This is interesting

A restaurant with a ‘pay what you want’ philosophy is facing closure because its customers are forking out less than $3 a meal on average.

No, it’s not just because it is vegan.

There was a bit of a flurry a few years back, economists noting that people, when asked to pay what they thought something was worth, were quite generous in their estimations of what it was worth.

This showed that we’re all caring sharing beings and thus socialism or summat.

My own reading is that we’ll be nice and kind occasionally. Often even, but not when the entire system allows us to not to be. At that point short term self-interest will take over. Which is why the or summat economic systems don’t work in the long term.

You really can get people to pull together for some great purpose for some period of time. You can’t exclude the normal price system for long periods of time though. ‘Coz people is peoples.

Another way to put this is that altruism most definitely works. But not over long periods of time with strangers. The people who manage that we end up calling saints.

41 thoughts on “This is interesting”

  1. I expect even people who are fairly trying to pay what they think a meal is worth are vastly underestimating the costs involved in getting food onto the table.

    If you can make (IDK) a lasagne yourself at home for a fiver, it should probably cost12 in a restaurant, assuming their economies of scale re the ingredients.

    But your average punter probably thinks £12 is a rip off, because he doiesn’t think about rent, rates, staff, wastage etc.

    This would probably go double or treble for vegans, who tend also to be of the ‘all profit is evil’ school, and who have usually been wallowing in Guardianista drivel about overpriced this and that since they could first read.

  2. Its fucking funny though – a bunch of lefty twats prove that other lefty twats are cheapskate freeloaders 🙂 🙂

  3. People will want to pay as little as they can without forcing the owners to close. The longer it’s stays open the less they will pay because it was able to stay open when they paid the higher price. The only person who knows how much is needed to stay open is the owner. Hence the proper decision should be, this is how much it costs to eat here: you decide if you want to buy at that price.

  4. @Interested

    Quite.. most people, having never been tought, nor required to think about, the economics of a business, have no concept of what it costs to run a restaurant and what the punters are actually paying for.

    This story, mind, might just show that Sydney people are mean fucks. There are three or four of these restaurants in Melbourne and I understand that they’re doing ok. They have a few different pricing models, mind… it’s not all ‘pay what you like’ But, of course, the success of these places alerts the freeloaders and/or the people who really can’t afford a decent feed. They’re, in time, going to outweigh the number of nice middle class people who will pay over the odds… not least because they’ll visit far more regularly.

  5. There used to be a restaurant just around the corner from me called, as it happens, Just Around the Corner. It operated on the same principle. I went only once, and was quite impressed. Pretty sure I paid well over the odds, though. Not because socialism, or summat, but because of the self interest of not wanting to be thought cheap! Which is why I did not go back: I knew I’d do the same thing again, and I did not want to be put in that position.

    The restaurant closed a year or two later.

  6. @ Jim

    It proves nothing about ‘other lefty twats’. Anecdotally, one of the places in Melbourne had their biggest gripe with Euro gap-yah types… who might be experimenting with henna and sarongs for a bit… but will all go back to the South East and vote Tory.

  7. @E lud, I went to that place a couple of times (it was late 80s/early 90s) and I felt exactly the same way as you!

  8. A better model for all concerned is the “all you can eat” one. There used to be one here where 3 or 4 helpings of trifle (you can age me and it by that) was the norm for me.

  9. @The Thought Gang

    Nope, from long experience the poshest twats in the SE do tend to be lefties.

    What @Jim said holds up.

  10. Its fucking funny though – a bunch of lefty twats prove that other lefty twats are cheapskate freeloaders

    Indeed, and as Tim Blair points out, this is in an area where the median house price is $1.3m!

  11. This would probably go double or treble for vegans, who tend also to be of the ‘all profit is evil’ school, and who have usually been wallowing in Guardianista drivel about overpriced this and that since they could first read.

    Plus they’d be fully supportive of minimum wage laws (including Australia’s notorious “penalty” rates) and other regulations which drive the price up.

  12. @TTG

    ‘It proves nothing about ‘other lefty twats’. Anecdotally, one of the places in Melbourne had their biggest gripe with Euro gap-yah types… who might be experimenting with henna and sarongs for a bit… but will all go back to the South East and vote Tory.’

    I dunno if you’re English or Aussie, but most middle class English kids (in my experience) seem to be Corbynites these days. My kids’ mates (all highly MC and attending very good schools) are a case in point (my kids are obviously an exception).

    They won’t vote, however, as they’re all extraordinarily lazy fuckers.

    Which isn’t surprising – if you’re lazy you want everything FOC/effort, and Corbyn’s promising you this, together with a nice helping of blame-other-people for your own parlous position.

    This is the one single reason I’d consider bringing back some sort of national service – get these fuckers off their arses and show them what hard work is like by walking them up and down Pen y Fan in the rain a few times. It builds conservatives.

  13. @Interested

    “But your average punter probably thinks £12 is a rip off, because he doiesn’t think about rent, rates, staff, wastage etc.”

    Yes. We all remember the “how can Starbucks charge £2 for a coffee when coffee beans cost pennies” morons. Outright, basic stupidity like this is extraordinarily prevalent.

  14. Plus, of course, in my general experience Lefties are tight fuckers who are only ever generous with other people’s money.

  15. @ Interested
    I presume you mean “in full kit carrying 15 kg or so in the rain”. Walking up pen y fan unencumbered isn’t that hard as #1 son did it when he was 6

  16. Walking up pen y fan unencumbered isn’t that hard as #1 son did it when he was 6

    It’s the surprise encounter with a bog *on top* of the mountain which sets it apart.

  17. Who, in christs name, wants to eat at a lentil themed restaurant? Neil from the Young Ones is the only one I can think of and he’s 1)only one bloke 2) fictitious.

  18. @john77 it depends how quick you do it, and how often you do it. But if you want them carrying bergens yes, happy to do that. I don’t think 15kg will cut it – more like 40kg. Let’s just run the fuckers up and down it until we run the stupid out of them.

  19. I recently bought Ronald Jenkees back catalogue on Bandcamp. It had a pay what you want feature. I paid more than I needed to because I want to encourage him. It made me feel good. It was not at all a selfless act.

    I can sort of imagine that the restaurant customers would want to pay enough to make sure the restaurant stayed in business, for selfish reasons. I can imagine that such a scheme could be made to work. Perhaps they needed to apply some game mechanism, like putting up a sign showing income vs. costs in the restaurant so people could see how much was needed. I have seen software and web projects run on donations using such a technique.

  20. PS – Humble Bundle does the same thing for indie computer games. Not really sure how that works, or how well the developers do out of it.

  21. Restaurateur blames customers for failure of stupid business model.

    Incidentally I am highly suspicious of the proliferation of ‘not for profit’ businesses, often of the fair trade yoghurt-weaving type, where virtue-signalling monkeys are the target customer. Not for profit makes them sound fluffy and nearly a charity but the owner still takes a tidy salary.

  22. And yet Patreon-funded writing and podcasting and things continues to be a successful model.

    Because the marginal cost of a freeloading listener or reader is nearly zero, so if you can get 10% to pay occasionally and 1% to pay regularly, then you can cover costs assuming a decent-sized audience.

  23. “Incidentally I am highly suspicious of the proliferation of ‘not for profit’ businesses,”

    There was a chap on the radio this lunchtime who ran a website giving free advice about parking fines. He said he had been approached several times to sell his site, but he wanted to keep it free for users.

    My first thought was: how the hell does he afford to eat?

  24. Yes I think I remember an article a few years back- serve your self bakeries in the west coast of US and they seemed to do quite well. But Tim’s explanation is a good one for why they aren’t everywhere. In practice they are doing price discrimination without the product diffferentation. Fess up to where you are on the price curve and pay that please. But even though price discrimination often works on quite superficial differences… people still need them to pay more than bog standard.

  25. Bloke in North Dorset

    @Interested,

    When my brother was a chef he told me that the ingredients are 30% of the price.

  26. I recall reading that 90% of restaurants close within a year of opening, and that they charge a 65% mark-up on booze (in Blighty).

    Assume those two things are true, it’s the only explanation for a chocolate pudding I saw R Blanc create on the tellybox. It was exquisite. He spent six months perfecting it. And sold it for about £14 a pop.

    £14?

    £14!

    Plus the occasional £10,000 for a bottle of 1963* Petrus, I suppose.

    * minus points to the first plonker who says, “I prefer the ’61 myself…”

  27. Bloke in Wiltshire

    Rob Fisher,

    The smart thing with the Humble Bundle model is the (very good) bonus games if you pay over the average. It has the effect of raising the donation.

    The other thing with all of this that is crucial is audience. i know a soprano who put on a concert to raise money to go off to one of the conservatoires with a £10 suggested donation and she raised far more. That’s what opera goers are like. The best paying Humble Bundle customers are Linux users.

  28. Bloke in Wiltshire

    Edward Lud,

    Is that the coffee cup? That’s astonishing.

    I’ve often wondered if there’s a term in economics for how restaurants work… where they make the thing you look for cheap, but make money from something else. It’s like shops that used to sell DVD players at no profit to make money on expensive leads and accessories.

    And of course, some apps are free, but if you want to change your characters hair colour, you pay a quid.

  29. @BiND – yep I have heard the same.

    I bought eggs and a jar of lemon marmalade from an honesty shelf outside a house in Miserden this very weekend gone. But that’s (me and) Miserden – wonder if it’s harder to operate that sort of system in a city?

  30. Bloke in Costa Rica

    For every quid a meal costs in a restaurant you can assume about 20p goes on ingredients and 30p on labour. Then there’s rates, gas/electricity, supplies, CAPEX, maintenance, paying off the bank loan, the bookkeeper, taxes. The owner clears about fivepence. So if a meal costs you a fiver in ingredients, a restaurant is going to need to charge about £25. They have economies of scale, of course, and might be able to make a given meal quicker than you because they know what they’re doing and don’t have to keep a thumb at p.237 of Delia, but the principle is the same.

  31. On all-you-can-eat buffets, I went to a Chinese restaurant in York recently that did that. It was a bit formica tables but it catered to the local Chinese community and the food was good. Although it was a single price buffet, all the items were priced individually too, and the rule was, if you left anything then that dish would be charged additionally at the marked price. Perhaps the Yorkies are too wasteful as I’ve not encountered that in other all-you-can-eat buffets.

  32. Bloke in Wiltshire

    BiCR,

    Theres a bar/restaurant near me that opens from breakfast to midnight and I can’t fathom why more places don’t. I mean, it’s not very busy in the afternoon for coffee and cakes, but you don’t need many customers to pay for staff. You’re still paying rent on it, open or closed.

  33. Tractor Gent – rule of thumb for Chinese restaurants (as told to me by my Chinese wife), if there are no Chinese diners then the restaurant is not worth going in.

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