A submission to the Straits Times forum.
The Submission
Apart from covering costs and generating profit, charging money for tap water is a well-known tactic to nudge consumers to purchase drinks by making their drinks relatively more price competitive. In determining the price of water, restaurants also consider (among other things) their target market’s preferences, the behaviour of their competitors and the degree of water’s substitutability with other drinks.
Some countries’ restaurants automatically provide water for free because it is such a deeply entrenched cultural norm. In those societies, serving free water is preferable to pricing water in terms of business strategy. Led primarily by market forces rather than benevolence, they use a different pricing approach. Both pricing schemes are deemed to be profit-maximising.
Within Singapore, some ramen restaurants supply free and unlimited bean sprouts and hard-boiled eggs. Are we more inclined to believe that this is a business strategy or that the shareholders or managers of these particular premises happen to be more philanthropic? Similarly, ramen restaurants that offer free provisions and those that do not are both following their respective perceived profit-maximising paths.
Just like providing complimentary water should not be indubitably interpreted as altruism, charging a price for water is not necessarily an unconscionable practice.
By providing free water, restaurants can improve customer satisfaction and hence their competitiveness in the industry. This is a proposition commonly offered by well-meaning individuals. However, they mistakenly believe that this suggestion is constructive. This is like telling taxi drivers who queue at airports that their time could be spent more productively by fetching people elsewhere. These statements are not helpful to restaurateurs’ and taxi drivers’ as you can be absolutely certain that these considerations are already in their thoughts. People automatically optimise their balance of trade-offs when it is in their direct interests to do so.
Next, a good reason to introduce additional price controls and bureaucracy into our markets is to reduce externalities generated by the consumption of sweet drinks and plastic bottles. However, a general tax on sweet drinks and plastic bottles would also fulfil that purpose and may be more judicious as it would encompass all of society, not just restaurants.
To conclude, restaurants operate in a competitive market and many establishments run on thin profit margins. If distributing complimentary water does not affect their bottom lines, why wouldn’t businesses do so? Restaurateurs are rarely ruthless profiteers—many of them possess an ethos of customer service and are well-cognisant of the benefits of expressing it. If not for business pressures, they would give free water as it would make them content to see their customers being satisfied.
Comments
This did not get published.
The provenance of the letter I replied to is of interest. The writer has a long Wikipedia page, was a former Attorney-General of Singapore and has distinguished appointments in multiple local universities. Someone who concurred with him had his reply published.
Extension
Check out this Reddit thread which discussed the Professor’s letter. Most of those who commented agreed with him and even extolled his writing.
The comment with the highest net upvotes was “10% service but no water”. By saying this, the Redditor is implying that the compulsory service charge should entail free water2. Replying to this comment was “Exactly this. I think getting free tap water should be part of that charge.” Many others echoed a similar view.
I find such opinions abhorrent as it is underlied by an egregious misconception.
Money is fungible. It is called a service charge only in name. By no means do the earnings from service charges go only to covering service expenses. And revenue from food certainly does not only go to the chefs or ingredient suppliers. If that were how it works, there would be an a% rental charge, a b% furniture charge, a c% utilities charge, a d% accountancy charge, an e% insurance charge, and an f% marketing charge. While we’re at it, throw in a g% chef hat charge, an h% credit card reader charge, a i% dishwashing liquid charge, a j% cash register maintenance charge and a k% receipt paper rolls charge. It sounds as ludicrous and abominable as the completely misguided and awful notion that water ought to be part of the service charge. Money is fungible.
Additionally, 2 people revered the last paragraph of the Professor’s letter:
“In their quest to squeeze the last drop of profit from customers, these restaurants are damaging the environment. For the sake of future generations, this irresponsible, short-sighted profit-at-all-costs attitude must stop.”
Comment 1: This stands out. Can be used in so many situations. Just change a couple of words here and there. Very well written imo
Comment 2: I mean, this is Walter Woon after all. Say what you like about him but his command of the English language is impeccable.
These are 2 ways of saying you don’t read above the 5th-grade level3.
Moreover, that part of the letter is the type of argument I despise.
Professor Woon is the former Attorney-General, Emeritus Professor at the National University of Singapore Faculty of Law, Lee Kong Chian Visiting professor at the Singapore Management University Yong Pung How School of Law, and the dean of the RHT Legal Training Institute. Why does he so easily succumb to his intense normative opinion and write in this highfalutin way, instead of giving a considered line of reasoning that would better convey his feelings? Why resort to dogmatic moral condemnation?
Maybe he writes like this not in spite of, but because he is a lawyer.
Questions For You
⭐: Feel free to give an open-ended answer below!
Footnotes *️⃣
Note 1: I am not able to reproduce any articles published on the Straits Times here due to their exclusivity policy.
Note 2: Virtually all restaurants in Singapore have a 10% service charge regardless of the standard of service. Singapore does not have a tipping culture across establishments of all classes.
Note 3: I do not mean to say that Walter’s English is subpar. I’ve never read his other works, so I wouldn’t know how good his language expression is. Maybe the article did not fully demonstrate his writing prowess.
BLOGOPUS 
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