Designed by a small team from Israel, the app is intended as an alternative to the smartphone loyalty cards offered by the likes of Starbucks (SBUX). “It’s a similar service,” says Gilad Rotem, a co-founder of the startup, which is also called CUPS. “We’re offering a mobile app, prepaid plan, but it’s for independent, higher-quality coffee.”
New Yorkers will pay $45 a month for brewed, drip, pour-over, or filtered coffee (or tea). Latte drinkers will pay more: The unlimited espresso subscription costs $85 a month. Rotem says the prices are equivalent to about 22 cups, or roughly one java beverage per workday per month. On average, Americans consume 1.7 cups of coffee a day, according to Studylogic, which means a CUPS subscription may not be a bad deal. For coffee drinkers with a lower caffeine tolerance, CUPS also offers prepaid package deals for 5, 10, or 20 drinks per month.
The startup, which is hosting a free open beta this week, hopes to expand into at least 200 NYC coffee shops within the next months. “It’s not a number we pulled out of a hat,” says Rotem. “It happens to be [about] the number of Starbucks that are in Manhattan.” So far, participating coffee shops include the likes of Madman Espresso, The Bean, Pushcart Coffee, Bleecker Kitchen & Co., and Wild. All but a few are in Manhattan.
To use the app, subscribers pick a coffee shop from a list, choose a drink, and retrieve a code, which the barista then uses to record the transaction. CUPS later reimburses the coffee shop for each beverage, at a discount. If the customer buys more than $45 worth of coffee per month, he comes out ahead; if he spends less, CUPS keeps the change. The coffee shops don’t pay anything to participate, so in their worst-case scenario, either no one comes in or they sell a lot of discounted drinks.
CUPS already runs a similar service in Tel Aviv and Jerusalem with more than 100 coffee shops. According to Rotem, participating cafes report that the app is bringing in more business. Unsurprisingly, subscribers take full advantage of the unlimited caffeine. “They say they’re drinking more coffee than before, about 20 percent more,” says Rotem (who, by the way, drinks four to six cups on a bad day). “Our users save around 30 percent on coffee.”
For whatever it’s worth, fiendish subscribers must adhere to at least one limitation: They must wait 30 minutes before ordering another coffee.