As a warning, I'm one of the .0354% of Americans who have never ordered anything at Starbucks Corporation (NASDAQ: SBUX). Maybe it's the fact that I find the whole idea of a chain of "neighborhood coffee shops" with jazz music and local art a little tacky. Perhaps it's the personal finance writer and penny-pincher in me that doesn't want to spend that amount of money for a cup of coffee. So be warned: I've met people to talk in Starbucks several times but I've never actually bought anything there. When I write about Starbucks, I do so from the perspective of a skeptical non-customer rather than that of a latte-sipping fan.
Starbucks currently charges $6 an hour for in-store access to the Internet through AT&T's T-mobile service, compared to McDonald's which charges $2.95, and Panera, which will let you go on for free. This raises a question: Is Starbucks making itself less competitive by charging for the Internet, or is Panera stupid to give away a service people would gladly pay for (as evidenced by the large crowds at Starbucks)? From a business perspective I think makes sense to charge, if only to keep tables from being taken up by people who buy one cup of coffee and then freeload on the Internet access for two hours (or am I the only person who would actually do that?).
Do you mind paying for Internet access in restaurants? Would you be more likely to frequent a cafe that lets you on for free?











Reader Comments (Page 1 of 1)
3-05-2007 @ 2:18PM
Warren said...
Making me pay for wireless is an insult to me as a customer since it costs them nothing to provide it (outside of a monthly cable modem bill which around here averages around $40).
From their point of view, I know they want money for the time I'm in the seat and they don't want me sitting there all day.
I think in practice you would find very few people willing to weather the stares of the employees as they sat there for hours on end leeching off the free internet.
3-05-2007 @ 1:46PM
Warren said...
Making me pay for wireless is an insult to me as a customer since it costs them nothing to provide it (outside of a monthly cable modem bill which around here averages around $40).
From their point of view, I know they want money for the time I'm in the seat and they don't want me sitting there all day.
I think in practice you would find very few people willing to weather the stares of the employees as they sat there for hours on end leeching off the free internet.
3-05-2007 @ 8:16PM
Hiten Parmar said...
"AT&T's T-mobile" ? Are you serious? T-Mobile is not friends with AT&T at all.
3-05-2007 @ 4:10PM
restaurant gal said...
Internet is generally not free to the cafes and restaurants. My research says that its about 3k to install and a hefty monthly charge. probably Starbucks paid less as they charge the consumer, and the money mostly goes to the Internet provider.
How sad that u feel its OK to sit in their space and purposely not order anything. The small percentage of cheap and bad customers like u, make restaurants have to charge everyone more to keep profitable. As a business person who wants to make money, I feel it is unethical for u to use their facility and purposely buy nothing. Just because they say nothing, you r wrong to do it.
3-05-2007 @ 4:09PM
Amey Stone said...
commenter #2 is right. T-mobile is actually a subsidiary of Deutsche Telekom AG & Co. K.G. (NYSE: DT), according to its web site.
3-05-2007 @ 4:10PM
Ellen said...
I search out Panera's because of the free internet. I also think their food is great. By the time you inish paying for the internet and a coffee at Starbucks you can get a whole meal at Panera's!
3-05-2007 @ 4:56PM
sarah gilbert said...
Here in Portland, Oregon, it's common for independent coffee shops and restaurants to offer free wifi, so to have to pay for it is an outrage -- hence, I never use Starbucks for working, only for the occasional latte or breakfast sandwich when the kids insist. However, I think that Tmobile customers who are paying for monthly service are the most frequent users of Starbucks' wifi; the $6 per hour is only for the desperate!
3-05-2007 @ 9:37PM
Steve said...
I work for Starbucks and let me tell you something, the money that you pay for the wifi connection has nothing to do with Starbucks They only act as a host for the "T-Mobile Hot Spot"! You can't even pay for the service at starbucks. you have to pay with a credit card online with T-Mobile. It is the same as any other "T-Mobile Hot Spot" So get your story right before you decide to have it published on a website!!!!
3-06-2007 @ 12:15PM
Georgia O'Neill said...
I don't drink coffee so I don't frequent Starbuck's but have researched the company's practices as my son works for them in Seattle. While no more perfect than any other company, Starbuck's provides great, fair and affordable benefits to both part-time and full-time employees. But let's not forget they are in the business to make a profit. Clothing retailers have an exorbitant mark-up but you wouldn't try on clothes and wear them for several hours... well, maybe YOU would.
3-07-2007 @ 8:00AM
Jim said...
Yes - I pay T-Mobile for the service not Starbucks. I think Free internet is a great thing from a customers perspective - however not from a business perspective. Do you think you would EVER find a place sit in a Starbucks if the wifi was free? Panera offers FREE - but their seating is about 4 times what a Starbucks offers.
3-07-2007 @ 7:57AM
THE TRUTH said...
A long time agao before most places had wifi Starbucks made a deal with TMobile. That TMobile would be their internet provider. It doesn't have much to do with Starbucks... I think Starbucks pays for the internet service of DMs and anyone higher up. Starbucks partners do get a discount if the sign up for TMobile.
3-08-2007 @ 12:10AM
Anuj Rathi said...
SBUX ges a very small percentage of money that the users pay T-mobile. The concept of T-mobile is very good because for a LOW monthly fee of $30, it lets you use unlimited internet at 8366 U.S. locations include Starbucks coffeehouses, Borders, FedEx Kinko's, Hyatt Hotels and Resorts, Red Roof Inns, Sofitel and Novotel Hotels, the airline clubs of American, Delta, United and US Airways, and select airports.
They also let you roam across the world or a very low fee.
I think Starbucks made a good decision of teeming with T-mobile instead of creating their own wifi network.
People love to advertise $6 a day at SBUX, but you need to realize that most people who use internet at SBUX pay the $30 monthly fee, which works out to only $1 a day and which gives you access to all of the above mentioned places.
I agree, it may not be the best deal for the people who visit or hang out at SBUX for a few hours a month, but for the daily customers like me, its a great deal.
3-11-2007 @ 10:55PM
Kitty said...
Ok here's the deal. A bottle of beer at nice restaurant cost me $4.50 I can buy a whole 6 pack for that if I want to sit home by myself in front of my TV and Drink it. HELLOO, HELLOOO, YOUR NOT PAYING FOR THE COFFEE your paying for atmosphere. I could make pizza cheaper at home, but my kids like Chuckie the giant mouse. I could make wings much cheaper but my man would rather have a hooterfic time. The GOLDEN ARCHES HAVE A CLOWN AND A PLAYLAND and give a little prize in the Happy BOX. A bottle of water at the theatre cost me $3 last weekend. I could go on all day here but I think you might get the point. This is a trend. Did you just now notice?