We can't ignore the (sad and backwards) social stigma that trans-women face, where a waitressing job, or any public-facing job, is difficult to apply and be accepted for.
If it's the former, I can understand the reactions of people, it just looks weird; of course people are going to have apprehensions of hiring someone who does dresses like the opposite sex for a public facing job.
Thanks for asking the question respectfully, I really do like explaining things to curious (although I caution you I'm almost alone in this; please don't make a habit of unsolicited questions to trans people! But for better or worse, I love to talk about myself, so let's use it to spread some understanding and peace for the holidays!)
First draft:
most johns are after a so-called 'shemale'
Second draft (removing redundant quotes, following writing advice of Bill Zinsser)
most johns are after a so-called shemale
Third draft (shorten that sentence! Tighten it up!)
most johns are after a shemale
....Fourth draft (after walking away and coming back to my writing, suddenly hearing it): most sex-industry customers are after an MtF no-op transsexual -- a 'shemale', in the derogatory parlance of the industry.
I'm partially asking because I'm curious as to what is the term preferred by the transsexuals, and partially because I feel that words are descriptive and hence void of emotional connotation, which should instead be inferred from the context in which the words are used.
FFS: Facial feminization surgery
SRS: Sex reassignment surgery
HRT: Hormone replacement therapy
TLA: Three letter acronym
Some trans people only think it, some take supplementary sex hormones (typically testosterone for FTM; and one or more of the female hormones, and possibly also anti-androgens for MTF), and some have surgery to give them parts that match their identities.
You're thinking of cross-dressers, which community has some overlap with the trans world, but is, in general, a different thing. Cross-dressing is generally also a kink, while being trans is an issue of identity.
It makes less open-minded people uncomfortable, to be around others who are not like them. This is what I mean by 'unfortunate': that not everyone is comfortable in the face of different.
Perhaps more relevantly, it makes less open-minded people uncomfortable to be around others who don't fit their mental model of the world.
If you bit into a steak and found that it tasted like chocolate, you'd be confused and disturbed. Now multiply that feeling by a large factor.
The only reason to be possessive about someone else's sexuality is insecurity, I think. Which can be very visceral, too, and loves to camouflage itself.
I (obviously) support equal rights and access to life saving hormones and surgery for transsexual people - since I am one myself. Yet, from my elementary knowledge of evolutionary biology, it's long been my suspicion that there is some sort of deeply rooted antipathy towards trans people that is not completely socially constructed. After all, having sex with a trans (pre or post op) person in modern times, or an intersex person (modern or historical times) would seem to work against propagation of someone's genes.
Still, the bigger causal factors in transphobic sentiments are, I believe, socially constructed and rooted in patriarchal misogyny. There are way more (cis) men with violent, transphobic attitudes against trans women than there are (cis) women with violent, transphobic attitudes against trans men.