My friend Chris James, a regular spokesman for the Victorian Employers’ Chamber of Commerce and Industry, drew the short straw today when he had to defend customers in cafes being charged for tap water.
One person who called 3AW claimed to have had to pay 40c for water, which on the water prices quoted in The Age article is at least 500 times the cost even for large glass. Extreme capitalism!
According to Chris, it is a voluntary charge and the money is to be used for water-saving measures. But when interviewed on radio he could not explain how we could be sure that the money would be spent this way, or why if water-saving measures are necessary they should be be paid for via a levy on water. Indeed, a shift in relative prices against water would lead to more consumption of other drinks that use far more water in their production than tap water does.
Personally, I dislike ‘voluntary’ charges. They complicate commercial relationships with other judgments – in this case, about the issue of water (do I not care about water because I don’t want to pay a voluntary” charge, or is my level of caring measured by how much I am prepared to pay?). This is worse than the other voluntary charge in cafes and restaurants, the tip, where at least there is an incentive effect. Water will be the same quality no matter how much you pay for it.
Of course cafes and restaurants are entitled to make commercial decisions about to what extent they bundle the goods and services they provide. But generally in going to a cafe or restuarant rather than a fast food outlet you are paying more for the food and non-water drinks in exchange for better service and facilities. As the marginal cost of water is very low, it has traditionally been bundled, and I doubt lame excuses about water savings will persuade customers that a separate charge is a better system.