San Francisco, California has introduced a new law aimed at eradicating hidden service fees that are often added to restaurant bills, sparking debates among diners and industry experts.
Diners in San Francisco have long been accustomed to seeing warnings about mandatory service charges ranging from 4% to 20% on their bills. However, a proposed law targeting these fees may bring changes that could impact both customers and restaurants in the city.
Experts in the food industry, such as Marcia Gagliardi, the creator of the food newsletter tablehopper, have expressed concerns about the potential effects of the new law. Gagliardi believes that the elimination of these fees could lead to higher overall prices for customers as restaurants have to find alternative ways to cover their costs and maintain their employees.
The law, set to take effect on July 1, initially focused on eliminating hidden fees commonly seen in ticket sales. However, recent statements from the state attorney general confirmed that the law extends to cover restaurant service charges as well.
Co-sponsored by Bay Area senators Sen. Nancy Skinner and Sen. Bill Dodd, the legislation aims to regulate how companies can advertise or display costs to ensure transparency and fairness in pricing for customers.
Tom Medin, a veteran in leading food tours in San Francisco, acknowledges the potential changes in the restaurant landscape but sees an opportunity for the shift to benefit smaller, independent establishments. He believes that a focus on customer experience and community connections could help restaurants navigate the changes.
However, not all industry professionals share Medin’s optimism. Laurie Thomas, the Director of the Golden Gate Restaurant Association, expresses concerns about the impact of these changes on staff wages and customer relations. She highlights the challenges restaurants may face in adjusting their pricing models to maintain profitability and customer satisfaction.
Despite the uncertainties surrounding the new law, Gagliardi predicts that customers may still end up bearing the brunt of any price adjustments made by restaurants. As establishments navigate the evolving landscape, she anticipates potential price increases of 5% to 15%, underscoring the complexities of balancing operational costs and customer expectations.