Danny Meyer: Tipping ‘demeaning' for workers

Tipping creating income disparity: CEO

Eliminating tips will let restaurants provide better services because higher wages will attract better workers, restaurateur Danny Meyers told CNBC on Friday.

"The tipping system is actually antithetical to creating a profession for people who really take their jobs seriously. You don't tip your doctor if they do a good job; you don't tip the airline pilot if the plane actually lands," Meyer told CNBC's "Squawk on the Street." "[Tipping] is actually a demeaning practice."

Meyer, founder of the Shake Shack chain, made his remarks two days after he announced that all restaurants under his more upscale Union Square Hospitality Group's control would do away with gratuities starting next month.

Have we reached the tipping point for restaurant tipping?

"People can't afford to go to culinary school and then take a $9, $10 or $11 [per hour] job," he said. "We're finding it almost impossible to recruit."

"We think the greatest competition in the restaurant business is to get the best talent, and if you're not the best place to work, you don't stand a good chance of staying in business."

He also said the rest of the upscale dining industry should take note before it's too late.

"If we don't do this ... we are absolutely going look at the end of fine dining as we know it."