The American menu price structure is completely false, but we've been taught to believe that it's real.

That is Danny Meyer.

And what's happened is that every menu price you see obviously includes every single thing except paying your server.

Meyer is one of the most successful restriatures of his generation.

And so we have been conditioned after many, many years as consumers to believe that the $25 chicken entree is $25.

And then when we add the tip we truly feel like it came out of a different pocket.

And we don't put that calculus into it.

Meyer does not like this chew pocket idea.

And so we're now asking people to shift that long-held thinking and to take it out of one pocket.

It's the same math but it's a very different emotional calculus.

Today on Freakonomics Radio, remaking the restaurant business model from the inside out because it needs remaking.

We were actually co-conspirators in a system that was completely unsustainable.

And the restaurant business is already hard enough.

Restaurants don't make a lot of money.

There's a lot of expenses that I think people overlook when they think about how restaurants actually operate.

Things get even harder when you can't find enough chefs to work for the going rate.

We were about 14 cook short in the kitchen which is about 50% of our staff.

Because if you want to make good money working in a restaurant, wouldn't you rather work in the dining room getting those fat tips?

I think somewhere in the realm of $4,000 a week before taxes.

So what happens when you eliminate tipping?

They'll say, so I don't tip then, right?

I'm like, absolutely, it's all taken care of possibilities included.

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