Tipping DM in Coz?

[George Monnat Jr]

You're telling me that the owners are cheating the customers by using "fake" lower than expected prices, because there will be the tips, dumping the pressure on the workers that are the solely individuals that will suffer a loss in case there will be no tip at all?
Great... that's even worse, and a ****** way to run a business and another reason to not give any tip when you smell a situation like this.
Stop finding excuses and justification: apply the real prices, don't cheating the customers, but especially stop abusing of your workers. This is the only correct way to run a business.

I have been discussing real prices and market forces. What are the 'real' prices in your opinion? Do you have any evidence that anyone is inflating prices and underpaying employees? If you say yes, then 100% of the dive shops in Cozumel are in on it. Because if only one shop uses 'real' prices and pays their employees correctly, then the customers and DMs will all flock to that shop causing the others to go out of business. Are you saying there's a Cozumel SCUBA trust controlling the market? You definitely should go there and open your own shop!

Edit: Let me use some made-up numbers as an example for two dive shops in the same city/location:

Dive Shop A and Dive Shop B have equivalent costs for lease, electricity, water, waste, shop equipment (incl. compressor), rental gear purchases, rental gear maintenance, labor, etc. Both of them pay their DMs with the understanding they'll earn tips (average $10/tank) so that they can keep their per-tank price to $30/tank.

Dive Shop A decides to use 'real' prices so that they can pay their DMs better. They increase their per-tank price to $40/tank and give that extra $10/tank to the DMs. Great.

Because Dive Shop B is still $30/tank and Dive Shop A is now $40/tank, a significant percentage of customers shift to Dive Shop B. Dive Shop A loses customers which means lower revenue and the threat of layoffs and/or closing the doors.

Let's say that Dive Shop A convinces Dive Shop B to also shift their model to $40/tank and pay their DMs an extra $10/tank. Now they will both lose customers to Dive Shop C through J and they will begin to lose customers to other dive sites that are now cheaper in comparison and to non-diving activities (snorkeling, parasailing, hiking, whatever) that are now cheaper in comparison.

You can say that dive shops are 'evil' by not using 'real' prices, but they can't ignore basic economics. They are small businesses probably struggling, and they either attract sufficient customers or go out of business.

 

[npole]

The real prices are those ones that doesn't have hidden costs, simply as that.
You pay your workers fairly or you don't. The first is the right way to do, the second is not.
Tipping is something exceptional that should occur only when you receive something additional: if I'm not paying for my tank to be on the boat, I will carry it myself; if that day a gentle person will carry it for me, coz I have a back pain or i'm too lazy, he will do something in additional to what I have negotiated, and I will pay his additional work with an adeguate tip. Apply this for every other situation.
Tipping is not part of the salary, this is a stupidity and until this mentality will change those workers will continue to be exploited, I will not support this bad behavior tipping for something that I have already paid.

 

[George Monnat Jr]

The real prices are those ones that doesn't have hidden costs, simply as that.
You pay your workers fairly or you don't. The first is the right way to do, the second is not.
Tipping is something exceptional that should occur only when you receive something additional: if I'm not paying for my tank to be on the boat, I will carry it myself; if that day a gentle person will carry it for me, coz I have a back pain or i'm too lazy, he will do something in additional to what I have negotiated, and I will pay his additional work with an adeguate tip. Apply this for every other situation.
Tipping is not part of the salary, this is a stupidity and until this mentality will change those workers will continue to be exploited, I will not support this bad behavior tipping for something that I have already paid.

You may not have seen my edit with the example. Please provide your own example to bolster your case.

Tips are not 'hidden' costs, because you don't have to pay them, the shops mention tipping all the time, and DMs treat you better trying to earn better tips.

You have not already paid the tip - see example. You are given the choice of not paying a tip or paying a tip, based on how you think the DM treated you. That's a win for the shop (their prices attracted you) and a win for you (you choose your total price with tip or no tip while DMs are incentivized to treat you better). If the DMs treat their customers well (and I have years of direct experience), they can easily earn more than if it was flat salary with no tipping. In the US, that's a win for the DM tax wise

 

[ChuckP]

The real prices are those ones that doesn't have hidden costs, simply as that.
You pay your workers fairly or you don't. The first is the right way to do, the second is not.
Tipping is something exceptional that should occur only when you receive something additional: if I'm not paying for my tank to be on the boat, I will carry it myself; if that day a gentle person will carry it for me, coz I have a back pain or i'm too lazy, he will do something in additional to what I have negotiated, and I will pay his additional work with an adeguate tip. Apply this for every other situation.
Tipping is not part of the salary, this is a stupidity and until this mentality will change those workers will continue to be exploited, I will not support this bad behavior tipping for something that I have already paid.

What you're saying is all theory and theory isn't practical when the market is the market

Do you know that per my outdated (2009) federal labor law poster, minimum wage was $7.25 BUT minimum wage for tipped positions was $2.13 - so is the whole restaurant industry wrong?

My landscape company in Holland MI charges roughly 60% of what a company in Chicago charges for snow removal, you think I can pay the same wages? Heck, travel 30 minutes East of me and they get 20% more per hour....

Market price structure.

It's easy cashing that check on Fridays when you didn't have to figure out how to fund the account it's drawn on.

 

[ljwillia]

I'm not talking about any increase, I'm talking about forward a fair part of your income to your workers, if you aren't doing this, you do not deserve to run a business. This is what happens in the civilized world: have to rely on a unstable income (tips) is not. Tips should be an additional amount at the top of a fair salary.
Don't be greedy and pay your workers adequately, this is my point, and it's not just my point of view it is the only right thing to do.

I typically stay out of these discussions but would be interested to know who determines a "fair" profit? As @George Monnat Jr points out, if the cost of your labor goes up it impacts the amount of your profit. As a small business owner, I can tell you the profit margins for most small businesses is tight. If costs rise 10% that money has to be covered in some way.

Profit does not = greed. If a business is profitable they are providing a service the public wants to buy. They are employing individuals who are voluntarily providing their labor in return for what they deem to be a fair wage. Given the number of dive ops on the island, DM's have the freedom to move from shop to shop. If they are a good DM and they are unhappy with the wage they are being paid they can seek employment with another shop.

In return, the business owner is assuming all of the risks. They put up their own money, and I guarantee you, went without pay at times as they were establishing their business. The effort and initiative required to open and run a good business is enormous. People don't take that risk because they want to work for minimum wage. They take that risk because they believe that they can provide a better product/service than their competitors and that will lead to more financial security for themselves and their families.

Increased labor costs have to be covered. They can be covered by reducing services or increasing the price to the customer. Only a business destined for bankruptcy fails to adjust to this reality. If you have a dive op you enjoy working with you should hope that they remain profitable so you can continue to use their services. Profit doesn't = Greed. Profit = Sustainability.

I'll get off of my soap box now.

 

[mcpowell]

npole,
While I disagree with your perspective, I think I understand it. I have an easy solution for you. You should only dive with dive shops who do not allow tipping, and who pay their employees the way you think they should be paid. This will support your perspective and market position.

On the other hand, you should not support a dive shop which offers the lowest possible cost whose dive masters rely on tips. By supporting those shops with your money, you are taking advantage of their market strategy, which you clearly don’t believe is correct.

I do not care for cattle boats, therefore I do not give them my money. I prefer smaller, fast, valet service dive operations. I don’t mind paying a little more for more service. Likewise, if the divemaster and crew provide their services well, I’ll tip them well. Let the market and your money decide.

 

[ReefHound]

I have been discussing real prices and market forces. What are the 'real' prices in your opinion? Do you have any evidence that anyone is inflating prices and underpaying employees? If you say yes, then 100% of the dive shops in Cozumel are in on it. Because if only one shop uses 'real' prices and pays their employees correctly, then the customers and DMs will all flock to that shop causing the others to go out of business. Are you saying there's a Cozumel SCUBA trust controlling the market? You definitely should go there and open your own shop!

Could never happen. The established shops are somewhat limited. A shop could offer a DM $100/hour and less than a dozen could "flock" there. You'd still have a couple hundred others willing to work elsewhere because it still beats waiting tables or being unemployed. And the park permits you need to operate a boat are capped. A shop cannot just add lots of new boats easily. You have to buy a boat already permitted. So even if a shop became the best charter in the world to dive with, only a fraction of the customers could "flock" there. You'd still have thousands of others diving with other shops because it is still excellent diving and beats diving back home. Which means the other shops are doing good business and under no pressure to sell their permitted boats. To be honest, I can't think of a single dive charter that was around in 2005 that isn't still around. I can't think of a case where one dive charter bought out another, or increased their fleet size by more than 1 or 2.

I certainly wouldn't call it a cartel or "trust" but there seems to be an understanding between shops not to openly compete on price. I've never seen a shop run a coupon or a sale, or mention another dive shop specifically. There is an organization most dive charters are members of to represent the interests of the overall dive industry there.

FWIW, I've dived with the lowest priced $65/trip shops and the highest priced $110/trip shops, and I cannot discern any difference in service and enthusiasm in the DMs or captains.

 

[ReefHound]

Btw, I'm not trying to speak authoritatively about the Coz dive shop industry. I don't have any inside expertise, just stating how it appears to me based on my experiences.

 

[flyboy08]

Competition doesn't seem to come into the equation on Coz...ProDive, which I use, offers free nitrox! I know of no one else on the island that advertises such. Adding the usual cost $10/ tank) on 2-4 dives a day times 6 or 7 adds up...

I believe that the COZ market is self correcting on pricing. The only thing I see is a greater turnover in DM than using a long time established outfit and that itself is a cost factor.

 

[ChuckP]

Nothing in life is "free".

I offer free grub control when you buy a 5 application fertilizing program - it's a marketing ploy, just like the free nitrox is a ploy. Since I'm selling my business, I really should tell you what a scam the free grub control is........... If a new customer reaches me on the phone, they get the explanation cause I like what I see in the mirror.

They are able to use that marketing ploy due to the way their business model is - what works for one doesn't work for others.

They obviously have clients cause they are still around, the smaller valet services that charge more have their clients - it's all good.