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One Coffee, Leave Room for Data

One Coffee, Leave Room for Data

(Bloomberg Opinion) -- The city of New Haven, 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, and a lot of people around town are upset. Words like “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 any time 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.

In other words, Shiru is not a café at all. It’s a business that trades free coffee and cheap food for data.

How does the trade work? “To get the free coffee, university students must give away their names, phone numbers, email addresses and majors,” noted one story after Shiru opened its second U.S. store in Providence, home of Brown University, last fall. “Students also provide dates of birth and professional interests, entering all of the information in an online form.”

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. Some of its Japanese locations include devices that allow patrons to take virtual tours of potential workplaces.

It seems to me that there are only a handful of reasonable bases on which to criticize this arrangement. None is persuasive.

First, we might take the view that the students aren’t smart enough to understand the trade they’re making — that is, they do not value their data as highly as we think they should.  But paternalism of this sort is always dangerous, and should therefore be taken seriously only when presented in a tight chain of reasoning.

Like all of us, students can be sloppy with their data, but that doesn’t mean they don’t worry. As one student at Brown put it: “I hate to say it, but I don’t really know enough about what they’re admitting to using our data for or disclosing to us because I don’t pay close enough attention.”

Fair enough. Yet the answer to this concern is pretty simple: If you’re worried about Shiru’s policies and don’t want to take the time to find out for sure, you’re free not to walk through the door.

Another possible criticism: We might be angry that data about some people (college students) is more valuable than data about other people (those who aren’t college students). 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.

Finally, we might 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.

Nobody in New Haven would give a peep if Shiru existed behind ancient stone walls and featured a buzzer and a tiny brass plaque reading “Private — Members Only.” That the shop prefers big windows and a café atmosphere is an irrelevant detail.

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.

Neither, as it happens, do colleges, which are notoriously bad at protecting data.

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.”

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