It seems that gratuity is necessarly accepted across most resturants as a way to pass along labor costs to the consumer. Would this be considered collusion?
Gratuity is optional. McDonald’s doesn’t ask for gratuity.
very true, i should refine and say. Gratuity as it applies to large parties at seated resturants
It is an interesting point for sure.
I agree that they are optional, however McDonalds is not necessarily the same as a sitdown meal that requires wait and bus staff.
I am less certain that paying a gratuity is the passing on of labor costs by a restaurant. Gratuity at a restaurant seems more like a fee for services rendered, that has no fixed price. You evaluate the quality of the service you receive and you pay according to your own value scale.
Fixed gratuity for a certain party size is another question. If you have a group of six and you are dinged 18%, do you cough up another 2%? Does it have the same effect as a price control?
I don’t see why it would be.
It seems that individuals, in some form, would demand restaurants (the seated, served kind) without fixed gratuity. Yet, either the demand is weak, or there is some form collusion
A lot of people base their gratuity on the quality of service they receive. This gives an incentive for waiters to do a great job.
they are colluding, they are all out to get you, be scared!!!
not really
yes, but what of fixed gratuity (lets call optional gratuity a tip)
The customer agrees to pay the gratuity before ordering.
True, there is no force. Yet, there is no force in any collusion. By definition all services face a downward sloping demand curve. Yet, aside from the various substitutes (like grocery shopping or eating at fast food restaurants), is there not a slight form of collusion amongst these restaurants. For example, if nearly all train companies charged the same additional fee would we not label it collusion (even if there are other traveling options)?
I’m merely inquiring not claiming
No. A similar price can also be the result of competition driving the price down to near equivalent levels across the board for a similar enough good.
yet, is it a similar price? It is a percentage of total bill
Then why would it be evidence of collusion? The fact that the % is fixed means nothing and is not “collusion” as the actual price paid will differ from restaurant to restaurant, perhaps hugely if the restaurants differ in quality a lot.
Only if they agreed to. Anyway, but restaurants don’t charge the same in gratuity.
Travel. When I went overseas, I tried to tip, and in some places, people wouldn’t accept it. It’s a matter of social and economic convention, not collusion.
Btw, who do you think pays labour costs? It is always the consumer.
The let us view it as a nearly similar percentage increase in profit margins.
Then what I said earlier on competition applies again.
True, collusion need not be international? It could be domestic or regional
It just seems odd that nearly all sit&serve resturants have passed along nearly identical percentage increases in the fixed prices of meals.