NYC’s Sushi Yasuda Eliminates Tipping. Gratuities No Long Accepted (Updated).

American eaters, unlike their European counterparts, are accustomed to voluntarily adding 18-20% to any dinner bill to compensate the wait staff for their services. But one New York City restaurant has put an end to that. The critically-acclaimed Sushi Yasuda, a 14-year old Japanese restaurant in Midtown Manhattan, eliminated tipping last month and raised its menu prices to reflect that development, owner Scott Rosenberg tells The Price Hike.

Here’s what guests now see on menus and receipts:

“Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted. Thank you.”

Rosenberg suggests Yasuda might be the only U.S. restaurant with such a policy. He might be right. (Update: Turns out there’s at least one more.)*. A variety of ambitious American eateries like Alinea, Next, Atera and Brooklyn Fare already add automatic service charges as part of their pre-paid dining systems. But Yasuda’s move is closer to the European-style system adopted by Thomas Keller’s Per Se in 2005, where all prices are reflective of service, a policy Keller implemented to help correct the income disparity between cooks and wait staff, per this New York Times piece.

What’s different with Per Se is that there’s still a line on the receipt for additional gratuity for those who wish to leave it. “We felt that approach really didn’t make sense,” Rosenberg said. “We felt it was cumbersome and confusing.” As such, Yasuda does not have a space on its receipt for any gratuity.

“We just take tipping out of the equation,” he says.

How have customers reacted? After a bit of initial surprise among regular guests, “they don’t think twice about it,” says Rosenberg, who’s seen no change in customer volumes since the changeover. One gentleman, per Rosenberg, quipped that he’d now order 20% more sushi now that tipping is no longer required.

The restaurant’s prices, of course, are now higher than they would be otherwise so Yasuda can continue to provide employees “with a good salary,” Rosernberg says. Yasuda’s staff “has been salaried from day one“ and won’t be affected by this change, as the restaurant previously absorbed the day-to-day fluctuations from tips. Yasuda’s staff receive vacation and paid sick leave.

Here are some additional quotes from our conversation with Rosenberg:

"I’ve always dreamed…wouldn’t it be great not to have to worry about tipping? Look at your bill, make sure that it’s correct and sign the check if you’re good, and you won’t have think and calculate and do a math equation at the table."

With no tipping: "The risk is that your prices appear to be high on the menu. But if you have faith in what you’re serving, and how you’re serving it, you know that when your customers have a good meal and look at their final tally it’s going to be around the same."

"The law is uncertain on how to define ‘servers’. . .Our hosts will serve things. Our runners will do the same. How about the chefs behind the sushi bar? In addition to preparing food for people at the tables, their interaction with the people sitting at the sushi bar, one could make the case they’re more engaged and more active as servers than waiters because they’re interacting piece by piece as they put down sushi and sashimi. Are they servers? Are they not servers? The laws around tipping and how they’re divided get really convoluted and there aren’t really clear guidelines on how to tally it up."

"What our customers find is that they’re essentially paying the same, maybe a touch less, because we’re a little more conservative about how we adjusted our prices.”

With no tipping: “Your service staff, for those who want to pursue that as an ongoing career, they have stability, they become part of a family and that’s special. You have to be all in if you’re a salaried professional. It also attracts people who are more serious about being a part of that craft and being a part of that journey”

“It’s almost like when you watch a movie, you have that suspension of disbelief. You get lost in the story, and then the credits roll, the lights go up, and you’re back to reality. But in a restaurant, wouldn’t it be nice if you could get lost in the whole experience all the way through the meal, not until that last step, when you have to look at the check, do some math, do some calculation. Why not just take your check, see the number, and sign it if you’re good with it. To me, it extends the fullness of the experience a little bit more.”

Most New York waiters are hourly employees. Their pay starts at the tipped minimum of $2.25 per hour, lower than the non-tipped minimum of $7.25. It's not uncommon for waiters at high-end restaurants to earn more than kitchen staffers because of tipping, but state laws generally prohibit restaurants from distributing tips sommeliers, cooks and other employees that a customer wouldn’t expect to receive such gratuities. Restaurants can work around these regulations (which protect waiters against tip-skimming managers on salary) by levying service charges (with a disclaimer that such tips will be redistributed), or by adopting service-included pricing, as Per Se did.

*Update: An eagle-eyed tumblr reader notes that The Linkery in San Diego also does not accept tips, per this NYT Magazine story. Unlike Yasuda, however, the restaurant levies an 18% service charge at the end of the meal. Eater’s Raphael Brion points us toward Black Star Co-op in Austin, where service is built into prices and where tipping is not accepted.

Ryan Sutton is the founder and editor of The Price Hike & The Bad Deal. He can be contacted at ryanpsutton@gmail.com. He is also the New York Food Critic at Bloomberg News, where he works full time.