Non-Fat Latté? That’ll Take Six Months.

I was really impressed last spring when a freshman suggested a coffee meeting at—of all places—Moonbeans.  “Finally!” I thought to myself, “This year’s freshmen have taste!”  I was glad that freshmen could appreciate a campus staple, conveniently located between Meyer and Green, East Campus and the Quad, perfect for that stop to or from class.

Not anymore.  Last spring, Moonbeans lost its bid to extend its 11-year run at the library kiosk.  Stanford Libraries awarded the contract to Coupa Café, which already has locations in downtown Palo Alto and the Y2E2 building on campus.  Students were outraged that Moonbeans would close; petitions furiously made their way across chat lists but proved fruitless.  Moonbeans closed for good in June.

So where’s Coupa?  The library kiosk remains shuttered.  A September 23 article in The Stanford Daily reported that Coupa would not begin serving coffee at the kiosk until January, practically six months since Moonbeans last operated there.

I tried to justify keeping Moonbeans open by guessing how much lost revenue any coffee provider would earn if they could continue serving from Moonbeans’ closure in June to Coupa’s opening in January.  Even if Coupa outbid Moonbeans to secure the kiosk, surely the lost revenue from sales could exceed the difference in bids.  After all, economics class taught me that present discounted value says a dollar today is worth more than a dollar tomorrow, and we’ve missed a lot of potential dollars since June.  Understandably, Stanford Libraries cannot reveal the bids for confidentiality’s sake, but it still seemed like a nice exercise.

It might make sense if sizes of bids were the only thing Stanford Libraries considered. According to Stanford Libraries Director of Communications & Development Andrew Herkovic, “It is fair to say in summary that Coupa on balance presented the most plausible and professional of the proposals. Obviously, part of that involves providing the campus community … with services and products that it will appreciate and patronize, at reasonable prices. But there would be less visible issues as well having to do with the stability, capitalization, management and resources of the vendor.”

Herkovic then offered a different perspective on the situation.  “Businesses come and go, on campus, downtown, and everywhere else,” he added. “[Moonbeans] had the chance to bid against other small firms. They failed. Coupa won. The campus will be served slightly differently, and probably better, as a result.”

That’s reasonable.  Competition keeps firms on their toes; when they fail to offer services at good prices and quality, they lose business to competitors.  Indeed, Moonbeans may not have stayed on its toes.  Remember petitions at the end of the 2007-08 school year warning of Moonbeans’ demise?  Herkovic also mentioned that Moonbeans actually shrank as a business during the 11 years it operated at Stanford, including closing other locations.

Okay, so even if there’s something to be gained from changing ownership, why isn’t Coupa serving coffee there yet?  “We are, as far as one can tell, on track for a January opening, despite ongoing permitting conversations with local officials,” Herkovich said.

That leads us to the real villain of the story.  Not Coupa Café, not Stanford Libraries—government bureaucracy.

According to the *Daily *article, Coupa Café owner Jean Paul Coupal expected permitting and construction to last three months, but found out that permitting alone took two months.  There was no way to prepare the library kiosk over the summer alone.

State regulations in California require burdensome, redundant permitting before any business can begin operating in the state.  Gov. Arnold Schwarzenegger’s California Performance Review reveals, “A person wanting to open a beauty salon in Sacramento, for example, must register and obtain permits and licenses from eight different state entities, and someone wanting to open a gasoline service station must register or obtain permits and licenses from nine state departments.”

California is bleeding jobs; in September, it had the third-highest unemployment rate in the country, at 12.2%.  Not only do these punishments to business hinder job creation, it’s stopping you from getting your coffee outside Green Library.  These damaging regulations are even puncturing the infamous Stanford bubble.

No wonder California has the third-worst business climate in the country.  No wonder it takes Coupa Café six months to start operating a kiosk.  Permitting processes across California must be streamlined to encourage entrepreneurship.  If it’s Coupa Café here, how many small businesses are getting delayed in Los Angeles?  San Francisco?  Or how about Fresno County, where some cities break 30% unemployment?

But fear not, coffee aficionados—according to Herkovic, Stanford planned interim coffee service next to the kiosk before Coupa opens in January.  Oh, wait, that was held up by bureaucracy, too.  Coffee vending machines will be available in a few weeks instead.

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