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Upton 43 Drops No-Tipping Model


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Upton 43, twin cities, minneapolis
Rye Pancake dessert at Upton 43. Photo by TJ Turner.

Round one in the battle against tipping is over.

Much was made of Erick Harcey's Upton 43 opening with gratuity included in the price. Servers would have a steady income even when the restaurant is slow and receive paid time-off. Dishwashers and cooks would make a decent wage, too.

I ate there and found the prices to be competitive with top-tier restaurants—the service was good, I got a bill, and paid it. So easy!

But after I first reported it, many servers contacted me saying that although they admired the intentions behind the new model, there was no way they'd take the pay cut. Upton hired servers at $18/hour and then gave raises based on experience and performance, much like the way most of us get paid. But servers had grown used to getting paid nightly, and the good ones were able to command the best shifts. Making $40/hour is not uncommon, and servers can make this without working a full 40-hour work week. They want to work three days and kill it every day.

After a month or so, Harcey and his team threw in the towel at both Upton 43 and Victory 44.

"Nothing went wrong, it was an experiment," said Josef Harris, a spokesperson for Upton 43 and Victory 44. "It helped us build a strong, unified and supportive service staff that works as a team," he added.

"Guests were completely on board, we had no issues from guests concerning the old no tipping policy," said Harris. "We actually had more problems with people wanting to leave a higher tip than the included 18 percent," he said.

Victory 44 raised its prices by 18-20 percent while Upton 43 set initial prices that much higher. The restaurants have lowered the prices by that same percentage since ending the "no-tipping" policy.

Harris said the service staff didn't rebel and guests weren't mad, but the math to make this all work out was really hard to achieve.

"If we were to stay competitive (price wise) we wouldn't have been able to continue the no tipping model. We would have priced ourselves right out of the market," he said. Until the market catches up or the no tipping model becomes more mainstream, they have to go back to tipping.

I was skeptical because so many servers have reached out to me telling me how crazy this new theory of a solid salary was, that it would be a big pay-drop.

"Our service staff was supportive, we have retained all staff since the switch," Harris said.

After returning to tipping, the salaries and hourly wages for the back of the house staff didn't change at all, according to Harris.

Across the country, restaurants have expressed interest in changing the payment model as a way to improve pay for non-servers as well as build up a pool of money to provide sick days and paid time-off. Most have failed. We shall see as the business tries to adjust to minimum wage laws that keep going up, especially in Minnesota where servers get paid full minimum wage even though guest tips can push their wage way beyond $15/hour.

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