Danny Meyer, Founder of Shake Shack, Shares Insights on Tipping Etiquette

Restaurateur Danny Meyer believes that tipping is unnecessary for takeout orders or coffee purchases.

“If it’s simply a transaction where I give you money and you give me coffee, there’s no obligation to tip,” Meyer stated during an interview on CNBC’s “Squawk Box”.

Meyer is the founder of Shake Shack and serves as its board chairman. Last year, the burger chain introduced tipping in its restaurants. He is also the founder of Union Square Hospitality Group, which primarily operates full-service restaurants such as Union Square Cafe, Gramercy Tavern, and fast-casual chain Daily Provisions.

With the increasing adoption of Square’s and Toast’s point-of-sale systems, customers have become accustomed to being prompted to tip when paying. However, some customers feel overcharged or confused about the appropriate tip amount.

Advocacy groups like One Fair Wage are pushing to eliminate the tipped wage system at full-service restaurants. Opponents argue that tipping leads to unstable incomes for servers and contributes to sexual harassment and racial discrimination.

President Joe Biden vowed to end the tipped wage during his 2020 campaign. Several states, including California, have already banned this pay structure.

Meyer has had a complex relationship with tipping. In 2015, he announced that his restaurants would no longer accept tips in an effort to reduce income disparities between servers and cooks. However, during the Covid pandemic, many of Meyer’s restaurants reversed this decision when they reopened.

“It was inhumane to deny our servers the ability to accept expressions of gratitude,” Meyer explained.