Monopoly on Campus Question

[viper134]

Hi, I'm new to the forums and just recently got interested in Objectivism. I have a question that hopefully someone will be able to answer.

I've just started living on campus and found out that every single eating establishment(1. a cafe, 2. a fast food place 3. a cafeteria style place) is owned by the same corporation "Aramark". I've learned from experience as well as talking to other people that most of these places offer horrible quality food. I don't have that much to complain about the cafe except they don't innovate as often as I would like. The fast food place offers items that makes McDonald's look like fine dining and the cafeteria has the same variety and good meals as a public school does. Would it be right to blame this on a monopoly that my college puts in place or is it just the only possible solution to such a community? (my college is pretty small) The surrounding area doesn't offer much alternative except for a Turkish restuarant that offers pretty good gyros.

Any help would be appreciated.

P.S. I hope this is the right place to post this.

Edited February 22, 2008 by viper134

[DavidOdden]

Would it be right to blame this on a monopoly that my college puts in place or is it just the only possible solution to such a community?

I assume you mean "on the actual college property". On college property, it's reasonable to expect there to be an exclusive contract for eateries, assuming the place doesn't have its own food service division. In the local neighborhood, there's no way to impose a monopoly, so I'd assume you're in Lower Slobovia, population 300. Or, the Lower Slobovia neighborhood of Detroit, which is 3 miles out in the woods. Anyhow, colleges don't have any particular interest in restricting competition for food. If you told us more details of the environment, our collective opinions would be more informed.

Welcome, btw.

[Scott_Connery]

Anyhow, colleges don't have any particular interest in restricting competition for food. If you told us more details of the environment, our collective opinions would be more informed.

My college sure did. They got a kickback for each dollar spent at the school cafeteria. Therefore, they mandated that all students had to purchase a meal plan, and also ensured that there were no other on-campus food options to make sure that people bought more expensive meal plans.

[viper134]

Well I don't drive and the neighborhood is pretty rough. I consider my college a bit of an oasis. There are not really any alternatives within a mile of the campus except the turkish place and maybe a restaurant called Korean grill which i'm not sure I want to go to. Also i'm glad Scott_Connery mentioned a food plan. I am required to pay for a meal plan limited to Aramark places when I live on campus. The meal plan gives me a certain number of times per day I can have a meal in the cafeteria and then a "declining balance" at the start of each semester which I may use to purchase food from the other Armark places.

[D'kian]

I work for a food distributor and food service company. We supply lots of "institutional" cafeterias. Setting up an industrial kitchen with the ancillary storage and refrigeration cahmbers costs a lot of money. Maintaining them isn't cheap, either. therefore those in charge will try to induce the people in a given isntitution to eat there. Things such as meal plans are common. Some employers will include meals as a fringe benefit or part of the salary, and will pay them with meal tickets for their cafeteria.

Supply in such places is of lower quality than what you'd usually find at a supermarket or what restaurants buy. It's about on par with what gets supplied at hospitals. There's a reason for that. These places buy very large quantities of food (you can't take as much care when cutting, say, a few dozen pounds of steak as compared to a few short tons), lack processing facilities, are always rushed for time, and usually have a captive clientele. Besides, they tend to sign long-term contracts with their suppliers

Supermarkets buy large quantities, but they usually have processing facilities. Restaurants buy lower quantities and are much pickier about what they accept from a supplier. A restaurant usually looses a customer only one, but it lasts forever.

We don't suplpy colleges, but I know the situation is very similar.

Now, if you've paid for a meal plan, or have part of your salary paid in meal tickets, then every meal you eat outside the cafeteria costs you extra, and you loose what you've already paid (or been paid) for. The cafeteria is also at the better location. Going off site takes time and might make you late for class or work.

[DavidOdden]

Dkian has laid out the basic economics of food service that explains the quality problem. Better food costs more money, so you and everybody else would have to pay more on the food contract. In some places like Yale, you do. If you want to blame someone, you could blame your fellow students for not having more money and more demanding palates, but I don't think any blaming is motivated in this case.

[KevinDW78]

The University of Buffalo (where I attended) had a little loophole in that right next to the student union they created what they call "U.B. Commons" which, even though is in the center of campus, is not considered campus property. Therefore, chains like Burger King, Pizza Hut, CVS, etc were able to set up shop. And they are quite popular too. I can't be sure, but I believe the exclusivity in the case of U.B. was mandated by the State of New York since it was a state school.

At the same time, I worked in management for the offical campus food service (private) company. And while U.B. was big enough to have it's own food processing, storage, etc, the university simply would have enough to do running the school without having to be concerned over the food service too. The most practical solution was to contract with one company to exclusively run everything for them. Schools make all sorts of exclusive contracts with private companies. Heck, U.B. even had an exclusive contract with Coca Cola to only allow Coke products on campus. If you wanted a pepsi, you had to go to The Commons to CVS and buy one.

Edited February 22, 2008 by KevinDW78

[gags]

....the Lower Slobovia neighborhood of Detroit, which is 3 miles out in the woods.

I've been there and it ain't pretty.

Well I don't drive and the neighborhood is pretty rough. I consider my college a bit of an oasis. There are not really any alternatives within a mile of the campus except the turkish place and maybe a restaurant called Korean grill which i'm not sure I want to go to. Also i'm glad Scott_Connery mentioned a food plan. I am required to pay for a meal plan limited to Aramark places when I live on campus. The meal plan gives me a certain number of times per day I can have a meal in the cafeteria and then a "declining balance" at the start of each semester which I may use to purchase food from the other Armark places.

I had almost the opposite situation with my daughter when she was attending Hunter College in downtown Manhattan. The school offered a fairly expensive meal plan that could be used at a number of college run eateries around the campus. The quality of the food was mediocre and there are so many restaurants in that general area (many are even reasonably priced) that it made much more sense for us to let our daughter make her own dietary choices as opposed to paying for a meal plan.

In any event, given the economics explained by D'kian, I don't see anything terribly wrong with colleges doing this sort of thing. I suppose it's just another factor to weigh when picking a school.

[DavidOdden]

I suppose it's just another factor to weigh when picking a school.

Yeah, remember that Mallory chose Grant College for its thick, juicy steaks.

[gags]

Hey, what can I say. I'm Italian and food is important to me.

[viper134]

Thankyou for all your replies. After some careful thought I came up with two solutions which I think would work quite well.

The first one being that the students would simply elect a food service to run the campus establishments every 5 yrs or so. This would atleast make the establishments choosen in accordance with what the student body wants and make it so there wouldn't be anything to complain about. The only downside is the costs are huge and depending on the fluctuation of student opinion 5 yrs would have to be long enough for them to turn over a profit they think is worthy enough to setup shop. At the same time though it would want the current food service to do what they can to serve the student body well if they wanted to be "reelected".

My second idea would be to simply get rid of all the establishments and simply have 4 or 5 areas that franchises/eating places could move into. Like a full implementation of the U.B. Commons that KevinDW78 mentioned. Then let the market work out the quality/price question. Only problem that I could see is that having all fast food places wouldn't be the best idea. Maybe an elected committee of some sort could determine what is in the best interests of the student body concerning health and variety (ie taco bell good for lunch and maybe dinner not so good for breakfast)

Thanks,

comments would be great.

[DavidOdden]

Here are a couple of considerations for your alternatives. The outside company presumably made the best bid for the specified service, and got a contract with the university. How would the student elections work in that case? Since the contact is between the university and the company, the contractual conditions have to be acceptable to the university, thus the student influence ultimately has to be advisory, so for example the vote would be accepted unless there were good business reasons to not go with the student choice. This would probably lead you to exactly where you are right now. Here's a side question: do you know what the level of student dissatisfaction is? I'd bet, if I were in that position, that I would be displeased with the product because everybody should know that polpette di baccala is made with day-old bread, not the canned dry crumbs, that not all aceto tradizionale are the same, and Hormel's is not a substitute for guanciale, but maybe others disagree.

I think option 2 is the better one. I disagree with the tendency to reject "fast food" places without naming the exact reason why. My only objection to food that is quickly prepared and delivered is that it can't be done right for certain dishes. If you mean that a steady diet of nothing but burger-coke-fries is not nutritionally optimal, that's more an argument that people need to pay more attention to what they eat from a health perspective. Does the Aramark cafeteria check that you've eaten your cream of spinach before letting you have dessert? I.e. should the eateries be enforcing good eating habits? So if you and other students want a decent insalata caprese, market forces will supply if there is in fact a demand. But if there's no demand, well, there's your problem. This is an area where I think college sudents should be treated like adults, so that they learn the lessons of cause and effect, and so that they can concretely understand "responsibility for actions". That's not the only area, but it is specifically one of them.

[D'kian]

The only downside is the costs are huge and depending on the fluctuation of student opinion 5 yrs would have to be long enough for them to turn over a profit they think is worthy enough to setup shop. At the same time though it would want the current food service to do what they can to serve the student body well if they wanted to be "reelected".

The costs are huge, but the capital goods invested in (kitchen equipment and utensils) are mobile; that is, the concessionaire can take them to another location where he will suplpy similar services. So the risk isn't big if his business is expanding. Securing a further contract, however, wouldn't be easy. Colelge students typically don't stay in college more than four years, right? A place with lower turnover, say a factory or a hospital, would be a better palce to implement such a scheme.

In fact, some hospitals we supply do poll their employers regarding the cafeteria service, and the results are tkaen into account when the contract is up for renewal. That doesn't keep most of the med students and virtually all the residents from eating either at the restaurant (which is expensive) or off site (which is cheap, but not nearly as sanitary).

Only problem that I could see is that having all fast food places wouldn't be the best idea. Maybe an elected committee of some sort could determine what is in the best interests of the student body concerning health and variety (ie taco bell good for lunch and maybe dinner not so good for breakfast)

Whether you got something other than fast food is an open question. One important item: how much money can college students spare for meals?

In Mexico there's a kind of restaurant that proliferates around office buildings. They offer home-cooked type meals with a very limited menu than changes daily. There's a fixed price which includes a choice of soup (usually two kinds), a choice between rice, beans or pasta, a choice of three entrees, dessert and fruit-flavored water (coffee and soda are extra). They're cheap, clean and packed every day

That should work well in a college setting.

[DavidOdden]

Colelge students typically don't stay in college more than four years, right?

Dude, that is so much a 60's figure. I think the number of 4-year graduates is below 25%.

[D'kian]

Dude, that is so much a 60's figure. I think the number of 4-year graduates is below 25%.

Really?

If that be so, then they ought to be more worried about where, and whether, they'll eat after college.

Edited February 24, 2008 by D'kian

[Maarten]

I know that back home, people frequently take 5 or 6 years for a 3 year bachelor's degree. That's almost the norm... Apparently the real purpose of college is to party, and academic stuff is secondary. Most students hardly care that they're taking two extra years, but then, the government subsidizes it so much that you're only paying like 1500/year for college, anyway. So in that case, it's not a huge deal if you pay that two extra times. Someone's paying for it, of course, but that money is already lost because of taxes, so I don't think many people care.

That's definitely different here. College is expensive enough that most people want to be done asap, unless their parents are crazy rich and don't mind paying another 60k, but even that would be pretty rare, I think.