San Francisco vs Free Food

free food

In late July, San Francisco (SF) Supervisors Aaron Peskin and Ahsha Safai proposed a ban on workplace cafeterias, hoping this will lead to more traffic for small businesses within the city.

The ban would only apply to new construction, meaning all current workplace cafeterias (including the one within the SF City Hall, the workplace of the advocates of this ban) will be unaffected.

Many large tech companies that operate within San Francisco have a habit of offering a wide variety of convenient services to their employees, including free or heavily discounted food. These benefits incentivize workers to spend more time at their workplace and allow employees to use their extra time to continue working during lunch breaks.

Of course, employees are not forced to use these services, including the cafeterias. They can bring their own food, or they can leave the office and grab food from any of the local restaurants of their choosing. The employees, like just about anyone, choose the option that brings them the most value. For thousands of tech employees, they prefer the workplace cafeterias.

And that’s fine. If companies are choosing to build their own cafeterias with discounted food as a benefit to employees, then it’s almost guaranteed that the extra value produced by the employees more than covers the cost. Companies get more money, and employees get convenient benefits. What’s the downside?

The supposed downside lies outside these large companies. Local small restaurants are losing customers. As Golden Gate Restaurant Association executive director Gwyneth Borden says, “you can’t compete with free.”

She’s exactly right, but that doesn’t justify support for forcing employees to pick the second-best option. Workplace cafeterias may have an advantage, but not an unfair one. If local small business owners cannot survive in their current state, they have three options. They can remain competitors and create ways that make the extra cost and distance worthwhile for employees. If they can’t do that, they can find a new location that would be better for business. If that’s not an option, then competitors could close the business and search for a better source of income. Any of these options are better than depriving tech employees of what brings them the most value.

Even if this ban went forward, there’s no guarantee that the benefits would be noticeable. Since the ban only affects new construction, this will not help small business near already established workplace cafeterias. New tech companies can also adopt a common solution of having food delivered to their offices during lunchtime.

Peskin, a co-founder of the proposed ordinance, claims that this ban is about spurring a conversation on engagement between companies and local businesses. He says “We’re not trying to take away anybody’s lunch.”

If he wanted a conversation, there are plenty of other ways to go about it. Using the force of the law to prevent companies from providing benefits to their workers is an odd way to encourage dialogue about a supposed problem within the city. Following in the footsteps of Mountain View’s ban on free food isn’t the best way to gain support for a cause. If economic growth is a concern, then preventing companies from flourishing to the best of their ability is not the way to go.

This ban would also prevent companies from attracting workers. Tech companies that offer free food will incentivize better employees to work for them over companies without this benefit. One San Francisco company that does not offer this benefit is Credit Sesame. Paul Rava, the CFO, says that this potential cafeteria ban will help him compete for workers.

It is not the job of government to interfere with the market and pick winners and losers. SF Supervisors Peskin and Safai are overruling the voice of San Francisco’s citizens through this ban. The citizens that work for tech companies are choosing which food provider they prefer. Tech companies are also competing with one another by offering great benefits to employees, and to tell companies that they can’t provide certain benefits to their employees isn’t exactly in the best interest of the employees. To tell them where they can and can’t eat is implying that government planners know what’s best for the community rather than the community itself.

This ban would give special advantage to companies that already have a cafeteria over those that are unable to build one. This will surely act as a disincentive to companies that are interested in building an office in San Francisco.

Lucky for the people of San Francisco, this ban is only a proposal at the moment. Future businesses may still have the opportunity to make life easier for their employees.

Featured Image

The following two tabs change content below.
Nathan A. Kreider is author of the Misconceptions column for Being Libertarian, and has written for the Austrian Economics Center, the Foundation for Economic Education, and the Liberalists. He also occasionally publishes a blog and video content, including short book reviews, which can be found on his website, He can be contacted by email via [email protected]