GARCIA: Now, this does not seem rational because customers will pay the exact same overall amount in those two restaurants. But Michael says that's just how customers often decide which restaurants they like better. In one of his recent papers, Michael looked at Joe's Crab Shack, a chain restaurant. Twelve of the restaurants in the Joe's Crab Shack chain got rid of tipping for a while and raised their menu prices to make up for it so they could still pay their servers just as much. And then most of those restaurants eventually had to go back to tipping.
LYNN: I was able to download Yelp and other online ratings of Joe's Crab Shacks by location. And what we observed is that when they eliminated tipping, their online ratings went down. And when they got - brought tipping back, their online ratings went up.
VANEK SMITH: Michael says these findings are consistent with other research. And so you can see why restaurants find it so hard to end tipping and to raise their menu prices. They don't want to lose business to other restaurants that continue to allow tipping.
GARCIA: Yeah. And Michael says he did find one exception to this rule. But that exception is just high-end restaurants - restaurants that are already expensive and where the customers just aren't as sensitive to those higher menu prices. They were planning to spend a lot of money at these restaurants anyways, so they may not even notice that their $50 steak is now $60 or whatever.
VANEK SMITH: But we also wanted to ask Michael about tipping as a social convention because that, of course, is part of tipping, too. And, you know, is this convention as horrible as Anu, our listener, thinks it is? So let's start with this. Tipping seems to be designed to reward good service. So the better the service, you know, the higher the tip. But is that what happens in real life? GARCIA: Michael says, no, not...
VANEK SMITH: No.
GARCIA: ...Really. Only a tiny amount of the tip is actually related to the quality of the service. In fact, the amount is so small, Michael says, that in one survey, only about half of waiters and waitresses themselves thought their tips were related to their service.
VANEK SMITH: Most of the average tip, Michael says, is just determined by the social expectation that people feel to behave in a certain way. Everyone else leaves, you know, a 15 to 20 percent tip, so you leave a 15 to 20 percent tip. That is just the way we do things.
GARCIA: Plus, you don't want to, like, feel guilty...
VANEK SMITH: No, I know. GARCIA: ...If you know that a server's going to be - that a server's income is based on the tip. You don't want to be the jerk who just doesn't leave the right tip.
VANEK SMITH: I know. But, you know, as Anu hints in her question, there are other things that are really troubling about the way tipping works in the real world.
LYNN: I found that waitresses who rated themselves as more attractive got better tips. Blonde waitresses got better tips than brunettes. Slender waitresses got better tips. And waitresses with larger breasts got larger tips.
VANEK SMITH: Oh, America.
GARCIA: Yeah, that's depressing.
GARCIA: And we can now turn to Anu's final question, which is, if restaurants don't have an incentive to end tipping themselves, what could possibly end it? One possibility, Michael says, is through the courts. And here, it's kind of complicated. But he says that tipping seems like a neutral practice. But if it does have the effect, for example, of paying black servers less than white servers, then maybe it could be declared unlawful by courts because of its discriminatory nature. VANEK SMITH: Michael says he's spoken to a lot of labor and employment lawyers about this possibility. For now, he says, it seems like a longshot, both because it's not clear whether that argument would work in court and also because, he says, there just need to be more studies on this racial gap issue to confirm that it does exist, also, to determine how big it is and what might be causing it. GARCIA: Yeah. And the other possible way to end tipping that some people have proposed is just for the law to stop allowing restaurants and other businesses to legally pay their tipped workers less than the minimum wage. And, in fact, some states have done that.