When writing about Bandit, a new coffee shop business that officially opened in New York City today, you have to mention two things. First, that the only way to order your drink from Bandit is through its mobile app. No cash. No card swiping. You pay by app.
This app-only approach then brings up the second thing. Given the current political climate in New York City and other major metropolises against businesses that don’t accept cash, how long can this app-only business model survive?
But before we get bogged down in regulation, let’s talk about what Bandit actually is, because there is something more to it than just the payment system. If all goes according to plan, Bandit will be a chain of coffee shops that use mobile ordering and payment to get you your coffee fast.
Max Crowley, Co-Founder & CEO, Bandit told me that his company mobile-first method was inspired by China’s Luckin Coffee. “We took some core learnings that we saw from them and over the last couple months, we tested and iterated on them,” Crowley told me by phone last week, adding that Bandit customers can get their drinks in as little time as 40 seconds.
On its face, mobile ordering and payment isn’t that innovative; I mean, Starbucks already offers it. But just like its coffee service, Bandit aims to be fast at opening up it stores. Bandit coffee shops are actually self-contained, pre-fab modular components that slot together to create an 11 ft. by 11 ft. store within just about any vacant space. Crowley said that once it has all the components, Bandit can open up a location in a matter of hours.
This standalone store-within-a-store approach should be a boon for Bandit, which doesn’t need to spend a lot of time scouting specific locations or doing buildouts. The whole concept is designed around speed so the company doesn’t have to create comfortable destinations where people hang out. Instead, it can carve out small footprints in high-traffic spaces.
The issue, though, is that even in these high-traffic areas, only people with the Bandit app can partake in its coffee. If you don’t have a mobile phone and a credit card, you’re out of luck.
Going cashless right now seems like a risky move for Bandit. New York City, Philadelphia and San Francisco are among cities that are pushing back against cashless operations that cut out the poor and the underbanked. Even the mighty Amazon relented with its cashierless Go stores and added the ability to accept greenbacks. Sweetgreen backtracked on its no-cash policy as well.
Crowley is aware of the potential issues, but isn’t daunted by them. “Cashless is not the law yet in NY. We’re going to continue to look at that,” he said, “We’ll comply with whatever laws and we certainly want to serve all customers.”
Customers in New York certainly have their fill of innovative options when it comes to getting their morning java. In addition to Bandit’s app-only ordering, Truebird is deploying five robot baristas across Gotham, and GOffee just equity crowdfunded more than a million dollars for latte delivery to your desk in downtown NYC.
Bandit’s first location is located at 466 Lexington Ave, New York. The company is privately funded and plans to open more locations in Q1 of 2020.