If you can afford a big tip, and social mechanisms shame you into giving it, then great! The restaurant makes a lot of profit.
If you can't, then the restaurant can still make a small profit off serving you anyway.
As for why it'd increase over time... maybe that's just an effect of people getting a bit richer, but the marginal cost of serving a meal not so much?
You could argue that, but only by ignoring practical matters of effort/level of service/value that attends a different price.
I'm 40+, and when I was in elementary school, pretty much every source I encountered was consistent with 15% as the norm, 20% as a reward for exceptional service, 10% as a signal for tolerable but substandard service, and anything lower as a signal of “abysmal service and I'm only tipping to let you know that I did not forget about the tip to avoid ambiguity.”
I pay $3600/month in rent for a studio. So you need like $120/day post-tax in order to just make rent (and 2-3x that to qualify for the lease in the first place). So let's say you need $300/day in tips to live here. (That works out to about 109.5k/year -- a respectable entry-level tech salary, but that would be just above the poverty line in SF if you were trying to support a family of four on it.)
Suppose that you have a ramen restaurant that's only open for dinner, seats 29, always has a line out the door, has a cycle time of half an hour, is open for 6 hours a night, and has three servers. Assuming 100% of seats are full (let's say you're the best ramen place in town), that means that each server will get tips from 116 customers a night on a $14 bowl of ramen. To make $300/day, you need an average $2.59 tip on the $14 bowl of ramen for the server alone (never mind any haircut for back staff/tip sharing/the owner takes some to cover fixed costs of the restaurant). $2.59/$14 works out to 18.5%.
In a world where entire apartments in the Mission cost $500/month, sure, you can tip 10% on a meal. But given market rate rents in SF now, the math of a 10% tip just doesn't add up.
That'll help a struggling service industry worker make ends meet, right?
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Realistically, odds are our hypothetical service industry worker isn't paying a market rate for a studio in the Mission. It's much more likely they're rooming with others in some fashion, and their monthly rent is at most half of $3600. And likely doing the traditional thing and under-reporting cash tip income by a non-trivial margin.
You pay higher to have waiters in the first place.
Essentially, the story of SF is the story of no high density housing.
This and delivery from a shop you order often from are the only form of tipping that makes any sort of sense whatsoever to me (at least common forms of tipping).
It's bribery so you get good service the next time. At a busy bar it's worth every dime to tip 100% that first drink and then a dollar or two after that. You will jump the 10 deep line at the bar no problem.
Same goes for food delivery - get to know the couple drivers at the local Thai place and be known as a great tipper - you'll get service above and beyond.
Any other tipping seems like it's utterly pointless as a consumer. Why tip after the fact - typically at 15-20% for merely acceptable service. Even if I'm a heavy tipper, the server has zero way to know it so I get just as good of service as anyone else.
15% - 20% is standard, and always has been, for a full service, sit down restaurant. The tip makes some sense, based on the service given to you, some level of tip being roughly commensurate with the amount of service.
But what percentage am I supposed to tip in a restaurant where I order at a counter, bus my own table, and merely have someone bring the order to my table? (FWIW, some McDonalds now do this, yet nobody would ever tip at McDonalds.) What about if they come around and fill my water? What if I order at a counter but they still bus my table?
Moreover, in many places (coffee shops, ice cream shops) there is no wait service at all, the person at the counter merely draws a coffee or scoops some ice cream, yet tips are apparently still expected. Am I really supposed to tip 15% just for someone to scoop me an ice cream cone? Which leads me to another question that has bothered me since way back in the day: Why are bartenders tipped so richly simply for pouring a drink?
15-20% has long been standard for full-service. For lesser service I don't understand why anybody would be expected to tip the same amount. Am I missing something? I gather the younger generation might not think of things in these terms, but why not?