Restaurant Faces Heat For Implementing Large Service Charge For All Patrons Including Solo Diners

Oct 05, 2023 by apost team

Amid the tech giants and bustling streets of California's Bay Area, Pho Ha Noi, a local Vietnamese restaurant, has unexpectedly found itself at the epicenter of a debate. The spark? An unconventional service charge policy that doesn't discriminate based on party size.

The controversy began when a patron dining solo took to Reddit to share their experience. Posting as u/TRTL2k on Sept. 15, 2023, the Redditor uploaded a photo of a receipt from the Cupertino-based eatery. The receipt revealed an automatic 18% service charge, a fee typically reserved for larger groups in many establishments.

Within hours, the post became a digital wildfire, amassing thousands of clicks, shares and comments. The online community was polarized. While many expressed shock and disapproval, others voiced support, understanding the challenges faced by service industry workers. 

Tipping in the U.S. is more than just a practice; it's a deeply ingrained culture. With the federal minimum wage for tipped employees set at a meager $2.13 per hour, tips often bridge the gap to a livable wage. However, the Bay Area, known for its skyrocketing living costs, presents unique challenges to both employers and employees.  

After the Reddit post attracted over 5,000 comments, many of which criticized the eatery's service fee, Helen Nguyen, co-owner of Pho Ha Noi, chose to speak up after her business had been riddled with negative reviews. She passionately defended the restaurant's decision and explained that the service charge was a strategic move to ensure fair compensation for over 100 dedicated employees across their Bay Area locations. 

The restaurant apparently informed its customers of this change in a Yelp post in November 2022, according to Fox 11.  

Nguyen also emphasized that the fee is a lifeline. It serves to support minimum wage workers by covering essential benefits like health insurance and addressing the ever-present challenges of hiring in a region where living expenses continue to soar.

Redditor Aggressive-Variety60 wondered about the eatery's transparency, as they asked: “Was it disclosed beforehand? The menu/ price list needs to reflect the right price! Tip is at the patron’s discretion.” Many agreed that the service charge must be made known to the customers before they place their orders.

However, according to the report, regulars at the Cupertino eatery have known about the 18% service charge since last year. It's indicated in the menu and as a sign by the entrance. 

"It is disclosed beforehand," Redditor yomammaaaaa attested and wrote in the discussion. "I've been several times, and they have a sign up front, and it's in the menu as well. Not really a surprise, but I understand why it might seem sh*tty if someone didn't see either of those."

“Service charge is synonymous to Gratuity aka Tips," wrote iMadrid11. "Restaurants charging service charge isn’t actually a bad thing. As long as the restaurant doesn’t steal it away from employees."

“We are not the first to do it,” Nguyen further stated to the San Francisco Gate. “Many restaurants applied a 20% or 25% service charge a long time ago. Nobody said anything...Why are people pointing to my restaurant?”

Nguyen also clarified that as restaurant owners they want to provide better service to their customers. At the same time, they need to retain good workers who are paid well so they won’t quit their jobs. 

“Everyone works hard. I want to be fair to our workers,” she added.

apost.com

Do you think that an 18% service charge for a solo dinner is too much? Would you still eat at a restaurant provided these charges are disclosed? Do you know someone passionate about the hospitality and food service industry who might want to know about this story? Please tell them about this!