A longtime Uber employee has his eyes set on New York City for another start-up: a “mobile-only” coffee shop.
The term “mobile-only” when it comes to food and drink is a bit of a misnomer. By nature, the new company called Bandit needs physical locations where people can pick up their coffee; there’s currently one at 466 Lexington Avenue between 45th and 46th streets. It serves a standard menu of cafe fare, like coffee, espresso drinks, and matcha lattes, plus seasonal specials like a peppermint chocolate latte. Pastries and other snacks come from Colson Patisserie and Three Owls. There’s life-sized Jenga and Connect Four.
But co-founder Max Crowley, who left Uber last year, is calling Bandit mobile-only because people can only buy coffee through a corresponding app — or as he tells Eater, “We are coffee at a push of a button.”
That means anybody showing up to the new coffee shop with only cash, a credit card, or a phone without an app store won’t be able to buy a latte until they download the Bandit Coffee app on an iPhone or Android phone, create an account, upload a profile photo (required so that the barista can recognize them), and put in a payment method. It’s similar to the first pickup-only Starbucks shop and the fast-growing Chinese company Luckin Coffee, which is the biggest competitor to Starbucks in China and the inspiration for Bandit.
Though there’s just one outpost now, Crowley plans to open at least five or six in the city or New Jersey within the next year. The goal: “We never want to be more than five minutes walking from someone who wants coffee,” he says. He’s targeting density in Midtown first, with hopes that there will be one “on every corner” soon.
Crowley’s banking on landlords with vacant spaces who might want a temporary coffee shop on their properties.
Instead of building out existing spaces, Bandit constructs its coffee shops in factories in Michigan and California, as 11 by 11 “modular, self-contained units.” (In a blog post, Crowley calls it one of the company’s “core innovations.”) They work with New York landlords who have vacant commercial spaces that have yet to be filled, and instead of a traditional lease, Bandit signs licensing agreements where the landlord gets a percentage of the sales for rent, a common practice for commercial tenants. (Crowley calls this “activating vacant spaces with modular, movable coffee shops.”)
The shop can be up and running within four hours, Crowley says, ideal for a landlord who needs a vendor fast. The same timeline could be applied to co-working spaces, hotel lobbies, or any store that wants a coffee component. When the landlord leases out the space to a longterm tenant, Bandit can hop out of it just as quickly.
The existing Lexington location, for example, is in a vacant space, and Bandit may eventually move out of it.
“We really see ourselves as flexible from a landlord perspective,” Crowley says.
A bonus for the customer, he argues, is that the coffee is “really good” and “cheaper than Starbucks,” possible because of lower build-out costs and roasting at Pulley Collective in Red Hook. Drip coffee is $2, cold brew is $3, and everything else goes up to $4.50. (A FiDi Starbucks charges $2.35 for a tall drip coffee and $4.95 for a tall eggnog latte, also before tax.) For frequent buyers, there’s also membership plan, where for $20 a month, members can get unlimited drinks for $1 a piece.
“It’s about speed and convenience, and at an affordable price point,” Crowley says.
So far, Bandit has raised money from more than 30 investors, mostly Crowley’s fellow ex-Uber employees, though he declined to name the amount. He’s also partnered on the project with James Gallagher, who used to be COO at tech start-up Good Uncle, an app that delivers restaurant food to college campuses.
It’s a risky proposition — plenty of tech people have recently come into the food and drink world and quickly failed despite millions in investment and claims of innovation. Automated quinoa restaurant Eatsa, the supposed “robot” lunch spot, shut down, as have most of the tech-fueled delivery-only restaurants, like Maple, Ando, Munchery, and more.
And New Yorkers — particularly those working in Midtown, where Bandit is targeting — can already get coffee in under five minutes from third-wave coffee shops, bodegas, restaurants, and Starbucks, which has its own mobile app and tons of existing real estate. None of these places require downloading a new app to get coffee, and Bandit’s prices aren’t significantly lower than competitors.
Plus, there’s talk in New York about banning businesses that don’t accept cash. Many people also go to their coffee shops out of habit and proximity, and for now, by nature of the business model, Bandits will be in their locations temporarily.
But Crowley believes that Bandit is “the future of retail design and build.” He says people are already going to Bandit’s current location, with more than 60 percent of customers returning. (“Thousands” have downloaded the app, a spokesperson says, and “hundreds” of customers come in daily.) Some of the locations could eventually become permanent, too, with potential for the Lexington one to go in the lobby or elsewhere with the landlord, the real estate company RXR Realty.
And if the company expands quickly enough, Crowley thinks that Bandit will be ubiquitous enough that people will feel compelled to install the app on their phones.
“Our goal and model is to have these everywhere,” he says. “If Bandits are everywhere, it will make sense to [download the app].”