Danny Meyer, the founder of the popular international fast-food chain Shake Shack, is facing public heat after sharing his views on tipping culture.
Meyer appears on CNBC’s talk show Squawk Box on Thursday. Host Andrew Ross Sorkin had a few things to discuss with Meyer, including hiring and pay in the restaurant business and the culture around gratuity, especially in the US.
During the show, the host brought up the subject of preset tip amounts seen on point-of-sale toast devices at restaurants, which often begin at 10% or 15%, and usually go up to 30%.
CNBC Television/YouTube
Meyer said that Shake Shack introduced these “tipping opportunities” about a year and a half ago, but when asked what these suggested percentages looked like, he said he had no idea.
The restaurateur believes tips are fair in a fine dining restaurant, where 20% gratuity is commonplace.
“[But] if you’re just taking out food and it was just a transaction, I give you money, you give me a cup of coffee, I don’t think there’s any obligation or tip whatsoever.”
This take has not gone unpunished by the internet.
Some believe it shows how out of touch the rich and powerful are. Many are criticizing big food businesses for not paying their employees enough, which leads to workers depending desperately on tips from patrons.
“Businesses, pay your employees. Shaming the patron by flipping the screen around and being told to ‘answer a few questions’ is a non-starter,” one person commented.
Itâs not simply âcoffeeâ anymore, itâs almost everywhere.
Tipping is for full service that goes above and beyond.
Businesses, pay your employees.
Shaming the patron by flipping the screen around and being told to âanswer a few questionsâ is a non-starter.
â sonnymccurry (@sonnymccurry) July 12, 2023
How about Danny Meyer shuts the fuck up & worry about his mediocre ass burgers https://t.co/reiEnU7OOs
â mr. miller (@milezperhrs) July 10, 2023
Uber used to say you didnt have to tip either
Dont trust the billionaires. Tip your server/driver
â Ross Bybee (@GamerTex) July 10, 2023
Yet others agreed with Meyer.
“If you are just handing something to me across a counter, I won’t be tipping,” wrote Twitter user Rakesh Agarwal.
“Danny Meyer is a voice of reason in a US industry and culture that has gone way out of line,” commented Gary Whelan.
Danny Meyer is a voice of reason in a US industry and culture that has gone way out of line.
â Gary Whelan (@_GaryWhelan) July 10, 2023
In the Squawk Box episode, Meyer also explained that wages had increased as restaurants looked to rehire in significant numbers after the pandemic lull. He added that this demand for workers has also led to higher pay, making hospitality sector jobs more attractive.
“Employees are making a percentage of menu prices, which have only gone up, which means that their wages have appreciably gone up over the last year and a half or so,” he said.
Meyer further discussed the US having state laws for adjusted lower minimum wages for tipped employees.
“[It] is a shame; it should actually be the exact same thing,” he said before quickly adding that the low wage with cash perks pretty much amounts to the same in a metro like New York.
“By the time you add the hourly wage rate, plus tips, I would say that most tipped employees in a full-service fine dining restaurant are approaching somewhere between $35 to $50 an hour,” said Meyer.
Sorkin asked where Shake Shack stood on the pay scale.
“Shake Shack is in roughly half the states in the United States, and they range from very, very low amounts to much higher amounts to much higher amounts, depending on what the state is,” Meyer said.
Shake Shack is expected to make its much-awaited Canadian debut next year with a location in Toronto. Osmington Inc. and Harlo Entertainment Inc., the Toronto-based investment companies behind the project, hope to open 35 locations across Canada by 2035.
Have thoughts on tipping at fast food spots? Share them with us in the comments.