JOE'S CRAB SHACK WANTED TO ATTEMPT EXPERIMENTING WITH
TIPPING TO SEE IF THEY COULD GET RID OF THE WHOLE TIPPING MODEL
OF PAYING THEIR WAITERS AND WAITRESSES, WOULD THEIR
CUSTOMERS RESPOND FAVORABLY.
IT TURNS OUT THAT OUT OF THE 18 RESTAURANTS THAT HAVE
EXPERIMENTED WITH THIS, ONLY FOUR WILL CONTINUE TO DO SO.
IT'S INTERESTING.
ONLY FOUR OF THEM WILL CONTINUE ON WITH THIS EXPERIMENT.
ALL THE OTHER RESTAURANTS THAT DID SO GOT SUCH A TERRIBLE
RESPONSE FROM THEIR CUSTOMERS THAT THEY DIDN'T WANT TO
KEEP MESSING WITH IT.
HERE IS WHAT THEY DID, THEY INCREASE THE PRICES TO
THEIR MENU ITEMS, BUT THEY DID AWAY WITH THE TIP COMPLETELY.
THE WHOLE POINT WAS TO PAY THE WAITERS AND WAITRESSES A
MINIMUM WAGE, I AM NOT SURE WHAT IT WAS, SO THEY WOULDN'T
RELY ON TIPPING.
>> SUPER INTERESTING.
I WOULD'VE THOUGHT THAT THIS
EXPERIMENT WORKED.
I GUESSED WRONG.
I AM SURE SOME PEOPLE WOULD SAY ñ I THINK MORE THAN THAT IT
IS THAT PEOPLE LIKE THINGS THE OLD WAY.
THE SECOND PART IS THE MORE INTERESTING ONE.
THEY DIDN'T TRUST MANAGEMENT.
THAT IS SOMETHING THAT HAS TAKEN HOLD IN AMERICA.
IT IS UNFORTUNATE THAT IT IS THE REALITY, BUT THEY ARE RIGHT.
IT NEVER GETS ACKNOWLEDGED IN THE MAINSTREAM PRESS.
AMERICANS HAVE GROWN DISTRUSTFUL OF ALL THE PEOPLE IN POWER.
WHY?
BECAUSE THEY HAVE HAD BAD EXPERIENCES WITH PEOPLE IN
POWER.
OUR NATURAL REACTION IS TO SAY BULLSHIT, I DON'T BELIEVE YOU.
THE BOTTOM LINE IS, ONCE THAT
HAPPENS THEY LOST 10%
OF THE CUSTOMERS, THAT IS A BIG NUMBER.
THEIR COSTS WENT UP.
THEY GOT HIT WITH A DOUBLE WHAMMY.
>>PART OF THE REASON WHY THAT HAPPENED IS BECAUSE THEY
OPENED UP A BUNCH OF NEW RESTAURANTS.
THAT PLAYED A FACTOR IN THEIR INCREASED SPENDING.
I DON'T THINK THE CUSTOMERS WERE WRONG IN DISTRUSTING MANAGEMENT.
ESPECIALLY WHEN YOU CONSIDER THEIR BUSINESS MODEL.
CRAB SHACK HAS A BOARD OF INVESTORS.
WHENEVER YOU HAVE THAT SITUATION IT IS YOUR NUMBER ONE
INCENTIVE TO LOOK OUT FOR YOUR
PROFIT MOTIVE.
THAT MIGHT INCLUDE CUTTING WAGES, OR
NOT LOOKING OUT FOR YOUR WAITERS AND WAITRESSES.
>>YOU ARE JUST ONE OF THOSE JADED AMERICANS, ANA.
>> MAYBE.
>>I THINK TIPPING INTRODUCES A NEEDLESS STRESS ELEMENT.
I LOVE THE EXPERIMENT.
AND IN FOUR RESTAURANTS IT DID WORK.
IN THE OTHER 14 IT DIDN'T, THAT IS WHY THEY CHANGED IT.
THEIR LABOR COSTS WENT UP.
IT MEANS IF YOU TAKE AWAY TIPPING, THE WAITERS AND
WAITRESSES GET PAID BETTER.
THAT IS JUST THIS ONE COMPANY WITH THIS ONE EXPERIMENT.
PART OF THE REASON THEY ARE UNWINDING IT IS YES THAT
THEY LOST CUSTOMERS, BUT THEY HAD TO PAY THEIR STAFF MORE
THAN THEY EXPECTED.
THEY DIDN'T LIKE THAT.
THAT IS WHY I AM AGAINST TIPPING BECAUSE IT TURNS OUT
TIPPING DEPRESSES YOUR WAGES AND STRESSES OUT THE CUSTOMERS.
>>THERE COULD ALSO BE A FLAW IN THE STUDY.
THEY INCREASE THE PRICE OF THE FOOD, SO CUSTOMERS COULD BE
ANNOYED BY THAT.
>>BECAUSE
THEY ARE IRRATIONALLY THINKING THE FOOD IS HIGHER COST.
YEAH, BUT YOU ARE NOT TIPPING.
PEOPLE ARE IRRATIONAL ALL THE TIME.
>> I DON'T KNOW WHETHER OR NOT THESE CUSTOMERS KNEW THE
PRICE WENT UP OF THE FOOD.
I JUST FEEL LIKE IF THEY DO KNOW THE PRICE WENT UP, THEY
WILL IRRATIONALLY THINK ñ
>> THERE ARE A BUNCH OF REASONS WHY IT DIDN'T WORK OUT.
I AM CURIOUS TO SEE HOW THOSE FOUR OTHER RESTAURANTS PLAY OUT.
I WOULD ENCOURAGE MORE PEOPLE TO EXPERIMENT AROUND WITH IT.
MAYBE I AM JUST A WEIRDO WHO GETS NEEDLESSLY STRESSED
OUT BY HOW MUCH I SHOULD TIP PEOPLE.
I AM WILLING TO PAY, JUST DON'T MAKE ME JUDGE THIS PERSON.
DON'T MAKE ME MAKE THAT DECISION.