Airlines are struggling, retail is struggling, restaurants and bars are struggling, and hey, maybe you are too. Outside of Amazon, PPE manufacturers and social media or tech giants, few businesses are thriving during the pandemic, creating hard times for many.
New York’s restaurant scene, where things have been take out, or outdoor seating only for months, has been hit worse than many.
But New York’s big plan to help the struggling restaurant and hospitality industry isn’t winning many fans with owners, or hungry patrons. The city council just passed a law allowing restaurants to add covid-19 surcharges to customers bills, which may keep more people out, than bring cash in. Will other cities latch on to the idea?
New York’s Covid-19 Restaurant Surcharge
After over 1,300 permanent restaurant and bar closures and months of pleading from leaders in the restaurant industry, New York City is now taking action to rejuvenate the struggling food industry. Unfortunately, the first big move since announcing a phased reopening of indoor seating is a controversial one.
Restaurants and bars will now be able to add a 10% surcharge to any bills in the form of a covid-19 surcharge, which makes New York dining more expensive than ever, at a time more diners than ever are struggling to make ends meet.
For visitors from outside the US, which of course mostly isn’t a thing right now anyway, people are always shocked to see tax not included in menu item prices, and even more shocked to learn that a 20% tip is by and large the new standard in the big city.
Adding a 10% surcharge on top of the already lofty 8.875% tax, and 15-20% tip means any meal is nearly 40% more than it appears when you sit down. During the pandemic, many restaurant owners made modest increases in price to cover the additional costs of doing business, while others simply kept things the same, happy to have support.
Costs of doing business are rarely guaranteed, but opportunities to get creative with take out, or meal prep kits for home created new revenue streams for many, to soften the blow of fewer diners on the premises.
According to the New York Times, the surcharges are creating division among owners at a time when the restaurant and bar industry is calling for unity. Restaurant and bar owners always have the power to raise menu prices to survive, and guests are in total control of tipping, with no limit whatsoever. There’s also nothing wrong with adding a note to each bill, asking for additional support, if possible.
For a city with already prohibitively expensive dining, many will see the 10% surcharge as a reason to finally watch that YouTube cooking video, and stay indoors. Exactly the opposite of what restaurants need. For restaurants owned by investors, or businesses there’s no guarantee that any employees would benefit from the 10%, either.
Much like raising prices, restaurants can choose whether or not to add the surcharge, but the uncertainty doesn’t help confidence in the reboot of dining. Will those that do add 10% to each meal disclose so before you sit down and eat, or will it be presented as an unwelcome surprise addition to an otherwise lovely meal?
New York’s attempt to bolster the embattled dining scene may prove to do the opposite, whether your favorite restaurant imposes the charge, or not. Like many ideas these days, it may catch on and wind up in other cities too.