Are people inherently good and honest?

[livendive 8]

A new coffee shop owner in Kirkland, WA seems to think so.

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A Kirkland cafe with no prices
By Amy Roe
Seattle Times Eastside bureau

With its blood-red walls and black leather sofas, Kirkland's Terra Bite Lounge looks like any other coffee shop — until you get to the menu. There are no prices listed. Terra Bite doesn't have them.
You read that right: No prices. Customers pay what and when they like, or not at all — it makes no difference to the cafe employees, who are instructed not to peek when people put money in the metal lock box.

"Does it really matter to any of our patrons ... whether they pay a dollar or three dollars or five dollars?" said Terra Bite founder Ervin Peretz, a 37-year-old Google programmer.

He doesn't think so, at least not in the comfortable lakeside enclave that is downtown Kirkland.

Through his "voluntary payment" cafe, Peretz is poised to become the Robin Hood of the Starbucks set. Using an efficient, low-overhead business model and narrow profit margin, he figures he can finesse the largesse of well-off latte lovers to cover the tabs of the less fortunate.

The idea emerged during a booze-fueled debate in a Saigon bar, where Peretz and a colleague had traveled to blow off steam after a period of long hours at work.

Peretz argued that people are essentially good, but can be influenced by their environment. If people see good, they'll be good.

In November, he set out to prove his point, leasing a $4,000-a-month retail space in a new mixed-used building at Kirkland Avenue and State Street, dropping "in the low six figures" on startup costs and hiring his girlfriend, Susie Allsup, to manage the place, along with one part-time employee.

The name Terra Bite (www.terrabite.org) is a play on the tech term "terabyte," a trillion bytes, as well as a reference to earth and food.

More than coffee, sandwiches or even convenience, Peretz is selling good karma.

"People want something different. They want simplicity" of payment, he said. "They want to be taken to a new place, and they want to contribute to something."

Just how much they want to contribute is another matter.

While charities like the Boomtown Cafe in downtown Seattle charge $2 for Saturday brunch or let people exchange work for meals, Terra Bite is a for-profit business, and Peretz refuses to suggest prices. Each day he records how much was sold and how much was paid.

So far, Terra Bite has served up to 80 customers per day, averaging about $3 per transaction, he said. When the shop brings in a steady flow of 100 customers a day, Peretz figures, he will more than break even.

But will new customers pay, let alone pay it forward?

Even without posted prices, "social monitoring" — the feeling that others are watching what you do — can enforce payment, said Erica Okada, assistant professor of marketing at the University of Washington Business School.

With its anonymous drop box, Terra Bite has minimized, if not eliminated, that effect. Under these circumstances, Okada said, the economic model predicts that Terra Bite customers won't pay anything.

But they do.

On a recent Thursday afternoon, Tonja Maciolek told the barista to charge $4 to her bank card for her bagel with cream cheese and coffee. She said she's a patron because she's sensitive to price and would prefer to name her own, even if it ended up being the same.

Kate Lewis, a 17-year-old high-school student who often hangs out and studies with friends at the cafe, said she would actually pay more than the going rate for her double-tall latte because she admires what the business is doing.

"It's kind of like a social experiment," she said.

Lewis is skeptical voluntary payment would work in larger, more anonymous places like Seattle, but in Kirkland "there's a social standard."

Unwritten as it is, the standard helps Terra Bite extract a psychic price.

Chris Allar, who lives nearby, said every transaction at the cafe forces him to do some mental math, and a little soul-searching.

"It's always hard to see if you paid too much or too little," he said.

Allar put in $3 for his 12-ounce chai tea latte. The anxiety, "a feeling of did I really pay enough," was free.

Peretz admits that Terra Bite treads on shaky ground. He's got to attract enough paying customers to cover the cost of those who pay less or not at all.

Peretz isn't worried that people will abuse Terra Bite. There's enough money to fund the honor system, and enough honor, too, he said.

What does bother him is the prospect that customers might become cynical and think Terra Bite is just a gimmick, and that he's insincere.

All he's really trying to do, he says, is skim the froth off the high-end economy and spread it around a little.

Besides, he added: "If it turned out that 20 percent of the population were dishonest, we could just put in a cash register."


Amy Roe: 206-464-3347 or aroe@seattletimes.com

So where do people think he'll be on the issue in 6-12 months?

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[Richards 0]

He means well but I do not think he will find people as honest as he expects. People may not always skip on the bill but will they actually pay a fair price? I doubt it. Blind tust just begs for abuse.

My biggest handicap is that sometimes the hole in the front of my head operates a tad bit faster than the grey matter contained within.

[kelpdiver 2]

a large majority will pay what they perceive the value to be. If you use more expensive ingredients you may not be compensated for it. They'll pay what they expect coffee and sandwiches to cost.

To make money at it, I think you need to be very cost conscience.

[masterblaster72 0]

Could work if they get a clear-cut abuse policy in place. All it would take is a few compulsive larders with nothing better to do than to take advantage of the "give if you will" payment policy and eat half the inventory on a daily basis to f.ck the whole thing up.

Be humble, ask questions, listen, learn, follow the golden rule, talk when necessary, and know when to shut the fuck up.

[n23x 0]

I would abuse the hell out of that place, right into the ground.

It's a nice warm feeling idea, but he is poised to be taken advantage of, big time.

.jim

"Don't touch my fucking Easter eggs, I'll be back monday." ~JTFC

[quade 4]

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Are people inherently good and honest?

A person might be. People aren't.

Wanna know what people are like? Look at anything on the internet that is anonymous. THAT will show you the true nature of people.

quade -
The World's Most Boring Skydiver

[kelpdiver 2]

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Wanna know what people are like? Look at anything on the internet that is anonymous. THAT will show you the true nature of people.

But that's because it's truly anonymous. In public, and even over the phone, people won't show those true colors. Pre election polling always shows more support for minority candidates than is reflected in the results - people don't want to sound racist even to complete strangers.

At a buffet line, which effectively is what this place is, I think most people split the difference between what they want and what they think is appropriate. I guess we'll see how long till someone does eat all the lox.