Sunday, August 26, 2007

The classic free rider problem

Since when is it a crime to make money? The public wi-fi movement is a prime example of the classic free rider problem. Why should private business subsidize consumers with "free" wi-fi when the latter are less than willing to buy the goods and services and more willing to hang around? This is an abuse by the "creative class" that thinks it's entitled to "free" goods. Remember there's no such thing as a free lunch.
It took Alvin Tsang a half hour and about $50 to set up a wireless network at cafenation, a coffee shop he runs in Brighton center.

He needed web access to place orders, and since he was creating a network for his own use, he decided he might as well share it with his customers. For free.

"I can't imagine charging people for it," he said.

But there are plenty of people who can.

Tsang and a couple dozen shop owners in the city provide free wi-fi to customers. But there are still others asking for a few bucks - as much as $6 an hour at Starbucks - to surf the web.

According to some IT professionals, those businesses are making easy money.

"It's ridiculous," said David Friedman, president of Boston Logic, an IT firm.

An Internet connection that can handle the traffic of a cafe costs about $200 a month, explained Matthew Geaney, development director at Wizard Computers in Stoughton. If technicians were hired to set it up, that could add another one-time charge.

"But we're talking less than $1,000," he said.

At Starbucks, it costs $6 to log on to the network for an hour; $9.99 for 24 hours and $39.99 for one month.

"Even if they're only getting 10 people to pay for an hour each day," Friedman said, "they're still making at least $300 or $400 a week."
A commenter on this piece sums it up perfectly.
One of the reason people charge is to move customers along or if they do not move along to make some money.

People who use such places as offices or study libraries are known to get a small coffee and sit for hours. So a table taken for 6 hours makes only $2.00 (minus internet and electricity cost, so it might actually be $1.20). Which in reality in 6 hours it could be turned over 3 to 4 times at $10.00, should be making the owner $30 to $40 in 6 hours, at the very least.

I have seen the entitlement of customers (yes I work in a place that offers free Wifi, though it was never meant to be an internet cafe. Just a cafe that offers free internet.) who seem to think that it is okay to spend all day for a minimal purchase. Even worse the "customers" who want to use the free internet, take a table, ask for a glass of tap water and take out food that they brought from home or another establishment. I kid you not. Exact quote: "Why can't I? You don't sell sushi that is why I brought it here." Tell the sushi joint to get Wifi.

I think if Menino ever gets the city wide Wifi (though I am suspect) installed inthe City of Boston, all restaurants are going to have this issue. People who want to sit for hours, but not buy something till later, "I am not hungry right now." To people who kill any lively atmosphere in an establishment with their laptops, IPods and annoyed looks towards anyone around them that might be having a conversation that interrupts their work.

In theory I think offering Wifi is great, but the entitled people who abuse it ruin it for the owners and the other customers.

No comments: