Tipping culture isn’t transparent, says a Toronto restaurant owner on a mission to transform the system in ways that will benefit both staff and patrons.
Jerry Zhang has owned Florette, a trendy restaurant and cocktail bar on Queen Street West, since 2022. With years of experience in the hospitality industry prior to running his current business, he says he faced many challenges with establishing tipping practices that would be favourable to his employees. That was until he introduced Atlas into the workplace, a neutral third-party platform to ensure all tips are fairly distributed among his team.
Through Atlas, tip division is automated and distribution is simplified by depositing funds directly into employee’s bank accounts. The technology is a stark contrast in comparison to the age-old methods of tipping which involved plenty of hands-on administrative work. Zhang says the system not only makes it easier to disburse tips to staff without the manual labour, but the impartiality of Atlas also brings more transparency between him and his employees.
“I don’t have any decision power on the tips at all,” Zhang explained to Now Toronto on Thursday.
“Having that third party that is an independent body, something that it sits in between us, that just creates even an additional layer of trust.”
CEO of Atlas, Afshin Mousavian, says tipping is a necessity that has become “broken” over the years due to gaps in the lack of understanding from customers on how tips work, how businesses communicate tip distribution to employees, and how much is actually understood by employees.
Read More
“It’s important to recognize that in hospitality, service workers heavily rely on tipping, and the reason for that is because the amount of wages that the business can afford to pay them is not sufficient to have a living, to have a minimum living wage,” Mousavian explained.
“So, tips are not an option in hospitality. They’re actually very much needed in a necessity for the proper function of the businesses, living wage for the employees and the experience that the customers are expecting.”
Ninety-one per cent of Canadian hospitality workers are calling for more transparency in tipping practices, Mousavian says, caused by the difficulties in administrative practices to manage fair tips. He says Atlas helps to address this issue, while also easing the frustration of consumers unsure of where their tips are going.
“Seventy-seven per cent of Canadians are very comfortable tipping in hospitality. But when they do tip, they want to know: do these tips go to the employees, or do they go to the business,” he said.
“This level of transparency actually is needed to bring more comfort to the customer who wants to leave the tip, the employer who wants to accept tipping for his employees and the employees who are receiving the tips.”
Since implementing Atlas at Florette, Zhang describes the responses from staff as “overwhelmingly positive.”
“When tips are being distributed manually… it cannot possibly always happen at the exact same time when you’re distributing a large amount of tips to a large number of employees,” Zhang explained.
“But with Atlas… employees can expect when the tips are going to arrive. They can log into a portal to see all that sort of information, and that increases the trust, that increases the morale, the teamwork and just makes everyone feel like they’re part of shared success. And, I think that translates into the guest experience.”
Zhang hopes moving forward in the hospitality industry, other restaurants will choose to break traditional customs and instead adopt refined tipping systems like Atlas, something he feels that is long overdue in Toronto.
“If you want to operate your business fairly, you’re going through a lot of work. There’s a lot of administrative work, there’s a lot of reporting work that you need to do. Atlas just takes that off your hands and makes it easier to operate with integrity,” he said.
“It might feel like a big change, but the benefits in terms of morale, trust and efficiency just far outweigh any perceived challenges at the beginning.”
