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Café Wifi: Down to The Wire

Steve Burgess

| July 1, 2008

Image by: Ryan Heshka

In Vancouver's cutthroat cafe scene, owners ponder free wireless – and the freeloaders it attracts

David Rootman was concerned. The proprietor of Kits Coffee Co. Ltd. was tidying up his West Fourth Avenue and Yew Street café one night when he noticed a car in the parking lot; a man sat alone in the vehicle. It was long after closing and Rootman feared the man might be casing the premises, planning a break-in. “I was getting ready to call the cops,” Rootman says.

But when he moved to the window for a closer look, he realized the theft was already in progress: the man in the car had an open laptop. He was stealing Kits Coffee’s free wireless signal. Rootman shut off the wireless router and the man drove away – The Great Signal Heist thwarted. Of course, the master criminal would only have to pop in during business hours to grab all the signal swag he could handle: Kits Coffee offers free wireless to every customer.

Getting wired has always been the point of visiting a coffee shop – but it’s not just about the caffeine jolt anymore. Increasingly, the standard café business model is overlapping with Kinko’s. While some cafés still rely on coffee quality as their major selling point, for others the offer of wireless service has become essential just to stay competitive when, in the Lower Mainland alone, there are now over 200 independent cafés, as well as the mighty chains: Starbucks Corp. (SBUX-Q), with 237 shops, and Blenz Coffee Inc., with 42. Everybody wants loyal customers, especially in a market this fierce, but as businesspeople and freelancers have embraced the opportunity to create connected “offices” wherever they happen to be, cafés have been forced to decide whether those virtual offices should be located at their tables. Wi-Fi or no Wi-Fi? Free Wi-Fi or paid Wi-Fi? Should cafés provide rent-free residency with every latte?

For Rootman, free Wi-Fi is about gaining a competitive advantage in a very tough market. “We’re on a key corner. It’s a location that a lot of big coffee chains would love to occupy,” he points out. “There are at least six coffee bars within a few blocks of us. 49th Parallel Roasters Café has just opened up down the block. There’s good coffee up and down the street. Plus, we have very high overhead.” Rootman pays around $65 a square foot, with taxes, building fees and services adding another $15 to $20 a square foot. He says that because he doesn’t have the buying power of the big chains, he can’t compete on price and has to find ways of providing extra value. No-charge Internet is part of that. “We just upgraded our router for about $100, and Shaw service is about $100 per month. We’ll eat the cost and make up for it in extra volume,” says Rootman, adding, “It has definitely helped us stay competitive – we’re busier because we have it.”

Just a half-block away, 49th Parallel Coffee Roasters takes a different approach. Although he sold his ultra-successful Caffè Artigiano chain to local restaurateur Willy Mounzer in 2006, Vince Piccolo retained control of 49th Parallel, which still provides beans to Artigiano. Under the terms of the sale, Piccolo was allowed to open a single Vancouver retail coffee shop. 49th Parallel Roasters Café now does brisk business in a narrow space at 2152 West Fourth Ave. and features champion baristas, gourmet coffees and the latte art Piccolo pioneered at Caffè Artigiano. (In addition to the original café at Pender and Thurlow streets, Caffè Artigiano has six other Lower Mainland locations, one in Calgary and even a satellite operation in Seoul, South Korea.) Neither 49th Parallel nor the Artigiano chain offers wireless.

“I love the idea of having Wi-Fi,” Piccolo insists. “But it has to be in the right space. If you’ve got a lot of square footage, I completely agree with the concept of free Wi-Fi. I used to enjoy going to Calhoun’s on West Broadway and getting some work done. They must have about 4,000 square feet there – it’s perfect.” At about 900 square feet, his shop is a cupboard by comparison. “We’ve got seating for maybe 15 to 30 people. With that kind of limited space, you really can’t afford to do it.” He says he pays $60 a square foot before taxes and needs about 500 customers a day “to do well.”

Somewhere between the extremes of “free” and “none” lie various paid models. Major chains such as Starbucks, because of overall brand awareness, don’t need wireless to lure customers in – but they’ve discovered they do need something to keep up with the Jonsers. Canadian Starbucks locations use a variety of service providers with different rates: an hour of Bell service, for example, will cost you $7.50. (A new wireless service, as yet unannounced, is in the works.) “We believe our customers want a fast, guaranteed wireless experience they can rely on wherever they may be,” says company spokesperson Rebecca Irani. “We provide a premium service, and our customers see value in paying for it.”

Among the providers of for-fee service, Vancouver-based FatPort Corp. is a dominant presence in local café wireless. General manager Bilal Kabalan says the company services approximately 150 cafés – including Calhoun’s Bakery Café Ltd., various Cuppajoe locations and Melriches Coffeehouse in Vancouver. According to Kabalan, “In today’s environment of ubiquitous wireless networking, it is expected that a café will offer some form of wireless Internet access.” FatPort installs its system for a fee of $495 for a small café. Café customers then sign up online – two hours’ use, or 24 consecutive hours, cost $9.95. If quarterly online billing exceeds $300, FatPort kicks back 30 per cent to the café; if that café wants to offer free wireless, FatPort will sell access codes to the café for a fee, starting at $75 a month. (Melriches, for one, offers its customers free wireless only after 4 p.m. “Before that,” says manager Julie Lee, “we’re too busy with the morning rush and lunch customers.”)