Starbucks' headline-making brand recreation is a bit tarnished today by an adverse court ruling. As decided in California, the company owes baristas about a hundred million dollars in tips that were distributed to shift supervisors and managers. The coverage makes it look like corporate was stealing from their workers. The L. A. Times, for example, leads by saying that "Starbucks got caught with its hand in the tip jar."
The practice might have been illegal under California law, but it wasn't stealing. If baristas (oops, I mean "partners") didn't like the practice they were free to work elsewhere or renegotiate terms. It's also a sensible way to do business: if supervisors spend most of their time doing the work of baristas and cashiers, there's no reason for them not to get tipped out with the other workers. Restaurants with on-the-floor managers who serve tables do exactly the same thing.
Assuming Starbucks' compensation model is effective, this ruling won't change much. It's a one-time bonus for baristas who get to take advantage of a stupid law and a one-time hit for the corporation that's getting nailed by it. It could lead to raises for supervisors to compensate for lost tips and will likely slow down pay increases for non-management positions. It doesn't do much of anything to change incentives, except perhaps to make managers less invested in running fast, friendly stores. This isn't a victory for workers' rights; it's a forced replacement of a business model that was working well to another, possibly less efficient one demanded by court decree.
How fast and how far will Starbucks rollout its newly acquired Clovers? Answer: real fast and real far. The Seattle Post-Intelligencer reports:
Many stores will be getting a Clover, but probably not those with low foot traffic or short hours, Gass said. Very busy stores may get two. About 30 percent of U.S. stores will get Clovers by year-end, Schultz said.
In another article -- does any other newspaper devote so much space to coffee coverage? -- a discouraging sign about the future of Clover sales to indie shops:
[Clover founder Zander Nosler says,] "When I first wrote a business plan, it did have the idea of Starbucks in it. And I was told early on, 'You'd better not write a business plan that has one customer, because you won't raise much money with that.' So we made a plan that involved going out to the world, to everybody."
That's precisely what Schultz didn't want -- so he bought the company.
I can't fault the guys for selling. They got a dream offer, and they certainly deserve it for all their hard work, vision, and ingenuity. But still, looking at all the potential the Clover holds for changing the way people think about coffee, it would be a shame to see Starbucks get it exclusively. Unfortunately, I suspect Starbucks Corp. sees more advantage in keeping Clover brewers to itself and to the few early adopters that already have them. Let's hope I'm wrong...
I'm working in a Starbucks -- instead of Peets because Peet's won't get wireless.
There's a guy in here with a new Mac Air. Oh, that thing is beautiful!
I told him if he charged people a dollar to touch it he could probably pay for it in a week.