You can't do all these things with prices; prices apply universally across customers, and for the most part in the hospitality industry they can't float (see airline tickets as an example of a floating price, and the sheer loathing it creates in the customer base).
Later
I also should have added, and probably led with, the fact that tipping addresses a big agent-principal problem in hospitality: in restaurants where servers rely on tips, their incentives are strongly aligned with those of customers; without tips, virtually all the incentives are aligned with that of management.
I don't want to abolish tipping, but instead I want to raise the minimum wage, make prices transparent (I am also a proponent of including tax in price listings), and making not tipping socially acceptable. If we have to supplement wages with tips then our economic system is broken (and akin to feudalism). If you want to provide an extra reward or explicitly bribe an employee for faster/better service (or to flex your wealth), I have no qualms.
That relationship with the servers, by the way, also has a name: it's a principal-agent problem. Servers have competing incentives: to serve the interests of customers (better service) or the business (reduce ongoing costs). Tipping shifts the incentives around. You could attempt that shift with other mechanisms, like after-dinner surveys, but you know how well that'd work.
It costs time, effort, and money to provide better service, so I'm not from where you get the moral dimension of having to buy them. They have a cost; of course you have to buy them.
It's an odd industry where you perform a service, then hope your customer decides to pay you for it.
If that were true, we'd empirically be able to observe better service in countries with a tipping culture than in those without.
In my experience, that is not the case at all.
Right-leaning people like it because it creates a power dynamic. Left-leaning people like it because they delude themselves that they're helping the working class. In both cases, it boils down to paternalism, and all other reasons are rationalization.
Say you were a software contractor, would you be ok with working for a customer based only on an "expected price range" with a 4x spread, over which the customer has complete unilateral discretion, decided only after the work has been completed?
If your first instinct is "that's different", I'd like to know how.
Reinvest the savings and get rich off the stupidity of the system. Belligerence seems to be the only way to fix the system.
Why should the restaurants be any different? If I like the food and the service, I'll want to come again - the restaurant increases their earnings that way and both I and the business are happy.
The question then again comes down to how is that an incentive for the workers. The obvious answer is that their pay should be linked to the earnings of the business. The fact that it is not shows the fundamental problem with current state of capitalism, where the primary goal is to exploit the work of the workers below your financial level (as a business owner) and increase your wealth based on the ever-increasing difference between costs / wages and revenue.
The incentive of business is in conflict with incentive of workers, and the interest of customers - business will be motivated to use the workers willing to work for less, count tips towards salaries, but also use lower quality/cost ingredients etc.
A system where the worker salaries would be linked to revenue, with some nuance of course, would ensure top quality / service / products for the customers, fair reward and aligned incentives for the workers, and access to top tier employees (since they would want to work for businesses with higher revenue), happy customers and increased revenue to the business.
The answer is simple: because they choose to set these terms.
Restaurants are far from the most idiosyncratic businesses customers interact with. Buy a plane ticket sometime! Different businesses have different pricing structures.
There is no clear disclosure that you will need to pay more than the listed prices to get your food as you should.
Also, if you go to a counter service business, and the point of sale system asks you to tip, again, the terms were not set prior to engaging in the transaction.
In another comment, you write:
> You're going to have bad relationships (and experiences) with American restaurants if you make a habit of undertipping.
I classify this as the restaurant (and waiter) violating the terms. You do not get to claim your prices are low and then spring and increase on people, even if it is a “cultural” norm.
Very astute of you to mention this, though “address” and “cause” could be used interchangeably.
When I was a bartender it was always in my interest to give away free alcohol to my highest tipping customers, who generally understood that it’s customary to add 50% of the cost they would have paid to their tip for each free drink.
At a very surface level, the tipping system incentivizes employees to steal product from the business to give to customers. But the game theory gets very complicated. Sometimes this results in a great customer base that forms the core of a “social engine” that powers the popularity of a bar/restaurant and results in a win-win-win. Bar owners set various levels/thresholds/criteria for how much free sample can be given out and under what circumstances.
Tl;dr: the principal-agent problem can almost never be solved to align all parties in a system.
