About that service charge...

Why one brand-new restaurant (Passerine) chose to boldly implement a 20% service charge in a market (Lancaster, Pennsylvania) where few exist

How Restaurants Work is a column that explores how forward-thinking restaurants think: What’s going on, why it’s happening, and what this all means for the future of hospitality.

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By lots of measures, the restaurant labor model is very broken. Years after we asked restaurant workers to put their health and safety on the line during the worst days of the pandemic, we — diners and business owners — still haven’t managed to agree on the best method to compensate them. 

Plenty of restaurants are working for change, championing new ideas or introducing established ones to new markets. But change is, of course, hard. 

A recent Bon Appetit article, antagonistically titled “Yes, you should still tip 20 percent on top of a restaurant’s service charge,” is making the rounds — not because it explains some common extra charges (though it does), but because it contains some rather… aggressive quotes from a Los Angeles restaurateur with strong opinions. 

As the piece notes, restaurateur Avish Naran addresses his restaurant’s service charge on the menu, in the chicken wings section:

This is a reminder that we have 19% SERVICE CHARGE. I put this under the wings section, so you can fly your ass out of here if you don’t like it. 

Then there’s Naran’s quote at the end:

However a restaurant decides to structure its pay, you as the diner should trust what they’re doing. It’s insane to think you can go into dinner and walk away understanding the intricacies of running a business.

I understand the sentiment: a business owner knows what’s best for business, and it’s not a patron’s role to challenge that — we’re showing up for service and this is an implicit part of the agreement. But the whole thing feels a bit… brash, and doesn’t exactly paint service fees in the best light. 

photo courtesy of Passerine

That piece came out after I spoke to Kyle Sollenberger and Marcie Gsteiger-Cox from Passerine, a newly opened full-service restaurant in Lancaster, Pennsylvania, so I didn’t get to ask about this apparent controversy directly. But we did talk through the benefits of a service charge, especially while opening a new restaurant. Sollenberger is Passerine’s owner, Gsteiger-Cox championed its labor structure in her role as opening service and wine director. She developed Passerine’s model, pulling from deep industry understanding and years of experience in larger markets.

Passerine is an all-day cafe featuring products from regional producers, currently open Thursday through Monday. It opened with a 20 percent service charge, which Gsteiger-Cox told me was directly tied to equitable compensation for every hourly employee. It’s also among the first restaurants in its area to implement such a charge, a challenge in itself, given that it requires customers to get on board with a new idea. 

It’s only been a couple of weeks, but it seems to be working, largely because the team talks about it, a lot.

“It’s always an impactful conversation, and one that I’ve been having increasingly with both staff and guests — the fact that everyone, even our dishwashers even get the exact same take-home of that pot that everyone else does,” Gsteiger-Cox told me. “Getting that dish clean to come back to the kitchen to get food put on it so it can go out is absolutely one of the most crucial steps of this process. But they’re the least visible on a service floor and so often the ones completely taken advantage of, monetarily.”

Here’s more about how and why they chose to implement a service charge, and how it’s going so far. 

Our conversation has been lightly edited for length and clarity.