The Ethics of “Free” Tours

There’s a movement spreading across Europe in which American expats and students are offering “free” walking tours of a city, and then hitting people up hard for tips at the end and cross-selling other tours that aren’t free. I’m a big supporter of small, independent guides throughout Europe, and these tours (almost impossible to compete with because they are promoted as “free”) are threatening them.

Trying to be impartial, I write up the “free” tours along with the expensive standard private guided options in my guidebooks. It’s a messy situation. For example, aggressive new companies promote “free tours” that start at the same time and place as standard, higher-class tours, and then fight turf wars right there with the professional guides while groups stand by helpless, waiting for their tour to start. There are legal battles, as free tours don’t think they need to be licensed because they are technically “free,” so threatened standard guides turn them in to local authorities.

And now I’m getting friends in Europe (who are part of the professional guide community) upset with me for advertising the “free tours.” Here’s a letter (heavily edited to disguise and protect the author and companies in it) for an insight into this issue. While there are many free tours with a similar business plan, most are run by one man, who I’ll call “Tom.”

Hi Rick,

Gilbert Jones here. I just saw the 2010 edition of the Rick Steves guide to my city. You write up Tom’s Free Tours, saying, “And best of all, they’re free.” Don’t you understand that company’s modus operandi? If not, you should.

I recently took a “Tom’s Free Tour” in Munich and talked later with the guide who explained to me their arrangement. Here’s the diary entry (word for word) I wrote minutes later. If my guide was telling the truth, the diary entry tells you all you need to know:

There were 38 people on the tour. The guide told the group at the start, “When we end the tour, if it was worth paying for, a tip would be most appreciated.” There was a Tom’s Free Tour handler there. The guide told me that he has to pay Tom €2.50 per head. The handler takes a group photo right at the start so Tom can’t be fiddled by his guides. While the group sees it as a fun group photo (available on the website), the real reason for the photo is so Tom’s guide knows that Tom knows how many were in the group.

Guides generally make enough in tips to cover the €2.50 per customer that they have to give to Tom. But sometimes they actually lose money, especially if it’s raining and people bail out before the end of the tour — i.e., before “tip time.” If people only tip €3, the guides don’t make very much. 

Guides are generally native English-speakers — students from the U.S., N.Z., and Australia. I asked my guide how they get around the work permit problem. “Oh, that’s not a problem — on a student visa, you can work 20 hours a week.” She said they’re classed as “volunteers” — so technically they’re not working for Tom. So you’ve got a situation where you have to pay a “boss” to be a “volunteer.” Tom is now in 12 cities, and more every year.

 Basically the deal appears to be this: Tom advertises to get a crowd of customers out on a tour for the guide, and the guide needs to hit everyone up for tips to cover the fee. And if you don’t want to be out of pocket, you damned well better get them to come across with at least €2.50 each, because that’s what you’re going to have to pay Tom to “volunteer” to do this.

In short, “free” is not free and “tips” are not tips. This is clearly a commercial operation. And local laws address this very matter — bosses cannot help themselves to their workers’ tips.

So, Rick, if you are promoting these tours, we want you to consider the ethics. Is Tom’s advertising misleading? Is it possible to attract — and keep — reputable, good, professional guides on that basis? Would a Rick Steves tour be entrusted to one of their guides? How much in-your-face breathing-down-your-neck-for-tips goes on with these tours? How fast does Tom “turn over” guides? Is he in breach of local, national, and European unfair competition directives? What’s the tax situation?

Rick, we go back a long way. We have endless amounts of admiration for you and your team and your operation. Endless amounts of admiration not least because you’re a straight shooter. As you straight up said to me a while back, “I take care of my credibility.”

This one needs to be revisited, Rick. There’s a lot going on in Europe about all of this. Tom’s operation will soon be in every country. Please reconsider promoting him in your guidebooks.

Sincerely,

Gilbert Jones

I’ve long struggled with letting business ethics interfere with my listings. (For example, many B&Bs in Scandinavia prefer cash because in the most highly taxed corner of Europe, unreported cash payments are essentially tax-free. Their prices are too good to be true — or legal.) And I myself have long given “free” talks intending to sell books and tours to attendees. These “free” tours have admittedly shady ethics, but provide nearly free entertainment. How should I handle these issues? And, what is your experience with “free” tours in Europe?

Comments

61 Replies to “The Ethics of “Free” Tours”

  1. If the letter is accurate, this is a really shady deal, and I wouldn’t want anything to do with it. I’m glad to know the background, because now I know to avoid these “free” tours. I’m surprised you’d list them – clearly they’re only “free” in the most technical sense. A really free tour is one where you’re not hit up for “tips”. It also sounds like this operation is not only unfair competition, but probably illegal.

  2. What should you do? Perhaps compromise. Mention that these tours exist, but also mention the controversy so that travelers could decide for themselves,and, be prepared to tip enough to adequately reward the guide (if deserved).

  3. Let me start by saying that I am a huge fan of companies like LondonWalks and ParisWalks that offer great walking tours and do not require that you prebook, which is important to me. My son and I went on the “free tour” in Amsterdam because we wanted to get an idea of the layout of the city and because I could not find any other walking tours that didn’t have to be prebooked. I knew ahead of time that there was a tip expected so that wasn’t a big deal nor did the guide push anyone for one, in fact a lot of people bailed out before the last stop. That being said, though it was enjoyable, the guide was not a local so it was not a great learning experience nor did it compare with some of the walking tours I have done with professional companies in other European cities. I see now that they are doing “free” walks in London, but I would never not go with a company like London Walks because of the quality of their guides and the great information I have received. Should it be left out of the book – I’m not sure because I think, at least in the Amsterdam book, you made it very clear about the tips – but I would never want it to be the only option mentioned if there were other companies that provided better service just because there was a cost involved.

  4. Rick, The best I feel you can do is continue to give your honest, open opionions and information to help us,and then its up to your readers to make their choice.

  5. Totally agree with Angela – I think it’s a service to your readers to list these “free tours” while laying it out straight that you get what you pay for (or don’t pay for). Give the facts and let the consumer decide.

  6. I also concur with the last two – I think Rick needs to stay “unfiltered” – thats what the news/media is for! Rick can add the caveots as he does to the best of his ability but its up to the reader too. I actually took “Tom’s” free tour in Munich this summer and really enjoyed it. I also took a more expensive paid Beer-Walking tour – both were interesting. The free tour had 2 cool British students that did their job well (albeit for only 2-3months) but added a different perspective. The Beer tour had a young chap from the UK that grew up in and went to school in Munich as a youngster so he was indeed a local but more mature and knowledgeable. I have also taken a private tour in Barcelona thats was 300 euros from RS book – just me and the employee guide local. It was great but for for a single tourist a bit high – no discount even for RS reader! Id say there is a lot of tourist money to go around and Like hotels and cafes we can all choose to go cheap or spend large! Rick does a good job of listing many options – keep it up.

  7. I think I know exactly what company the letter refers to. When in Munich last year we actually took a paid tour from this company first and then on our last day took the free one to see if there was anything we’d missed exploring on our own. I have to agree with Gilbert the setup of the free tours does seem a little shady and there was a heavy push for tips. The problem though? We really enjoyed it and the guide seemed knowledgeable and enthusiastic. So what is a tourist to do?

  8. it’s a great thing that you’ve shared a post like this.. at least people will be informed of these things.. thanks a lot for not being selfish of sharing this one.

  9. From this letter, the operation does sound a bit shady, and I will reconsider going on these types of ‘free’ tours in the future. That said, I have done one of these before in Berlin and loved it. Our tour guide was an amazing story teller and we learned a ton. I vividly remember the end of the tour, sitting on the steps of the art museum as he acted out the final days of the fall of Berlin–we were all mesmerized. I think my boyfriend and I chipped in $10 euros at the end, and we were both poor students. Many folks gave even more.

  10. It has long bothered me that your books contain advertisements for “illegal” tour groups. Besides the larger company mentioned in this blog posting, in almost every city, your books contain listings for guides who are not properly licensed with the city, you’re undercutting local laws. For example, in Italy (as I’m sure you are aware), ALL tour guides must be licensed, and it is illegal to operate a tour without said license, and said license isn’t easy to obtain. I personally would never go to another country and knowingly betray the laws. If you genuinely feel that listing certain “illegal” tours is a good thing to do for whatever reason, of course, you have to reconcile the local laws with the fact that you want to give people the best experience possible (and we, as your readers, appreciate that!), however, a disclaimer with certain tour companies/guides saying that they are unlicensed would be a welcome addition so that those of us who really do care about not taking unsanctioned tours don’t spend our money supporting this kind of enterprise.

  11. What kind of image do you think you will be creating for yourself and your company if the local authorities decide to clamp down on some of these guides and some of the people they’re showing round at the time got the details from one of your guide books? You shouldn’t give publicity to something which you already know to be illegal. End of story.

  12. Rick, I’m disappointed. These shams called “free” tours shouldn’t be rewarded with free publicity. Especially at the expense of those adhering to the rules. What’s going on is (almost) akin to someone who’s car breaks down. He or she calls the wrecker but Before their licensed tow truck gets there, some other unlicensed rig rolls up and will hitch it up at dirt cheap. In essence, that’s what you do when you list licensed tours and the fraud “free” ones on the same page. That’s not competition, it’s allowing illegal activity to take Euros or Crowns or Florint or Lira out of honest hard-working tour guides’ pockets.

  13. Another aspect is that “they” are using you as the first media quote on their website: ‘Media Excerpts “…wonderful, free Berlin guide magazine…take their introductory walk for free…” – Rick Steves’ Austria and Germany 2006′ Did you give permission?

  14. Whenever I see anything for “free”, I know it’s not, especially if it’s for tourists. So I know that a tip is expected before the tour starts and so, to me, is ok from MY view. But using the “free” method to trick people or to bypass laws is NOT ok. I REALLY hate the bait ‘n switch. In some places I’ve been (India, Cambodia), some guides would say, “if you like my tour, give whatever you like”, but again, this was same as above and these people did not have licenses. But thanks so much to Rick for the transparency which helps us make informed decisions and is also very interesting.

  15. I’ve taken a free tour in Berlin in my past travels. I suspect it was from the same company that was eluded to in the edited version of the letter. The free tour came heavily recommended from a friend who took the same tour a year before. I didn’t really think about fair business practices when I went on the tour as I was on a budget and free sounded good to me. For what it’s worth, I had a great guide who seemed very passionate about Berlin. I enjoyed my tour and it helped me figure out how to get around Berlin for the rest of my trip. I had no idea what was going on behind the scenes in the world of guided tours. I can’t say I’m surprised to learn about the shady business practices going on. I think it’s important to note the fair business practices in your book. As a tourist, you’re faced with making ethical decisions, especially when on a budget. At what cost does a good deal come at? Personally, I will think twice before taking a free tour again. I think it’s worth my time to research and find small outfits or private, local guides. You may pay a little more but you can be confident knowing you’re supporting the local economy and hopefully getting the best possible tour.

  16. Trust the customer to wise up quickly and also spread the word about fraud or about good deals. And for a seller not to acknowledge what is happening in the marketplace, good and bad, is unrealistic in a world replete with rapid communication. Customers are more inclined to buy repeatedly from vendors who tell the whole story – warts and all. Customers know that some offerings are worth a premium price. Rick Steves has built a business on credibility and a great product. Great products succeed on their own merits and many, but not all, will pay a price for the best. Bill Kester

  17. I don’t think you should advertise the free tours, but the background information about free tours is very valuable to a tourist and is appropriate for a guide book. JG

  18. Since your readers compromise all income brackets, I think it is fair for you to list all of the available options with full disclosure on the pros/cons. Especially with the euro at $1.50 right now, people on limited budgets need to try and stretch their spending power as much as possible. Let the reader make their own informed decision. These “free” guys are just using a different business model not unlike Ryanair, Easyjet, Air Berlin, etc. with their “free” or 1 euro seats (do you see BA, AF, and LH complaining?) If you’re really into history, you might value the additional detail that comes with the high cost of a professional guide who is a retired history professor or whatever. If you’re simply a casual tourist who wants an orientation to the city and maybe a few facts, maybe these “free” (let’s call them low-cost) tours might be for you. If the professional guides feel that these “free” tours are breaking the law, then they should raise a complaint through the appropriate legal channels. European politicians are generally sensitive to issues involving labor and they will take action if they feel that the claim is valid.

  19. I do not think the “free” tour scam artists “are just using a different business model not unlike Ryanair, Easyjet, Air Berlin, etc.” The airlines have to obey laws concerning their operations. Labor laws, flight safety regs, etc. The “free” tour operators are ignoring laws and skirting any rules or regulations concerning their operations. How does a person have any guarantee of their safety with an unlicensed guide? Don’t licensed guides go through a background check? With an unlicensed guide could a person or group be lead to somewhere where the “guide’s” gang be waiting to rob them? I would always go with a licensed guide even if the cost is more.

  20. The real tours are priced very fairly, offer good value and I would choose first unless they were booked. Then a free tour makes sense,

  21. I’ve taken a “free tour” in Madrid with what I assume is the company Rick is posting about … although i don’t recall a group photo in the beginning … it was 2.5 hrs but i left at 90min mark since i was meeting my wife and her parents for lunch after they took the morning off… i made sure to tip the guide 10 euros btwn stops as we walked before i slipped away …well worth it i felt the tour was well paced and informative and the guide was charming and a well spoken “frustrated English actor” by his own description … as for the ethics of the company i dont think the guide was in any way coerced for gods sake and the everyone in the group understood the implied idea that a tip was expected ..its just a different model where the guide lets the consumer decided the value… i bet in the end its on avg. better then if they charged a “normal” price …”official guides” complaining is akin to brick and mortar complaining about ebay … bottom line if the guides didn’t make enough money to make it worth their time they wouldn’t do it…. its called a free market and it works

  22. I think if you just give all the facts pertaining to anything you mention in your books, that is all you can do. We need to hear the good and bad. Your books have saved me from hundreds of mistakes over the years.

  23. Definitely keep everyone informed of all tour options whether legal or illegal. After all this is simply an American marketing strategy that jumped the pond. Americans especially should be up to speed on how “free” works. If your not comfortable ask what the expected tip is or just ask how they make their money. As Des stated, you may get a better experience as the operator has to earn his wage on each tour since he/she doesnt get paid until the end. If they are not making a decent wage they will simply quit. If they make more the word will spread and the old style operators may convert to the free tour model. Be sure to keep us informed if they are breaking any laws. I would not solicit them knowing they are breaking the law no matter how good the reviews are.

  24. Why does a guide need to be licensed anyway? Sounds like government putting thier hands in someones pockets again for no good reason. It is not like they are handling food, operating on someone or in some other position that could cause harm if they do thier job incorrectly. Do licensed guides get training in crowd control, or safe techniques for getting everuone across the street before the light changes?, maybe they have to pass a class in carrying a funny upbrella or stick with a ribbon through an obsticle course without letting it drop? I say don’t let Govt interfere with something this inconsiquential or your reporting of the travel options available to us.

  25. I have used Context tours several times. They are expensive, but they are just so good that I never pass up the opportunity when I am in the mood for excellent learning opportunities while traveling. If I worked with Rick Steves’ tours and found you also aided groups that were shady, I would be very disappointed in you and your company. It is so difficult to be successful in the world that shady groups should not be given any free marketing; they should be ignored completely. Spend your time find great references for honest businesses so that they become more successful! I have to believe you already knew the right answer. There is not that much gray area here.

  26. I worked for Toms Tours in Paris and am constantly dismayed at the amount of incorrect information out there about the company and its practices. First of all, countless court cases brought by other tour companies have given Tom the legal basis to do exactly what he does. The company is in full compliance with the law. Being a guide there is very difficult, due the way that we were treated-just ask the Paris City Manager. It is true that we were required to “pay in” a certain amount per person, to cover the costs of advertizing and administration. Every guide knows this going in. We were required to sign an official company “tips-plug,” where we mention tips once at the beginning of the tour and once at the end. Anyone who is intrusive or “in your face” is immediately fired. The tour is FREE, at least for the customer, as there is no requirement for you to pay at the end. The tour is not free for the guides, but it surely is for the customer. Sure the free tour sets up for other “select tours,” but again, all companies offer specialized tours that feed from their basic introductory one. Toms does exactly what every other walking tour company does, but to the extreme. The guides are not volunteers, but rather free-lance tour guides, who are legally self-employed. The guides actually hire the company to do marketing and advertizing for them. Sadly, this is the situation in almost all walking tour companies in Europe. Guides are hired as free-lancers, so that the company can avoid paying for all social security, health-insurance, and pension costs. Let me repeat that: almost all other walking tour companies, with so-called “professional” guides, hire people on a free-lance basis to avoid taking any responsibility for their future. All the guides I know who work for Toms, have the proper work and living permits—we all pay taxes. The company is very specific about this.

  27. Sure many of us are not “official” or licensed” guides. Most cities in Europe do not require guide licensing. In fact, the EU and the OECD have recently decided that guide licensing is contrary to the principles for business competition and the free movement of goods and services across European borders. Spain, Italy, and Austria are currently defying these decisions. All a guiding license tells anyone is that you are officially sanctioned and have taken classes in history and culture. These classes don’t teach you a thing about being a guide, which makes so many official guided interesting and exciting. Toms gave me excellent training, not only in the tour, but in how to be an interesting and helpful guide. Like all other tour companies out there, all of the tours are scripted and meticulously fact-checked. Let us keep in mind that ALL tour companies are comercial operations! The main difference between this and other companies is the way the workers are treated. We are constantly brow-beaten, degraded, and humiliated by the guy in charge. He finds the most menial excuses to cut your pay or not pay you altogether; many people have open bills that are over 6 months old. The company tries to “get you” at every turn, using the most horrible tactics to exploit the guides and other employees. The company preys on people who have few other options and we all lived in constant fear of getting “Tom-ed” for no legitimate reason. The free tour concept was revolutionary when it first started, but is being ruined by what I believe to be mis-mangement by a boss that is quickly becoming the most hated person in European tourism.

  28. These “volunteer” guides use a more high pressure sales pitch for the tips than what’s presented. In my experience a great and informational tour can be negated and very easily turned sour if I was encountered with a pseudo high pressure sales pitch at the end. Also, taking a “fun” group picture that is really used for accounting purposes just leaves a bad taste in my mouth. My Family and I really enjoy your work Rick, thanks!

  29. Goodness gracious, this “Tom” fellow sounds more like a pimp–or Fagin from Oliver Twist. Sounds like the entire premise of the free tours is to exploit everything to his advantage. Exploit the tourists, exploit the young people, etc. Rick, I’d also suggest that you should mention them, INCLUDING what the “catch” is. Your readers are smart; just inform them and they can decide on their own whether their conscience will let them go on one of these tours.

  30. Nothing is free…and the discerning traveller knows this. There are going to be people who will always take the “free” tour and there will be people who will feel they’re getting a better deal only if they pay money for a tour. There is an infinite number of tours for the infinite variety of people who travel. You should continue as you have been doing – write up what’s available and give people as much information as you know, i.e., “they’re free but…”. In other words, continue to be impartial. One of the great things about your guidebooks (and my Italy is dog-eared and highlighted and ripped apart and held together with elastics!!) is the great variety of choices you offer the reader – don’t change!!

  31. Coming in late, after the comment spammer (yay) — I think you have to mention these tours, or travelers will take them not knowing. Just explain what is going on. If you’re not going to endorse them, you can make that clear as well. That being said, I have taken many paid tours for which a tip was solicited. Just saying. As to why guides should be licensed: I live in Philadelphia and there is a movement to license guides so that they can be tested after some were caught disseminating incorrect historical information. One of the reasons people take tours is to learn. It would be a shame if they learned the wrong thing!

  32. I agree with the sentiment that, if these tours are mentioned in the books, their business model should also be mentioned so we can decide where to spend out money. I personally don’t like to support exploitative businesses and go out of my way to support businesses who treat their workforce well. I also think that licensing can help ensure that guides are fluent in the languages they claim to speak and know something accurate about the places they are taking the visitor to.

  33. Advertising for these “free” tours in the Rick Steves books does not seem like the best policy to follow. If Rick likes to support the regular tour companies, then I don’t understand him writing recommendations for the free ones, especially since they have such shady practices. Stand up for yourself Rick, you do it in other areas, why not here? What is the policy at Rick Steves for publishing tour information? Why do some tours get in the book and others not? What is the criteria and is it used across the board for all of the companies? Reading the Berlin and the Munich section of Germany 2009 and 2010, some high quality, well established tour companies are ignored and the “free” ones presented instead, so some of the statements from Rick at the beginning of the blog don’t seem to be very consistent. Especially when one looks over on Trip Advisor and reads the reviews for the many different companies. The ones that have the most and the best reviews are left out of the Rick Steves books??? The “free” tours have very few and very inconsistant reviews, so why are they in the books at all? Don’t you want to advertise the best for your readers to increase their enjoyment of their vacation? As to the policies of the “free” tours, why not post this information a little bit more prominently on your website to make people more aware of it? It seems a bit hidden back here on a blog. Also,the spam that is in this comment section from the last 10 days is a shame and detracts from the messages.

  34. I don’t see an ethical problem here. Essentially the professional guide friend is asking Rick to help enforce what he believes to be the rules even though the local authorities aren’t enforcing them! It seems to me that the guide should be making his case about legality somewhere else, not to Rick. There are some legitimate points raised — how good are the tours? But just as Rick isn’t obligated to mention every B&B offering rooms but only those he approves of, same thing applies to tours. If Rick or his researchers have taken the tour and found the presentation acceptable, then by all means recommend it. Sure I’d like guides to have full-time jobs and a good living. But they aren’t *entitled* to it any more than buggy whip manufacturers or anyone else who’s job prospects have been reduced or eliminated by changing mores or practices. As for “free” being misleading, I think Rick answered this himself. He gives “free” talks in hopes of attracting business, hosts a “free” PBS show that is probably the way many first heard of his company, and so on. I don’t think anyone is so gullible to think they won’t be asked for a tip, any more than I expect to see the “free” Shakespeare in the Park plays and not expect them to ask for donations at the end.

  35. Capitalism, by its nature, creates different market segments and delivery channels. Company A may take care of its employees while Company B does not. As someone said earlier, Americans understand this concept pretty well. Let your readers know how the free tours work. If they are legal and otherwise meet your standards, you should continue to list them. Besides, everyone knows you’re going to be asked for tips on a free tour (and many paid ones as well).

  36. I’m an experienced guide in Europe, now surrounded by these free tours. You won’t expect me to have anything nice to say, and I don’t. Tom’s company gets around that by classing everything as ‘free’ and ‘tips’. He exploits the naive enthusiasm of his almost universally young workers, like a burger bar employs teens This company is a parasite leeching the culture off Europe and basically stealing from its ‘host’ cities, who used to get tax for proper guides he’s putting out of business. He’s pushing wages and working conditions down across the industry. Tourism has always been a low-pay and exploitative, and its true there were no pensions, healthcare and insurance benefits for most city guides before ‘Tom’ came along. But they were arguably too small to pay such benefits. Tom’s a multi millionaire, he can, but he won’t. Here’s my question for all you travelers: would you like your children to work for tips?and no benefits when they grow up? No? Then don’t support a tips-only economy. You create the world you live in by the business practices you endorse.

  37. Indeed it is a complicated situation. In terms of the guidebook, the first question should be are the “free” tours any good? Generally, in life you get what you pay for and there is no such thing as a free lunch. It seems like a hazy legal situation. Clearly, young ex-pats and students are desperate to make a little money in a region that offers very few legitimate employment options for non-citizens. The second question is “Tom” treating his employees fairly? This would require a little more info than a few anecdotal comments. Perhaps the best option for the book would be to simply mention that free tours are available for tips but not list any company names.

  38. I’m a little bit conflicted on this! Myself and my friends (all poor college students, who really, REALLY love traveling) have taken the ‘Tom’s Tour’ in probably 5-6 different European cities, and really enjoyed it every time. The guides are definitely well-informed, interesting, and funny. But now, knowing about this shadiness going on in the background, I’m not sure how I feel! I wish I could say I won’t take another ‘Tom’s Tours,” but I like the format, and think it’s a good introduction to a city. Plus, there’s no way I can afford an official tour right now! I guess I’m just disappointed to learn that of course it’s not as it seems. But I think you should be honest in your guidebooks, and at least mention them as an option, complementing that information with your own personal opinion. Afterall, that’s the great thing about Rick Steves’ Guidebooks- opinions!

  39. It was intersting to read the complete details of how it works, and here are acouple of thoughts. 1. All grown ups are supposed to be bright enough to know the there is no such thing as a free lunch or anything else. 2. It reminded me of taking a tour boat in Amsterdam meny years ago and at the end the narrator told us he was working on tips. He was excellent and we tipped well. 3. Guides who work on tips are getting instant client feed back and have a natural self-interest in doing an excellent job … the better they do the bigger the tip. As an independent traveler, as long as the details of “free” are spelled out, I have no problem with it.

  40. There is now a brief translation available for those who don’t understand German. The major free tour operator has been accused by a professor of law of breaking the law. It is illegal for guides to have their tips stolen from them and illegal not to pay them an hourly wage. http://www.toytowngermany.com/lofi/index.php/t168465.html Whether you think the free tours are good is NOT the issue. This is the issue: should workers be exploited in such a disgusting way? Are we all going to be working for tips soon?

  41. The Frontal exposure on national TV in Germany was about „Tom“ and his Berlin operation (his first and largest). Here in Berlin, the guides have to pay €3/head, rather more than the €2.50/head in Munich referred to above (this is confirmed by Tom’s own staff who interview the reporter thinking that he is applying for a job as a guide with them!). There are 3 big issues here, the way I see it: first, is it fair for a company to claim something is “free” when it is demonstrably not so? Legally the company gets round this by claiming that there is no compulsion to pay, but you try going on one of these tours and not paying! They should be described as “pay at the end” tours.

  42. Secondly, “Tom” and his ilk have taken a huge amount of business away from the paying tours (Rick, I take issue with your comment referring to these as “expensive” – is €10 or €12 for 3 or 4 hours of educated entertainment “expensive”?); so what does it matter, you might say, isn’t this just tough on the paying tour coys? Well, believe it or not, the paying tour coys pay taxes on earnings (as do their guides) because it is all transparent. In the “free” tour model, perhaps the operator declares some earnings from the guides…but how much does the tax man see of the “tips”? It doesn’t take much imagination to see that this is a huge tax scam (sorry, Alena, just don’t buy your claim that all Tom’s guides in Paris are paying taxes!). Third issue is clearly that the “free” model is exploitative of the guides. They are not allowed to tell the clients (see the Frontal exposure) that they have to pay a fixed amount of money to the operator and clients assume that what they pay is all going into the hands of the guide. Rick, to be fair in your guidebooks, you need to explain that the “free” tours are really pay-at-the-end tours; that they are driving tax-paying, legal operators out of business with this “free” deception; and that they are hoodwinking their own clients as to where the “tips” end up.

  43. As a Berlin tour guide who has seen the average quality of tours gone down the drain while unqualified newcomers, hired by “Tom”, many of which had no or very little knowledge beyond the company training, squeezed out the market from the bottom, I can only say: The customers will not like the effect in the long run. A customer on any tour should know how the model really works. The “Tom” company in Berlin demands from its guides 3 Euros per person walking on that tour, no matter what the guide made in tips. That is nothing but a tax evasion scheme, and the German IRS is simply too slow to wake up to this. That is why the “free market” argument isn’t working. Imagine Chinese guest students giving walking tours of Washington DC by scripts they have learned, all other knowledge missing; imagine them having to pay a fixed sum to their boss for each person starting to listen to them at the beginning of the tour, their company owner claiming before the law that his guides are free entrepreneurs merely hiring him for the marketing; imagine, because of that, trained historians of the city going out of business; then imagine a tourist asking “So what is this city of Washington named after?”, and the improperly trained tour guide, just making it up, responding “Some Englishman, I believe.” That’s what we’re dealing with. I have seen “Tom” guides making up answers. The argument that the guides would not work for “Tom” if the pay was too low does not work either: Too many of the folks working for him want to make a quick buck while they stay in Europe, and, as non-natives, take anything they get, sometimes because they actually have no work permit. You don’t need a qualification to be a “Tom”-Guide. In any case, Rick, your customers should know that if they go on these “free tours”, to quote an old saying, there is no such thing as a free lunch: They do buy unknowingly into an exploitative economic model set up to dodge taxes and crowd out the quality market.

  44. I as well take issue with the comment that €10 is expensive. It costs €8 just to enter one museum. €10 gets you four hours and an overview of ALL the history. These free tours for me truly cheapen what is so special about operations like London Walks. These operations add something to the experience, the free tours detract something. They are like the McDonald’s of the tour industry. Someone will always go on them but they are not to be compared with quality tour providers. I used to shake my head at the silly people who sit on those bus tours with earphones on (who by the way often pay more than €10) now I shake my head at those following these ridiculous “free” signs and then the awful herds of tourists who plow throw the night on these pub tours. It gives the whole walkingn tours industry a bad name.

  45. There are two issues here, legality and morality. Contrary to popular belief the way the company works is probably legal, provided the guides are freelancers. It has been claimed that Tom does not allow his team to work for other companies for fear of competition, which is suspect as it means the guides who, in many companies must guarantee that they are free lance, are probably breaking the law, but this is an issue with Tom not the business model. Proving any of this in a company with such a rapid employee turnover and where the financial turnover is quite low is however a nightmare which is doubtless one reason why the authorities are not that interested. I believe the problem is fairness. 1. It is grossly unfair that guides are not allowed to mention their “costs” for fear of bad publicity. This speaks for itself. 2. It destroys the lively-hood of other guides and companies. Without being OTT it is the sweatshops of the guide world. Vulnerable but bright american, british etc students appear in Berlin desperate to spend a season in the capital of cool. They are willing to work for next to nothing provided they can survive. They avoid expensive health insurance as they are often still covered from home. They avoid taxes as they are often not around long enough to be caught. Guides who work for 10 Euro tours, which pay a living wage, cant compete. Tom is therefore not breaking the law but it remains morally questionable. Rick, Its not for you to decide whether or not Tom is a modern day Fagin! But I think you should enlighten your readers as to the business practise. I also think that this is the most damaging thing you could do to Tom’s company.

  46. There are two things I find particularly interesting about this case. 1) One comment from a former “Tom” employee on another message board explained that the initial idea was to offer these “free” tours as “teasers” – they were meant to be advertising for the paid tours. It became clear quickly, however, that many who went on the “free” tour were not interested in paying tours, so it was clear from the very start that the concept didn’t work. Guides were taking home lots of tips and “Tom” was getting nowhere with ppaid tours. When these tours came out, “Tom” billed them and the idea as revolutionary even comparing himself to open software. The reality is people will do anything if it’s “free” and then move on. Unfortunately, “Tom” took the path of charging his guides rather than rethink the whole model. 2)so in relation to that I find it interesting that “Tom” continued to expand throughout European cities although it was clear from the Berlin start-up that the idea of free, teaser tours was not going to work. I think the company’s actions fall under the category of extreme hubris. Generally, “Tom’s” tours are an extreme example of the consequences of cheap, low-budget tourism – really it’s a mirage. Someone does “pay” down the line – whether it’s the customer in terms of quality or even non-existent service or the employees who are massively exploited or short changed.

  47. This whole debate and the ZDF article are just ridiculous. How can anyone say these guides are being “exploited”?? If they don’t like the system, if they aren’t making good money, they would quit! I’ve been on several of these tours throughout Europe, and while no one specifically told me the guides had to pay, I assumed it. Common sense says that the company has to be making money, why else would they continue to run the tours? The tours I went on were great, so I tipped my guides. If they hadn’t been good, I wouldn’t have tipped. So a system like this means the guide has to work harder, and the tourist has a risk free opportunity to check out a tour. And like I said before, if that didn’t work for the guides they could always quit. An article like this one ZDF out out just seems so obviously sensationalist that the story was probably “leaked” by a competitor, don’t you think?

  48. Laura, it is not an article, it is a German national TV report on a show that is the German equivalent to “Weekly Night News.” And the report is by a guide who used to work for “Tom”, and blew the whistle, so it’s not “leaked” by a competitor but by a “Tom” guide. As for your arguments, I am sorry, but I should point out that they are based on flawed assumptions. You say: How can anyone say these guides are being “exploited”?? If they don’t like the system, if they aren’t making good money, they would quit! Actually, they do quit, and in rather large numbers. The “Tom”-company’s guides usually quit the company within a year. The ones that are really good move on to other companies that pay well. Which should tell you something about the company. So a system like this means the guide has to work harder, and the tourist has a risk free opportunity to check out a tour. I find this actually insulting to all tour guides who do not work for tip only. I always did the best I could, whether I had two people in my group or twenty, knowing that my salary fluctuation is covered by my company. I saw “Tom” guides dropping groups that were too small, I saw them make up answers to questions they had no idea to, and I saw wages for qualified tour guides in the city go down so far that many good ones just left for other jobs. What the tourists do not know is that the “Tom”-system lives on the reputation of good companies, waters down the quality from below, making the same money and squeeze out the market; ten more years of this, and people will wonder why there are only foreign students abroad telling you goofy stories rather than the actual history of these places. It’s like offering food for tips only, and then wondering why no organic farmer wants to sell their food under these conditions anymore. A good tour requires an enthusiastic, educated guide. You don’t get these “for free.”

  49. Ha, Laura, just try competing a market when one rich competitor is flooding the market, giving the main product away for free, paid for by exploited young labour. Good luck fighting that. I assure you, the good experienced guides are giving up and going somewhere else. This McTours for the mass tourism age. Yeah but McTours taste good- until you get a look at what is going on in the kitchen. Remember, your kids will have to work tomorrow for the companies you support with your custom today. Think about it.

  50. Hi Laura, don’t buy it. Check out http://www.sandemans-new.com/press_new.html, for an update. A Berlin Guide and Another Berlin Guide are completely inaccurate in much of the commentary: Tom is super rich? BS. Tom’s best guides work for other companies? Try their worst guides…the best guides are rolling in tips becasue…they’re great! The ‘whistle blower’? He works for a competitor, as you guessed. Why can’t people work as freelancers? It’s normal practice across multiple industries. The 2DF story, which is full of mistakes and untruths (Weekly Night News? More like To Catch a Predator, Frontal21 is know for trying to ‘build’ stories), assumes the guides are employees…but they’re not, they’re freelancers. And hence the report is totally off-base.

  51. Yes, “Toms” can go back to work and exploit young people and undermining the tax-system. But if you “Yet another Berlin Guide” say its all not true, so why was “Tom” running away from the camera. He had a fair chance to say his point of view. And now he tells its all lies? One of the partners of “Toms” is company standing for fairtrade. The should see what happends inside “Toms” company.

  52. I was reading all the notes here. Sorry my english is not the best. But for what i know. The illegal thing in this company are: People from not-Schengen-states need a residence permit. A good way to get one is, to have a work contract. People working for “Toms” get such a “contract” but the don´t get a salary and no social insurances. Some of the guides don´t even have a health insurance, what is illegal in germany. So there are already 2 thing illegal. The other thing is that “Toms” guides just work for this company, sometimes 14 days in a row and sometimes more. 80% of these guides work just for “Toms”, so they are NOT freelancers. In Germany we call it “Scheinselbständig”. The company is forcing they guides to sign contracts, so the guides are not allowed to work for another tour guide company. If, they have to pay 2000 euros. To understand the system of a freelancer, mr. “Tom” has to know, that HE is the customer of the guides. He can force them just to work for him. Thats illegal too. So he is forcing people into llegal freelancer structures, not paying any insurances.

  53. This is what “Toms” says: This is extremely misleading. SANDEMANs NEW Europe employs over 50 full-time staff members, who all receive a wage, holiday, health insurance, and social insurance. As is standard with tour operators and city tour companies across Germany and Europe, SANDEMANs NEW Europe maintains a freelance relationship with some tour guides.” The biggest lie i have ever heard. But where fired every 3 months, so no chance for social security. 12 secretarys in one year. Guides for just a season. Bad quality and just money-making. He lives on a different planet

  54. Thanks for the insider info, extom. IMO Tom’s press release fails to address the charges against him and is lot of impotent chest beating. Sounds like Tom doesn’t realise how serious this is. There are currently two threads still debating the German TV allegations: http://groups.google.com/group/rec.travel.europe/browse_thread/thread/50c73ff665c5b3b9/59dde4a8dc258ffe?lnk=raot&pli=1 Hopefully more extoms will also share the facts as they see them there. And people in the hostel industry can comment on: http://www.hostelmanagement.com/forum/f5/sandeman-s-free-tours-german-tv-2843.html

  55. Some years ago the “Pay-in” was 1 Euro, later 2 Euros, and since 2 years 3 Euros per Person (for marketing costs…). If some don´t understand why still people work there, they have to know: The job is great! I loved to do tours, but at the same time it was kind of scary to work there, because of “Tom”. People got fired, because of no reason, it was just a tactic to keep the “freelance-employes” quiet. A lot of people come from Australia, New Zealand, USA, Chile, Argentina and so on. Its hard for them to find a job, where they first don´t need german (for example). So to keep the job, you just don´t say anything and sign these weird contracts (what scares you more, because you don´t have any clue about the system here, and you trust the company). Its hard for the guides to leave. We have to show them other possibilities. The other tactic of “Tom” is, to say that the guides are responsible for all the things happening, and that his lawyers will “help” the guides. The other thing is, that no one realy knows how to do the tax return. That brings the guides into another problem, because they know that the whole system is illegal. They cannot afford a lawyer, like “Tom” can.

  56. This is either stopped now, or it becomes the future, perhaps the only future, of tourism. If you got Tom’s response to the German TV allegations, at the bottom it says: COMING IN 2010: Barcelona – Brussels – Florence – New York – Rome –Tel Aviv If you know guides in these cities, make them aware of what’s coming, before it’s too late. If their city won’t do anything to stop this rapacious business model, you might advise them to get out of the tourism and save themselves some heartache or having to work for Sandeman themselves

  57. One other thing is, that you can get some money back, if some of the tourists of the free tour will come on a paid tour. If more than 50% of the free tour tourists will come on a paid tour. But if your “repeats” are below 20%, then you are in the “red zone”. That means less tours or no tours, or just off the schedule. So on one side you pay 3 Euros per person and on the other side you have to promote the paid tours. That makes a lot of pressure.

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