AP Centerpiece: Waiters' Tip Fight Grows

By Betsy Schiffman
The Associated Press
Tuesday, September 12, 2006; 2:02 PM

NEW YORK -- Waiting tables is a stressful job and sometimes not even lucrative, given servers' sticky reliance on tips for income.

In some states, restaurants are only legally required to pay as little as $2 or $3 an hour. So if a server earns $30 in tips on a bad night, he could feasibly walk out having earned less than minimum wage after tipping out the bartender and busboys (a common practice in most restaurants).

To level the playing field, waiters are taking action. Some are resorting to guerrilla tactics _ it's not uncommon for waiters to personally confront stingy tippers, or to blog about them on sites such as WaiterRant.Net.

One former waiter, Yakup Ulutas, is proposing restaurants change the system. Ulutas, a 36 year-old restaurant manager in Atlanta, founded a nonprofit organization, Fairtip.org, to persuade restaurants to implement an automatic 20 percent service fee on every check. He estimates 2,500 waiters have joined.

You'd be hard-pressed to find a server who wouldn't love to see his or her employer slap an automatic tip on to every check. But wouldn't it make more sense for restaurants to hike prices by 20 percent and raise workers' salaries?

"That wouldn't work," Yakup says. "Many restaurants wouldn't be able to afford to pay higher wages."

The low-margin restaurant business is a notoriously difficult one. Raising server wages could easily zap the profits of small to mid-sized restaurants.

But diners have also seen a rapid rise in the tipping rate. Zagat Survey, which surveys the top restaurants nationwide, found that the average tip has increased from to 18.7 percent in 2006 from 17.75 percent in 2000.

At least one academic thinks that if the tipping rate rises too high, eating out will become prohibitive for many people, and restaurant sales will stall.

"Tipping is about buying social approval, and the way you do that is to at least tip an average amount, but most people want to tip a little bit better than average. That exerts an upward pressure on tips," says Michael Lynn, an associate professor at Cornell University School of Hotel Administration.

It would make sense for the restaurant industry to establish a norm before tipping rates move up to the point of pricing diners out of the market, he said.

While most restaurants already charge an automatic service fee for large parties, at least one restaurant began the practice of charging an automatic 20 percent gratuity, or "autograt," as it is sometimes called, on every check.

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