Jul
17
An Alternative Business Model: No Prices
Filed Under Politics
There are a few restaurants out there that have been running on a new business model - no prices. I have selected three that exemplify the idea under different philosophies. The first restaurant is ‘Just Around the Corner’, a London Restaurant in operation for more than 17 years; the second is called ‘Babu’, a New York Restaurant, running since year 2000; the third is called ‘SAME’ (Acronym for So All May Eat), a resturant in Salt Lake City, open since 2003. So how did these three restaurants make their statement with an alternative business model?
Restaurant 1: If you have to ask, you can’t afford it.
Here’s what the owner of Just Around the Corner says about this alternative business model:
In a cheaper area the restaurant wouldn’t survive because people wouldn’t pay the money I expect and in a busier, more central area, we couldn’t build up the trust.
The model is built off of trust - a trust that people will pay what the food is worth. For this restaurant, a “price” actually exists even if its not explicitly stated on the menu. So if you can’t afford to eat there (which is about 20 British pounds a person, or 40 USD), well, they also have a way of telling a customer they don’t belong here:
We just thank them nicely and give them their money back. These people know they don’t belong here, they try you out and by giving them their money back nicely, you ensure that they never return.
There is a certain anxiety to people when they aren’t told how much they have to pay. This is where the customer has to pass a value judgment on the product that they receive; however, they do not want to offend the seller. In this case, the seller makes a profit off of this anxiety… with a friendly smile.
Restaurant 2: Now I know how much to charge.
The second restaurant, Babu, was using this model temporarily for research. Customers were told to pay what they thought the meal was worth so that the owner can see where she can improve in her service and quality. Again, geared for profit, the restaurant owner wants to ensure a good quality and service for customers.
The results of the research was not surprising - only some of the results were useful and valid. A lot of people got free meals out of it. The rest of society gave what they could afford, while the useful statistics gave meaningful advice to the owner.
Even she felt a little awkward when the time arrives for payment. Sometimes she felt some customer were overgenerous, other times she felt the self-consciousness of the customers when they weren’t given a standard ethic to follow (a price tag).
Today, her business is still running, and now the menu comes with prices. She has learned how to run her restaurant, as well as a few things about social economics.
Restaurant 3: So All May Eat (Literally)
The third restaurant, SAME, has come out with a bold vision to feed everyone as they are the “same”. People can pay what they want, what they can afford, and even donate their labor to scrub pots and pans. Ultimately, having a meal is affordable to anyone in the area, and the owners of this restaurant feel that’s the change they feel passionate about.
A non-profit organization, the owners have been able to maintain their restaurant with the amount of traffic they receive. It maintains a status of a non-profit organization. People of all sorts of varieties come in and gather at the small restaurant - teachers, neighbors, friends, children, homeless… it builds a stronger community for the town and promotes an equality between them all.
The owner admits that it takes a certain amount of faith towards humanity, and the restaurant is a kind of church for him to go to. His philosophy is “be the change you want to see”.
Conclusion
It was interesting for me to hear about the no price model. Today with standard pricing, many consumers cannot explain the reason for outlandish costs on goods that everyone should have - food, gas, housing, etc. And most people have anxiety towards the future of prices - will we not be able to afford to live someday? Prices determine who gets what in this world, and who decides who has the right to eat and who should starve?
To barter today, we would think it would lead to all out fist fights, mean-spirited sellers, and the rich inflating prices. Back in the primitive era of pre-capitalism, everyone was already self-sufficient and everything was always negotiated. Here in the no price model, we can see different ways that the no price model could work when implemented in today’s society. With anxiety, we can see that it is no different from our capitalist model, separating people by a price; with love, we can see that it builds a stronger community and promotes equality.
Technorati Tags: alternative business model, no prices, bartering, negotiate prices, distribution of normative goods, social economics, community building economics, just around the corner, babu, same so all may eat, no price restaurant
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