tighten purse strings

Why restaurants are right to levy a service charge: Tipping conventions are often discriminatory

The government statement on service charge being voluntary in India has opened up a debate about the tipping culture in the country.

In March 1984, a waitress working at a New York pizzeria was given, instead of a tip, the offer to split a lottery ticket by a policeman from a nearby precinct. She agreed, and the two picked three numbers each. The policeman ended up winning $6 million and shared the spoils with her.

This real-life incident went on to form the premise of It Could Happen to You, a 1994 film starring Nicholas Cage and Bridget Fonda.

Likewise, in popular American sitcom Friends, Jon Favreau as multi-millionaire Pete Becker gave a $20,000 dollar tip to Monica (Courtney Cox), who worked as a waitress at a diner.

It is hard to think of similar story lines in an Indian movie or television show. It’s harder still to conceive of a person earning a decent income through tips in the country, where tipping rates have traditionally been low – often a few tens or twenties, a fraction of the change tendered.

This is where the recent order by the government’s Department of Consumer Affairs assumes significance. In a statement on January 2, the department clarified that “service charge” levied by restaurants on the bill is optional and that the consumer is at liberty to pay it while dining out. Since it was deemed voluntary, “service charge” it followed, is just a tip by another name.

The order has been met with mixed responses, with diners welcoming it and restaurants strongly objecting to it.

Around the world

Social sensibilities about tipping are quite fuzzy and depend on the prevailing socio-economic-cultural milieu. A case in point is that the Condé Nast Traveler has an entire webpage dedicated to tipping around the world.

Tipping generously (around 15% of the bill) is customary in the US, where it is not uncommon to see people waiting tables to pay their way to a college degree. Perhaps, generous tipping is seen as acknowledgement of dignity of labour and a way of helping out someone in their time of need. Similar customs exist in several Western European countries.

On the other hand, in Japan and Singapore, tips can invite reactions ranging from confusion to umbrage and can even be perceived as a bribe (more on this later). Tipping is not the norm in Australia either.

The case of the US

Even in the tipping utopia that is the US, there are a lot of factors (often discriminatory ones) that influence tipping behaviour.

The research of Proffesor Michael Lynn, from the School of Hotel Administration at Cornell offers fascinating insight into this. A former bartender, busboy, and waiter, Lynn has a PhD in Social Psychology, and studies tipping behaviour. His research findings were featured on the Freakonomics blog, run by Stephen Dubner and Steven Levitt (who authored the book with the same name).

The blogpost, which includes the transcript of a radio podcast Should Tipping be Banned?, talks about the several grey areas regarding gratuity – for instance, how one must tip the the doorman or baggage handler, but not a receptionist or a flight attendant. Particularly revealing were the opinions of people tending tables. A lot of waiters said they could tell whether or not someone would be a good tipper based largely on outward appearance, like the shoes they wore and whether or not they smoked. In many cases, a smile, a friendly countenance and touch often got the waiter or waitress a bigger tip.

Lynn said that in his years of research, he had found that that the appearance of waitresses mattered more than that of than waiters; people tended to tip members of the opposite sex better; education and income levels of the customers were linked to their tipping behaviour; and factors like hair colour, size of a woman’s breasts, body type and posture played a role as well. Predictably, race, skin colour and ethnicity also affected earnings.

His study also showed that racial stereotypes cut both ways: not only did black customers leave smaller tips but also preferred to giving flat tips (a fixed amount, as opposed to a fixed percentage). They also tipped black servers much lesser than white servers for equivalent levels of service.

Perception problem

Besides, Black Americans also suffer from the perception that they are poor tippers. Anecdotal evidence suggests that Indians aboard are also held by some in the service industry to be ungenerous tippers.

Another grey area that has been examined in research is the thin line between the socially accepted “tip” and the frowned upon “bribe”. A study by Harvard Business School’s Professor Magnus Torfason, which used tipping data from 32 countries and matched it to their corruption perception index scores, found a positive link between the two.

The inter-cultural differences and roles played by socio-economic status and attitudes puts the Indian preference for a flat tip in new light. By obfuscation or sleight of hand (or both), the Indian hospitality industry managed to break the culture of poor tipping by propping up a deterrent of social awkwardness. Simply put, they found the tipping point for better tipping practice.

Vyasa Shastry is a materials engineer and a consultant, who aspires to be a polymath in the future. In his spare time, he writes about science, technology, sport and society.

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India’s urban water crisis calls for an integrated approach

We need solutions that address different aspects of the water eco-system and involve the collective participation of citizens and other stake-holders.

According to a UN report, around 1.2 billion people, or almost one fifth of the world’s population, live in areas where water is physically scarce and another 1.6 billion people, or nearly one quarter of the world’s population, face economic water shortage. They lack basic access to water. The criticality of the water situation across the world has in fact given rise to speculations over water wars becoming a distinct possibility in the future. In India the problem is compounded, given the rising population and urbanization. The Asian Development Bank has forecast that by 2030, India will have a water deficit of 50%.

Water challenges in urban India

For urban India, the situation is critical. In 2015, about 377 million Indians lived in urban areas and by 2030, the urban population is expected to rise to 590 million. Already, according to the National Sample Survey, only 47% of urban households have individual water connections and about 40% to 50% of water is reportedly lost in distribution systems due to various reasons. Further, as per the 2011 census, only 32.7% of urban Indian households are connected to a piped sewerage system.

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Pressure on water sources: Rising demand on water means rising pressure on water sources, especially in cities. In a city like Mumbai for example, 3,750 Million Litres per Day (MLD) of water, including water for commercial and industrial use, is available, whereas 4,500 MLD is needed. The primary sources of water for cities like Mumbai are lakes created by dams across rivers near the city. Distributing the available water means providing 386,971 connections to the city’s roughly 13 million residents. When distribution becomes challenging, the workaround is to tap ground water. According to a study by the Centre for Science and Environment, 48% of urban water supply in India comes from ground water. Ground water exploitation for commercial and domestic use in most cities is leading to reduction in ground water level.

Distribution and water loss issues: Distribution challenges, such as water loss due to theft, pilferage, leaky pipes and faulty meter readings, result in unequal and unregulated distribution of water. In New Delhi, for example, water distribution loss was reported to be about 40% as per a study. In Mumbai, where most residents get only 2-5 hours of water supply per day, the non-revenue water loss is about 27% of the overall water supply. This strains the municipal body’s budget and impacts the improvement of distribution infrastructure. Factors such as difficult terrain and legal issues over buildings also affect water supply to many parts. According to a study, only 5% of piped water reaches slum areas in 42 Indian cities, including New Delhi. A 2011 study also found that 95% of households in slum areas in Mumbai’s Kaula Bunder district, in some seasons, use less than the WHO-recommended minimum of 50 litres per capita per day.

Water pollution and contamination: In India, almost 400,000 children die every year of diarrhea, primarily due to contaminated water. According to a 2017 report, 630 million people in the South East Asian countries, including India, use faeces-contaminated drinking water source, becoming susceptible to a range of diseases. Industrial waste is also a major cause for water contamination, particularly antibiotic ingredients released into rivers and soils by pharma companies. A Guardian report talks about pollution from drug companies, particularly those in India and China, resulting in the creation of drug-resistant superbugs. The report cites a study which indicates that by 2050, the total death toll worldwide due to infection by drug resistant bacteria could reach 10 million people.

A holistic approach to tackling water challenges

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Recycling and harvesting: Raw sewage water which is dumped into oceans damages the coastal eco-system. Instead, this could be used as a cheaper alternative to fresh water for industrial purposes. According to a 2011 World Bank report, 13% of total freshwater withdrawal in India is for industrial use. What’s more, the industrial demand for water is expected to grow at a rate of 4.2% per year till 2025. Much of this demand can be met by recycling and treating sewage water. In Mumbai for example, 3000 MLD of sewage water is released, almost 80% of fresh water availability. This can be purified and utilised for industrial needs. An example of recycled sewage water being used for industrial purpose is the 30 MLD waste water treatment facility at Gandhinagar and Anjar in Gujarat set up by Welspun India Ltd.

Another example is the proposal by Navi Mumbai Municipal Corporation (NMMC) to recycle and reclaim sewage water treated at its existing facilities to meet the secondary purposes of both industries and residential complexes. In fact, residential complexes can similarly recycle and re-use their waste water for secondary purposes such as gardening.

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Community initiatives to supplement regular water supply: Initiatives such as community water storage and decentralised treatment facilities, including elevated water towers or reservoirs and water ATMs, based on a realistic understanding of the costs involved, can help support the city’s water distribution. Water towers or elevated reservoirs with onsite filters can also help optimise the space available for water distribution in congested cities. Water ATMs, which are automated water dispensing units that can be accessed with a smart card or an app, can ensure metered supply of safe water.

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Public awareness and use of technology: Public awareness campaigns, tax incentives for water conservation and the use of technology interfaces can also go a long way in addressing the water problem. For example, measures such as water credits can be introduced with tax benefits as incentives for efficient use and recycling of water. Similarly, government water apps, like that of the Municipal Corporation of Greater Mumbai, can be used to spread tips on water saving, report leakage or send updates on water quality.

Collaborative approach: Finally, a collaborative approach like the adoption of a public-private partnership model for water projects can help. There are already examples of best practices here. For example, in Netherlands, water companies are incorporated as private companies, with the local and national governments being majority shareholders. Involving citizens through social business models for decentralised water supply, treatment or storage installations like water ATMs, as also the appointment of water guardians who can report on various aspects of water supply and usage can help in efficient water management. Grass-root level organizations could be partnered with for programmes to spread awareness on water safety and conservation.

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This article was produced by the Scroll marketing team on behalf of BASF and not by the Scroll editorial team.