Even before the coronavirus pandemic, trouble was brewing in the restaurant industry. The minimum wage was rising quickly, but most urban eateries were already having trouble attracting talent even when paying well above the legal minimum. And the wage gap between tipped and non-tipped employees was growing, in part because the minimum wage for tipped employees is required by law to increase at the same rate as that of non-tipped employees.
Some restaurants were adapting by adding a service fee paid directly to back-of-house employees; a very few abolished tipping altogether and went with a flat fee that would be distributed among all employees.
But then the pandemic hit, and restaurants closed their dining rooms to protect customers and staff. And when they began reopening, it was at 50 percent capacity by law. Small restaurants, such as Restaurant Olivia, which just opened in January at 290 Downing Street, have been forced to figure out how to make money while serving only a handful of customers each night.
Olivia's owners, Heather Morrison, Ty Leon and Austin Carson, have been serving takeout dinners and hosting regular online wine tastings and other live-streaming food-and-beverage events to provide a little extra experience to their customers eating at home, but they knew reopening the dining room would require even more creativity and flexibility.
The Italian restaurant only has about a dozen tables, and with social distancing rules in place, that number has been cut down to five. So the owners are implementing some big changes, at least temporarily. The first is prepaid reservations through the Tock reservation app. "It's a commitment that's similar to tickets to a ballgame or concert," Carson explains, adding that with such limited seating, there's no way for the restaurant to absorb the cost of the 15 percent no-show and cancellation rate that was the industry standard before the pandemic. Seatings will also be limited to two hours per group.
Wrapped up in the reservation system is the concept of dynamic pricing that fluctuates by time and day. Dinner at the most desirable time slots, such as 7 p.m. on a Friday, will cost more than the same meal at 5 p.m. on a Wednesday. "At its root, it's kind of like a fancified happy hour," Carson points out. Not only will this allow the restaurant to optimize its seating schedule (since it can't simply pack more people into the dining room during high-demand times), but it will give diners a discount for choosing times that are typically slower.
The other big change is the switch to prix fixe dinners, with a four-course option priced at $70 to $90 per person and a six-course dinner priced at $95 to $115. Optional wine flights can be added, and other drinks can be ordered à la carte. The prix fixe system will allow the restaurant to closely control food costs and reduce waste while giving guests a broader taste of chef Ty Leon's cooking, which will include seasonal dishes like ramp farfalle as well as returning favorites such as pork Milanese.
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Since taking over the restaurant last summer (they ran it as the old Cafe Marmotte until the end of 2019 before switching over to Olivia), Morrison, Carson and Leon have been considering ways to equalize the wage gap between front- and back-of-house positions. With the new pre-paid reservation system, all service fees are included, so there's no tipping. "If the tipping system as we know it hadn't existed and someone came to you and said, 'This is the way we're going to do it,' you'd say it was a really dumb idea," Carson states. "It takes advantage of gender and race inequality and is built on exploitation. The talented people you want to build your business around and promote are de-incentivized to move up."
The co-owner adds that the whole team is returning from the three-month shutdown, and that his goal is that no one will make less money than they did under the standard tipping system. "I find a great deal of nobility in what we do; a career in service should be possible without having to rely on tips," he says.
Will the changes be too much for diners to absorb all at once? Carson is banking on his team's commitment to hospitality and the continued effort from Leon to create an excellent dining experience. Plus, he says, it's the right thing to do. "I have a great deal of conviction that what we're doing is the right thing ethically and for the future of the restaurant, but I'd be lying if I said I'm totally confident it will all work," he says.
Some of Leon's family-style takeout options will continue to be available from noon to 9 p.m. nightly, so you can order those through Tock, and reservations are now being accepted in the system for in-house dining beginning Thursday, June 18. You can also call the restaurant at 303-999-0395 for reservations and takeout orders, and you can ask about accommodations for dietary restrictions and alternative seating arrangements.