New Haven, Conn., where I work, is angrily abuzz over the opening of a new café that serves only those with a college ID. The customers who visit Shiru may be students or they may be faculty, but they must have some official connection with Yale University or another local institution of higher learning.
This is the Japanese company’s third U.S. shop [A Providence location opened last year], and a lot of people around town are upset. Words such as “fairness” are in the air. Some are openly wondering whether the restaurant’s restrictions violate state or federal law. There has been talk of boycotts.
Well.
I doubt that I’ll be dropping in anytime soon – hanging out in coffee shops for hours on end isn’t my thing – so let me say a few unbiased words in Shiru’s defense.
In the third place, people affiliated with, say, Yale – which limits nearly all of its dining halls to its own students, faculty and staff – are ill-placed to complain of unfairness because a private restaurateur thinks there’s a path to profit by mimicking the practices of the city’s largest employer. In the second place, absent an invidious discrimination, a private company may generally choose customers however it pleases. It’s this simple libertarian proposition that permits restaurateurs to turn away patrons whose political affiliations they happen to dislike.
And in the first place, Shiru’s business model is a clever one, and might be the wave of the future. Once a student is admitted, the coffee is free and the food is sold near cost. But to prove the college connection, students must download the café’s app – a process that in turn allows the business to sell the information they voluntarily provide.
Shiru isn’t some relic of a reactionary past. It’s the future.
In other words, Shiru is not a café at all. It’s a business that trades free coffee and cheap food for data students provide about themselves, including majors.
Now, I hate to get all willing-buyer-meets-willing-seller, but it’s hard to see exactly what makes this arrangement objectionable. The reason Shiru closes its doors to those without university connections is that their data simply aren’t as valuable.
Valuable to whom, you might ask? By its own description, Shiru exists to promote networking, and the firm’s website lists an impressive group of “partners,” from Microsoft to Accenture to SoftBank. The manager of the New Haven store put the matter succinctly: “We’re more of a recruiting location than we are a business.”
Except that this isn’t exactly right. Shiru is a business – a recruiting business. It’s like a college placement office, but for profit. Shiru helps employers find students they want, and vice versa.
We might be angry that data about some people is more valuable than data about other people. But calling a fact unfair doesn’t make the fact less true. Of course, data about those seeking degrees is more valuable than data about those who aren’t. Otherwise, higher education is selling a pig in a poke.
We might also worry that Shiru discriminates among customers. But so does Yale. So does every college. Shiru makes money by screening its patrons according to the standards used by educational institutions in the areas where it operates restaurants. More to the point, it’s piggybacking on the work of college admissions offices. But so do the employers who flock to campus for official interviews organized by the schools. The only difference is that colleges can’t control the process.
We live in an era when the returns to cognitive ability have never been greater. Colleges exploit those returns to stay in business. So does Shiru. That’s why I expect the business model to have emulators. Shiru isn’t some relic of a reactionary past. It’s the future.
Stephen L. Carter is a Bloomberg Opinion columnist and a professor of law at Yale University.
