Tuesday, August 16, 2005

Keller's Service Charge

The New York Times reports that Thomas Keller, arguably the world's greatest chef, will be instituting a mandatory 20% service charge for all guests at his Manhattan restaurant, Per Se. Keller has been charging 17% for service at his Napa Valley restaurant, the French Laundry, for years, but it didn't become newsworthy until it happened to New Yorkers. Almost everyone seems to be upset by this development, especially diners who cherish the ability to decide the value of the service they receive and waiters who, although they don't want to admit it publicly, are reluctant to pay taxes on all of their tips.

One issue seems to have been ignored in the many discussions of Keller's move, i.e., the propriety of charging a fixed rate for wine service. At Keller's restaurants, all diners choose from one of two menus and receive basically the same amount of service - the larger and more expensive menu requires the waiters to serve and clear more dishes than the smaller, cheaper menu, so it is reasonable for the waiters to receive more net tip. (For example, the waiter serving the cheaper $100 menu would receive $20, and the waiter serving the $200 menu would receive $40, but the latter would do twice as much work.) It doesn't work this way with wine. At Keller's restaurants, the same care and attention are paid to bottles of wine costing $50 (there are a few half bottles for that price) as for those that cost $500 (thus, it is not a case of receiving better service, such as recommendations, decanting, better stemware, &c.). Under Keller's new service scheme, waiters and sommeliers pouring from expensive bottles of wine will be making much more money than those pouring cheaper bottles of wine, although both will be doing the same amount of work. Under this scheme, if Diner A orders a $100 bottle of wine, Server A will make $20; but when Diner B orders a $500 bottle of wine, Server B receives $100 - for the same effort.

Stephanie pointed out a situation in which the discrepancy is perhaps more absurd. If Diner A orders five bottles of $100 wine, Server A will make the same $100 that Server B received for pouring just one $500 bottle. This situation is unfair to both servers and diners.

As a practical matter, diners generally tip the same amount regardless of what they spend on wine - always 20%, for example - so Keller's scheme may not make much difference. Nonetheless, it's an unfair and irrational system that penalizes servers and diners. So what's the answer?

Easy. Institute an across the board "corkage fee" for opening and serving all bottles of wine whether $50 or $500, purchased at the restaurant or brought from the diner's cellar. Under such a system, diners would get what they paid for and waiters would be appropriately compensated for their efforts. The tools are there, just use them.

1 comment:

Matthew Harris said...

Gratuities should be left to the customer because only the customer is able to determine the value of the service provided to him. The quality of service provided by the various members of the waitstaff varies substantially as do the gratuities left by the average customer.

I can understand the problems presented by the customer who leaves substandard tips regardless of the quality of the service; charging a set gratuity does not address the problem but instead raises new problems.

However, in response to your discussion of the fact that the effort required to serve a $100 wine is identical to that required to server a $500 wine, I would respond that the effort required to serve a particular entree is usually independent of the cost of entree. Should those serving more costly entrees be compensated at a lower rate?

A host of other considerations will show plainly that tips are correlated much more strongly to the final bill than they are to the effort required of the server. This is true both in a particular restaurant and across restaurants. Why should it be any different with wine?

I like Chris's suggestion, however. Perhaps this could extended to a surcharge per plate/item served? If it is reasonable to adopt this for wine charges then it seems consistent to me to adopt a similar scheme for other charges as well.