Friday, February 19, 2010

Tiponomics

Mr. Pink: Uh-uh, I don't tip.
Nice Guy Eddie: You don't tip?
Mr. Pink: Nah, I don't believe in it.
Mr. Pink: I don't tip because society says I have to. All right, if someone deserves a tip, if they really put forth an effort, I'll give them something a little something extra. But this tipping automatically, it's for the birds. As far as I'm concerned, they're just doing their job.

Anyone who shares my love for Quentin Tarantino's movies will immediately be reminded of this dialogue as part of the opening sequence of Reservoir Dogs. To say that I found the concept of calculating the tip in a restaurant/bar (as a percentage of the check amount), ridiculous, would be playing it down. When I was in undergrad in India, we tipped a standard Rs. 5 on every check irrespective of the check amount. In our regular restaurant, we would tip Rs. 10. This was enough to ensure that the seven/eight of us got a table on a jam packed friday evening in the most popular restaurant across the street from campus. After moving to the United States a little less than 5 years ago, I was familiarized with the concept of tipping around 10-15% of the check amount during one of my initial escapades from the travails of graduate school. Eventually I got used to calculating the tip as 15-20% of the check amount. I remember being very proud of myself for being a "generous tipper".

This was until I started going out with another colleague of mine, Alan. Alan used to tip 40%, sometime 60%, of the check amount. This made me feel very uncomfortable. Suddenly, "I" was the cheap guy. That is obviously not a very desirable trait to possess. Especially not if you want to sustain a healthy camaraderie with your regular drinking buddies. So I just played along. Everytime I used to go out with Alan/Wojciech I let them put out the tip first so that I knew what to do. But the economics of tipping still evaded me.

Wojciech and me are now treated as regular customers in our popular neighborhood bar in College Park. Everytime we go there, we are greeted with an extra wide smile, we get the best waitress, and we get our drinks in Glasses even if everyone else is getting them in plastic cups (anyone who has ever had beer knows how much that matters). Based on our tipping style, we managed to create a "brand" for ourselves as customers. Now to sustain our brand value, we HAVE to continue to tip generously. However we do get away with the occasional stinginess!

Now all this got me to thinking! How does one come up with the tip amount? Based on my experience here, I have come up with this pattern, an algorithm, to calculate my tip amount. I now calculate the tip as a non-linear function of:

1) My regularity at the restaurant/bar.
2) The check amount.
3) The amount of time I have been sitting there.
4) The tip has to exceed a predesignated "minimum tip amount". However a higher check value can be used as an excuse for a smaller overall percentage of the check as tip. As long as it is greater than 15%.
5) The friendliness of the waitress. (Although "some" waitresses don't even have to smile)

Now the above rule is applicable to the customer. What about the waitresses? Their side of the story is also, quite obviously, driven by economics. Most waitresses get paid a fixed hourly rate. So the best working hours for the average lazy person would be the off peak hours. But any waitress who wants to make the most of the job would want to pick up the peak hours for her shift. Now this is just stating the obvious isn't it?

A not so obvious observation for me has been the appearance of the waitresses. On an average day, most waitresses dress comfortably. However on a peak night (Friday/Saturday), a LOT of effort goes into the appearance. The clothes are more appealing, the make up, more liberal and the blouses, lower cut. Now why not do this every night? Of course the comfort level and the effort that goes into dressing primmer are both good arguments. But there could also be this deeper rationale that goes into the "dressing optimization" routine. Remember, there are bonus points for friendliness. On an average day with not too many customers, they can get their bonus points simply by being more frequent in refilling your cup of coffee or your beer. Or for that matter they could simply spend that extra minute talking to you. However on a busy night, they don't have the luxury of providing that "excellent" service. They are pressed for time because of the sheer volume of customers that need to be served. So the appearance is simply used as a means of getting those highly desired bonus points for friendliness! Make sense?

Coming up next: Astrology