw an initial profit dip, then recovered as managers learned the new economics, and chefs used to a food-cost percentage see the math change dramatically. The group also pays more sales tax because tips are not part of taxable sales. He advises other restaurants to overcommunicate and be patient, and says he would not go back. These are his own accounts.

Tipping pays front-of-house staff while kitchen staff, equally essential to the guest's night, earn less.

One all-in price lets the restaurant allocate the money across all staff.

Staff helped design the system, so they trusted it.

A single clear price avoids a separate gratuity line at the end of the meal.

If you want to fix a pay gap the tip system creates, change the price the guest sees, and plan for a profit dip while managers learn the new economics.

A year in, Meyer said each restaurant had seen an initial dip in profit that then recovered, and the group had faced higher taxes. These claims are self-reported in the interview; the interview gives no figures for revenue or staff turnover.