(Image:Fuel Coffee)
A Capitol Hill coffee shop could be part of a new trend in Seattle food and drink.
The Fuel Coffee chain has announced it is re-instituting tipping at its three Seattle cafes as it tries to balance reasonable latte prices with fair compensation for its employees.
Ownership says it has been tip-free since 2020 when it instituted service charges but is bringing the practice back as they cut wages to Seattle’s upcoming $21.30 an hour minimum to counteract the soaring price of coffee beans. CORRECTION: CHS didn’t get this right. Fuel adjusted its prices in 2020 but did not institute a service charge. Sorry for the error.
“Based on our own research, along with customer and employee feedback, we’ve come to the conclusion that we would not be able to raise prices to the necessary degree needed to cover cost increases, pay our baristas a competitive wage, and still remain a viable option in the community,” Fuel said in its announcement.
Fuel says it is making the switch in a way it hopes will protect its employees, guaranteeing “that all team members will earn at least their current wages through the end of November–and if they don’t we will make up the difference.”
“We are confident this change will allow our staff to earn more than they currently are, but we will reassess and make adjustments by December 1st, 2025 if we are mistaken,” the Fuel announcement says.
The new wages began November 1st.
As the price of goods continues to inflate and facing continued increases in wages and employee costs, more Seattle service businesses may be following Fuel’s lead.
The signs of a change come a decade after the first shifts away from tipping in Seattle’s food and drink industry. CHS reported here in 2015 as Renee Erickson’s major opening of the Bateau restaurant project on E Union made a notable tipless debut.
Ten years later, Bateau has been shuttered for months as its concept is reconfigured amid a greatly changed Seattle restaurant landscape.
In 2026, the inflation-pegged Seattle minimum wage will reach $21.30.
Last year, efforts to soften the Seattle wage met with stiff opposition as District 3 representative Joy Hollingsworth backed off a proposal to permanently extend a tip credit put in place ten years ago to protect the city’s small businesses during the phase-in of the higher minimum wage tied to inflation. His office has said it remains set on leaving the tip credit behind despite some of Mayor Bruce Harrell’s comments on the campaign trail.
Meanwhile, Seattle voters are deciding this week on an overhaul of the city’s B&O tax that would exempt any business generating less than $2 million a year from the city’s B&O tax while raising the tax rate on the city’s most prosperous companies like Amazon and Starbucks. The proposal would eliminate or reduce the tax for around 90% of Seattle businesses while generating an estimated $81 million in new revenue.
Fuel, part of the Ada’s family of cafes and bookstores owned by Danielle and David Hulton, has three locations including 19th Ave E, Montlake, and Wallingford. Last year, Fuel shut down its short-lived run in the old Vivace walk-up. Tiny Bean Espresso is now doing its thing in the counter bar.
You can read more about the changes at fuelcoffeeseattle.com/tipping.
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unfortunately the simple fact that the cost of living for people working at places like this, combined with the cost of running a business here, means the $3 coffee is a thing of the past in urban seattle. I don’t like it either but hopefully folks won’t blame the messenger. tips shouldn’t be necessary but they will be until they aren’t.
Where is the $3 latte ? I think the problem is as we go over $5 I want a good quality product, and a lot of coffee in Seattle is just not that good. Also for the budget minded FRAAM down on Eastlake does a $2 double espresso. And it’s good coffee.
We should be eliminating tip culture, not encouraging it.
So how exactly should this business handle the challenges listed in this article?
Price the latte at the amount that will fully cover all its costs, including the rising cost of coffee beans (tariffs? Supply chain? Global warming?) as well as rent and worker wages. If people want the latte at that price, they will pay it. If people don’t want the latte at that price, then Fuel goes out of business. This is pretty straightforward “how to run a business.”
Well according to the article they pretty much said the latter will happen and then those workers will be out of jobs and making zero. How is that a good thing? Great idealogical win. Congrats!
Resorting to tips when payroll can’t be made? Not a sign of a healthy business.
Coffee has had the margins that allowed for people to order a drink and then idle at a table, why is it surprising that at some point this wouldn’t be profitable?
Coffee shops will go the way of the pool halls.
Agreed. I dont really see tipping as a new “trend”. People are getting sick and tired of being expected to tip for a $6 coffee (7 with the oatmilk).
Im sad to say that maybe being an exclusive coffee shop just isn’t sustainable anymore. I think their is something wrong if you rely on the customer to give employees a livable wage
No tips for counter service.
No tips for takeout.
Min wage will be over 21 next year. Replace employees with robots if they are too expensive. I’m not paying extra on top of already inflated prices for someone to hand me something and turn a screen around.
Some places expect Tips for self service. Yeah, I should tip myself
Goodweather Coffee in Chophouse Row is still tip-free coffee on the hill.
There are other benefits to businesses and jobs without tips than just the money. Stability and predictability for income. Not getting stiffed by customers. Not having to guilt-trip your customers into handing over more. Not having coworkers steal the good tables and sections. Not having to tip out the support staff. Not having a penalty for working an off-peak shift. Less paperwork at the close of shift. No disparity in tips depending on how cute the staffer is. There are so many reasons to get rid of tipping.
Yes, tip disparity is an issue but it can be largely solved by tip pooling; i.e. dividing tips equally among all employees who worked that day. That way the better-tipped staffers increase everyone’s take-home pay, not just their own. While I do favor no-tip, all-inclusive pricing, it seems to be a difficult business model to implement successfully. Unless you can quickly build a large customer base that appreciates your no-tip policy and chooses to patronize you on that basis (which a handful of places seem to have done), it puts you at a disadvantage vis-a-vis your competitors who are able to keep their menu prices lower. That’s apparently what happened here. So my question for Fuel is not “Why are you abandoning your no-tip policy?” (I get that) but rather “Is your new tipping policy as equitable as you can possibly make it?” And yes, I’m OK with tipping a buck for coffee.
isn’t that socialist?
Some people smile more, make a better impression, do the little extras, brew a better cup of coffee, and perhaps brighten your day a bit. I want these people to keep their tips, not share them with those who don’t bother to make that effort. And I have no problem tipping those who prepare my coffee.
Thank you, Glenn!
As the help, I do enjoy making a nice cup of coffee that helps pay my bills. And I do it with a genuine smile.
(I feel a recession coming on. So I like yo humble myself to the rich during these uncertain times.)
It’s funny how everybody wants to live in a vibrant city but nobody wants to pay for it. Replace baristas with robots? Fine. Why not replace coffeeshops with vacant store fronts? We can all go back to the future with a can of Folgers and a Mr Coffee. Your lonely kitchen will love its newfound utility!
My kitchen has a resident spider, thank you! Well had one, it moved off its web…
No I did not kill it…yet!
Why not charge what it costs?
I miss when we would just tip if we felt like it and not if we didn’t, and it was not a political statement or a big deal for social media.
These jobs usually are for people in their 20’s and are set aside for queers, women, and sexually ambiguous hotties dudes, like this guy at my coffee shop near my new place, off the hill. But in all seriousness, tipping is for the establishment that offers the customer services worth tipping for. If you have a bunch of grumpy, too cool, slightly hung over “artsy” employees then good luck. Lay offs are coming to an industry near all of us, and I’m scared. and my spending is changing.
Are they a book shop selling coffee or a coffee shop selling books? Maybe they need to be one or the other. I can’t imagine being a “book showcase” for people to scan bar codes with the Amazon app is making them much money at the moment. Their closest geographical competitor in the coffee realm (close to 2 of their stores) is probably Victrola on 15th. Is Victrola also unable to profitably sell cups of coffee without paying minimum wage? Because their statement seems to imply that without the “kindness of strangers” going into the tip jar they would literally be unable to price coffee at a level equivalent to other neighborhood coffee shops and their business model, such as it is, fails.
No federal taxes on tips, duh.
Time to sign up for the Trump game, eh?
I don’t understand this logic anymore:
Min wage is a living wage and tips are tax deductible yet customers still are encouraged to “tip”.
At every single business in Seattle that accepts tips, those employees will never see those tips. Never tip digitally. Never put cash in the jar. Unfortunately, If you want to tip your barista, the only way to ensure they actually ever see that money is to put it directly in their hand.
We should be discouraging tipping, not enabling it.