Thanks for reading, Tom. I haven’t been to Europe in a few years, but I’ve heard similar characterizations, though they’re balanced by the excellent service in Asian countries that don’t accept tips (Japan especially). I’d love to see some sort of data on this but haven’t found anything.

In general my suspicion is that it’s a cultural quirk. If Germans wanted better service, the market would reward it. In the US, it’s an attribute commonly mentioned in online reviews, so there’s motivation for management to reward high-performing servers outside of tips (which are nearly uncorrelated to service quality). In Amsterdam too I’d guess there’s at least some tip discrimination like seen in the taxi study, so minimizing its prevalence minimizes bias.

For now I look forward to greater availability of tip-free restaurants so that consumers can help decide the best system. Tax law still makes tipping preferable for business, but ultimately I’m optimistic the other benefits of tip-free will prevail.

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Co-founder & CEO of PolicyEngine. Founder & president of the UBI Center. Economist. Alum of UC Berkeley & MIT. YIMBY. CCLer. Former Google data scientist.

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Max Ghenis

Max Ghenis

Co-founder & CEO of PolicyEngine. Founder & president of the UBI Center. Economist. Alum of UC Berkeley & MIT. YIMBY. CCLer. Former Google data scientist.

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