(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.
They said “coffee” not “latte”. Seems pedantic but isn’t! Black coffee typically costs at least 2 bucks less than anything with “latte” in the title–and it’s impossible to find even that for under $4 anymore.
It’s simply an expensive product, there’s really not any getting around that.
I know where to get a cup of coffee for $1 🤫
Do tell.
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!
Did you read it? Those points were addressed.
I don’t like it either, and still prioritize tip-free places, but can’t deny that they’re completely right about the sticker shock thing.
When we debated the merits of the “Sawant $15 NOW!” initiative back in ye olde days, the comment section of this very blog were rife with people trying to state that small business owners were all filthy rich, with boats and mansions, and could clearly afford the burden of a “living wage”. Since then, we approved the starting wage of $15, which was a rounded number roughly tied to academic studies determining a livable wage in this city (not including tips). In this legislation, we had accounting for tips, so the guarantee was that this was the bare minimum. If you made $3/hr (What tipped worker doesn’t? Answer: few) in tips, you’d cost the business less, and likely make far more, after you tack on the rest of your tips. You won’t get inflation, they said. Do not think, for a minute, that the inflation you’ve seen in the last 2 years, entirely explains the price bloat in this town. As a direct result of this policy, our services have become one of the most expensive in the country (not far from number one).
Since the minimum wage lift, we’ve eliminated the tip adjustment (eat dick, rich small business owners), and we have watched dozens of small, local food industry establishments die. Many of these were part of the mosaic of culture that this city once boasted as a reason to be here. The food and drink culture here has been a foundation for artists and musicians, for those in between careers, non-committing types. I lament the absence of this culture. No, it does not exist like it used to. I moved here in 2000 in my 20s, and spent the last 2 decades earning tips in this environment, and I can say that we have let perfect be the enemy of good. We have let mission creep obscure the view, and we’ve set the table for only the most expensive and the food chains to survive. The cost of this minimum wage lift, and the removal of the tipped income adjustment, have directly increased the cost of goods for everyone. Do tech workers care? Nope. I see it at my work. Do those of us making minimum wage plus tips? Absolutely. I used to sit at coffee shops on my day off, sipping, smoking, meeting other creatives, discussing ideas. This is the whole purpose of a coffee shop, but we’ve let our stubborn anger crush the availability of these kinds of places.
So Seattle, you get your $6 coffees, and your $50 mediocre dinners. Enjoy your $20 cocktails. And to the techies that have distorted the value of the dollar, I hope you know that “move fast, break things” has definitely broken things. I’m done with this city. Goodbye, and good riddance.
Raise prices
I don’t forsee that going over any better than the tipping strategy they are now going to be trying. People are perhaps more price sensitive than ever nowadays. Higher prices will be noticed, and they won’t be taken lightly. There are plenty of videos on social media of people complaining about items, meals, drinks, stores, and restaurants that they feel are overpriced, and the impact of those videos cannot be overstated. Traffic at fast food restaurants hasn’t fallen off for nothing. I would hate for the same thing to start happening at finer establishments like this one.
Go out of biz, or pivot the biz model
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
Oh please. It’s $6+ because business owners need to pay the nation’s highest labor cost.
That is a factor that can’t be ignored. Seattle’s minimum wage is high, and it doesn’t come without cost. It is at least a wage that is somewhat liveable, unlike the $7.25 an hour minimum that our neighbors in Idaho still have to contend with.
Sadly, if the tarriffs on coffee aren’t reduced or eliminated soon, I fear you may be right. Seattle loves its coffee, but that could change quickly if the price becomes too great.
We who, and why? “Should”? Tell me you haven’t balanced a P&L without telling me you haven’t balanced a P&L.
Here, here!
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
Just be cause the screen pops up asking about tips doesn’t mean they’re “expected”, to be clear…
If you have to do the work yourself, you should get a discount. You shouldn’t be asked to leave a tip. Thats downright greedy!
Didn’t expect this from you, but now I guess we can be sure you work in tech.
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.)
Maybe think about it this way, Glenn: Let’s say the barista who smiles more, makes a better impression, brightens your day, etc., is a person of color, or someone older or less attractive in appearance. You, personally, may appreciate their efforts and tip them extra-generously but a lot of people won’t, meaning this person might still do better with tip pooling than without. I hope that helps illustrate my point.
The problem with shared tips vs. everyone for themselves tips.
In traditional restaurants(Boomer era). The back of house gets zero tips. Each server keeps what they get.
Shared tips everyone shares in the pot. Back of house too.
Meaning servers make much less. Also? If you are particularly good looking? You make more in tips. That seems unfair. But neither is Heidi Klum. That body just don’t care.
So “Hooters” waitresses make more at Hooters than a diner. Or coffee house. It’s just how it works. Ask Bikini Barista’s. They make bank. $20 tip on an 8 buck coffee. More sometimes. Why? “It’s customary” Just like tipping everywhere else. Not tipping is customary in some parts of the world.
So people will avoid shared tips or gravitate depending on their jobs. A chef/back of house would work at a shared venue.
It does make things interesting based on economics alone. I think both concepts have a place. Customers can choose.
Dipping disparity is real. But sex sales even in coffee. The hottie with the blue hair and tattoos in a crop top, slightly always hungover usually gets the high volume shifts. Or the music aficionado
☕️👨🎨 “I’m a big fan of Allegory and the Muffins, they opened for THE THE at Mo bar once, now they are sort of just doing their own thing. I just saw them again in Portland last week. Speaking of… I need to get next Saturday off Ween is gonna be at the white water amphitheater.”
👨🏿🎤 “ umm… it’s Gaga or nothing for me, thanks for my latte… sorry to hear about the B&O tax and Katie Wilson”
If only sex didn’t sell as much as it does. Perhaps then our tipping disparities would be less than they are now.
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!
There have been vibrant cities all over the world for centuries that no one had to pay for
good idea let’s become a centuries-old city no one ever paid for
Even the price of canned coffee is going up. Some sizes and varieties of Folgers are topping the $20 mark at some stores.
Who the hell can even run a business in this city in a couple years. Seattle is a rip off. Go to NYC or LA and the prices are the same as here or lower. This city is lucky it’s the only bigger city in the state because it’s shooting itself in the foot with all its failed polices coming to fruition during the worst time.
Why not charge what it costs?
did u read the article? this was literally directly answered by the business, lmao
Bogus answer.
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.
Yes!!!
you can still do this… no one is stopping you
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.
Perhaps they should increase the price of their books slightly instead of implementing this tipping strategy? While people are very price sensitive these days, the recent comeback of Barnes and Noble leads me to believe that people are more willing to pay a prenimum price for good literature than they are for good coffee.
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”.
It’s an unending cycle that is destroying this city.
By this logic, no establishment in Seattle should be asking customers to tip. That being said, if customers want to tip, they should be free to do so at their own will, with no nudging or unwanted encouragement from the business to do so.
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.
what are you talking about…? this is simply not true.
You are high. I am the recipient of digital tips and have been for decades. Go to bed.
Even if you do that, does it really stay in their hand once you leave? There are establishments where all tips are collected and split evenly among staff. Are tips that are put directly into a barista’s hand exempt from this?
We should be discouraging tipping, not enabling it.
Fairly certain you already said this.
Coffee stands are a waste of money. I could care less about it
we couldn’t care less about your opinion on the matter then mr campo
Who we? Are you the leader of a pack or something?
We see your cardboard sign and keep driving.
Who we? Who is in the car with you?
Maybe it’s time for everyone to eat at home, drink coffee at home, etc and let these businesses go they way of the dinosaur if the only way to sustain them is by paying extremely high prices (or high prices plus tips).
This isn’t really much fun anymore.
I remember going to Sambos and bottomless coffee was a dime.
If only a coffee shop would offer deeply discounted coffee as a promotional offer. It would be a great way to thank loyal customers for their business and an incentive for potential new customers to give them a try.
I don’t mind tipping for coffee, especially since I enjoy cafe ambience and typically plan to occupy a table for an hour or two. It’s not simply an addictive beverage to purchase for a fair price. For a basic caffeine fix in a hurry I’ve always made my own coffee at home for cheap, and cafes are still special time.
As much as I don’t like tipping, I can see the value in doing so in scenarios like yours, especially if it gets you free or discounted refills.
I am so done with tipping gone crazy. The expectation to tip over 20% has got to the point it just isn’t worth it. $7 before tax on Mocha, then 20%?! WTF?! Then I’ve heard servers believing they deserve 30%. My tip shouldn’t be what keeps you afloat from bad life decisions. Simple answer, just don’t go out for meals. Bought an espresso machine. Over 4 years I’ve saved over 5.5k.
Impressive savings!