Reply to Restaurants' sneaky fees -- a guide

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”[/quote]

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that [b]if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt.[/b] Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.[/quote]Many of these places were doing OK until the DSA guilt-tripped DC residents to supporting this ridiculous new bill.  The bar and restaurant model, while odd, was working very well for a long time.  I paid my way though college working primarily for tips at an upstate NY bar.  We did serve wings so that helped.  But my point is that very few servers wanted this bill and no owners wanted it.  But communists are going to be communists and can't help themselves when it comes to things like this.[/quote]

A few things:

1) No one was tricked into voting for getting rid of the tipped wage. DC voters went to the polls TWICE to make this decision in elections where it was widely discussed. They had to do it a second time because the restaurant lobby got the council to overturn it the first time.

2) People voted for it because most people in DC are consumers. They want transparent pricing at restaurants. This was the #1 reason people voted for the bill -- because they want to know in advance how much their meal will cost, including service. Secondarily, they want to know the employees at the restaurant are being paid a fair wage because they don't want to patronize business that exploit workers. But it's mostly a selfish desire for transparent pricing.

3) Restaurants in DC made the second bill more likely to pass by engaging in the proliferation of fees during and after Covid. At first people were okay with pandemic fees that restaurants charged to help furloughed workers, pay for upgrades to facilitate outdoor dining and contactless pickup, etc. But after the vaccine, things started returning to normal and not only did the fees stick around, there were more of them. Adding service fees, or fees to pay for employee healthcare, or inflation fees. Even where these fees made logical sense, they made pricing less transparent.

4) The fees also created confusion around tipping. Lots of people were unsure how much to tip or whether to tip at all, because there was no consistency in the industry as to what the "service charge" was for or where it went. People didn't want to stiff servers, but they also didn't want to pay both a 20% service charge AND a gratuity, especially when doing so made dining out cost considerably more than they expected.

5) Restaurants in DC had an opportunity to come together between the two different ballot initiatives on the tipped wage, and settle on an industry standard with regards to tipping, service fees, and employee compensation. Not necessarily to do all the same thing, but to create transparency so people would know what it meant when they got a "Service fee" and what it covered or didn't cover, and therefor know when and how much to tip. They didn't. So consumers responded by voting for the initiative. It had nothing to do with communism or the DSA.

6) And now restaurants continue to refuse to give consumers what they want, which is transparent menu pricing, and are sticking with these fees and blaming customers for their own business failures. And, big surprise, the result is a decline in demand at restaurants and more people just saying screw it, I'll cook at home or get takeout from a fast casual restaurant where I know how much it costs, and be done with it.

It's crazy to me that industry workers and owners still cling to this idea that voters were hoodwinked. NO. Consumers want you to be clear about how much you service costs and what it covers, and you consistently refuse to do this. This is your OWN FAULT.[/quote]

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