The tort environment in the US is gumming up the gears big time, and I believe it to be one of the undercurrents of change. Every business decision begins with the question “how do we limit our liability exposure?”.
One way is to separate the land asset from the business, so it is not at risk in lawsuits. This diminishes the incentive to create businesses, since the rent seeking portion of the business is even more profitable, and the productive portion of the business is less profitable.
Another is to have cameras everywhere. And another is to require higher prices and/or credit cards, to service as credit checks to filter customers.
And obviously, the last but not least, is to simply eliminate third places and eliminate potential interaction between employees and the broader public.
That example of liability only seems very tangentially related to third place activity. The lawsuit was over a discriminatory employee firing that was seemingly undertaken for reasons of public relations and community reputation, to mitigate these aspects of the impact to Starbucks of the original event.
The triggering event could just as easily have been any number of other scenarios unrelated to third place usage patterns - and even unrelated to customer behavior. It was just an employment discrimination matter, period.
What’s more, this original triggering event was arresting a Black person who didn’t order anything, whereas most people who go to commercial third places (including most such Black people) do order at least one thing, even when they occupy their seat for far too long for the amount of money they spend.
> It was just an employment discrimination matter, period.
It is tangentially related, but I believe the results were all the same. And perhaps the root cause was actually quelling the rage machine enabled by social media and the internet, but either way, the business decision remains:
How do we reduce the possibility this happens again? Regardless of how correct the Starbucks’ employees actions were in asking a non paying person to leave, and regardless of the fact that it is police who arrest people, not Starbucks employees, the event may have contributed to Starbucks’ executives concluding that the cost of providing the third place is not worth the benefit.
Looking at this another way, coffee and sugary drinks are a fungible commodity. If Starbucks is removing third places, why is there no competitor stepping in with a third place and taking their business?
> How do we reduce the possibility this happens again? Regardless of how correct the Starbucks’ employees actions were in asking a non paying person to leave, and regardless of the fact that it is police who arrest people, not Starbucks employees, the event may have contributed to Starbucks’ executives concluding that the cost of providing the third place is not worth the benefit.
That would be bad reasoning on Starbucks’s part. The problem that led to the liability was treating managers differently based on race, unrelated to the original trigger. Starbucks reasons better than that, and indeed as I note later in this comment, they have made no overall decision to stop being a third place.
> Looking at this another way, coffee and sugary drinks are a fungible commodity. If Starbucks is removing third places, why is there no competitor stepping in with a third place and taking their business?
These do exist. I’ve used them. And Starbucks still accommodates the third place usage pattern in many places inside and outside the US, including ones where lawsuits are a risk. They make a site-specific decision on what’s worth the tradeoff for them, not a nationwide or global decision.
See this event that may have caused Starbucks to recalculate its liability costs for providing a third place.
https://www.npr.org/2023/06/15/1182359923/ex-starbucks-manag...
The tort environment in the US is gumming up the gears big time, and I believe it to be one of the undercurrents of change. Every business decision begins with the question “how do we limit our liability exposure?”.
One way is to separate the land asset from the business, so it is not at risk in lawsuits. This diminishes the incentive to create businesses, since the rent seeking portion of the business is even more profitable, and the productive portion of the business is less profitable.
Another is to have cameras everywhere. And another is to require higher prices and/or credit cards, to service as credit checks to filter customers.
And obviously, the last but not least, is to simply eliminate third places and eliminate potential interaction between employees and the broader public.