Two stories about Shake Shack

1. CNBC reports,

[Shake Shack founder Danny] Meyer has long been an employee advocate, going so far as to eliminate tipping at his full-service restaurants last year in favor of compensating staff so they don’t need to rely on tips. Meyer has said this makes the restaurant experience better for customers and staff.

2. The New York Post reports,

Robots will replace humans and cash won’t be accepted at a soon-to-open Shake Shack in the East Village, reps for the popular burger chain said Monday.

The comments about employee-friendly corporate policies write themselves.

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8 Responses to Two stories about Shake Shack

  1. Mark says:

    I don’t find these contractors to each other. They don’t still have eight maids a milking to produce ice cream for their milkshakes either. Utilizing available technology, while at the same time paying your employees efficiency wages is consistent with profit maximization. (And I don’t mean to imply that profit maximization is management’s only motive for paying above-market wages to its employees.)

  2. Butler T. Reynolds says:

    It’s easy to pay workers $15/hour or more and brag about it when the market wage is $15/hour or more. What an angel.

  3. BC says:

    When I read the first blurb on eliminating tipping as an “employee friendly” policy, I thought the second one would be about Uber introducing tipping, also as a driver-friendly policy. That would have been a good example of how oppressor-oppressed frameworks are non-falsifiable. Shake Shack’s non-tipping policy can be portrayed as employee friendly when one focuses on no “need to rely on tips”. The same (previous) Uber policy of no tipping was portrayed as anti-driver because drivers weren’t able to earn tips.

    • asdf says:

      When Uber introduced tipping they didn’t lower the drivers price for driving. Maybe they will do that down the road, but as a single decision it was an immediate positive for the driver.

      In restaurants its well known they pay $3 an hour and make people rely on tips. So people see a connection between tips and lower wages.

      Tipping seems to be a way to price discriminate against consumers via getting them to pay as much as your labor costs as they are willing to tolerate.

      • Old Dude says:

        Did the waiters total compensation increase or decrease after Shake Shack eliminated tipping? If it decreased then eliminating tipping hurt the servers. If it increased then this cost was born by the customers as higher menu prices.

        This is not to say tipping is good or bad but all costs are ultimately paid by the restaurant patrons. It’s the customers who pat all the operating costs of the restaurant, labor being one. Tipping just gives the patrons more control over how individual waiters are compensated.

  4. collin says:

    Well hasn’t the economy in general moved this way in which they eliminating the labor force in general? This happened to agriculture, manufacturing and now retail/fast food.
    More airports have restaurants with ordering kiosk instead of a person because they is a limited labor force at $10 – $12/hour.

  5. paul mclellan says:

    My daughter and fiance work in the food and beverage industry. The reason for eliminating tipping is usually nothing to do with making the servers rely on tips. In an upmarket restaurant (not Shake Shack obviously) the servers do very well. If a meal is $50-100 then the server is getting $10-20 per person. The problem is that in the kitchen the cooks are not tipped and are making less than half as much. Often, to add to the complexity, the servers are all white hipster types (I exaggerate obviously) and the line cooks are all Mexican immigrants (in California, in New York I don’t really know who they are). In a TV restaurant you’ll hear a lot of English; in a real kitchen, almost the only language you hear is Spanish.

  6. Phloda says:

    But is this ‘employee advocate” paying a “living wage”? How many of his entry level people are supporting a family of four on his self-professed munificence? If they are not he will eventually be devoured by the leftists he is trying to impress. It will never be enough.

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