Pay for What you Eat

Are you the kind of guy who never speaks of his mess in a complimentary manner? Can’t remember the last time you ate in the mess? GSHA, Abhishek Agarwal, initiated the implementa- tion of Biometric Systems in messes to tackle these problems and more. Hostel 5 has had this mecha- nism in place since the previous semester; there were teething issues with its implementation but they have since been overcome

Usage Based Model – An Analysis*

As per status quo, all students end up paying for all the meals in our messes even if we don’t eat any. A Biometric System eases the task of keeping track of a student’s activity in his mess. Is it justified then, to charge someone for a meal he hasn’t even had? Below, we analyze whether a Usage Based Model could be implemented and why it is even morally correct to do so.

Currently each individual pays Rs. 80 per day, for the 4 meals he is offered, at Hostel 8 whereas the cost for the same is actually Rs. 130. The only reason that the caterer agrees to charge Rs. 80 and not Rs. 130, is that several people don’t eat in the mess and so the caterer can charge lesser. In fact, it can be understood that people who do not eat in the mess regularly, end up subsidizing the amount for people who do.

We took up this issue with ‘Leaf and Loaf’ caterers. As of now there are 287 students who are enrolled for messing facilities in Hostel 8. For the pilot project, 100 students would be given an opportunity to shift to the ‘Usage-Based’ Model, if they wish and approx- imately 200 people would be a part of the traditional ‘Lump-Sum’ scheme. The option could be given to everyone without a cap but that can be done only after a trial pilot scheme is completed.

For an individual who wishes to switch to the Usage- Based Model there are 2 important considerations:

1. The charge per meal would be higher and could go up to Rs. 120 (lesser than 130 but more than 90) per day if he eats all 4 meals in the mess. Also, there is a basic fixed cost of Rs. 30 (included in the 120) that he would pay daily, irrespective of whether he eats or not.

Why is a Biometric System preferred over a Card Based System?

Ease in Billing: Providing the Mess Council with data regarding a student’s mess usage in an Excel sheet format, it makes the task of compiling expenses incurred by a student, incredibly simplistic since data no longer needs to be fed into computers manually. Introducing transparency in the system, rebates can be offered easily too. Reduction of Wastage: Having access to information regarding the number of people usually availing mess facilities, a better estimate is provided to the caterers regarding the amount to be cooked on a certain day. Thus, reducing wast- age which otherwise may not have been possible .

Negotiating deals with Mess Contractors:

Armed with this data, when council members approach a new caterer or re-negotiate contracts, they would be able to provide him with a more precise estimate of average number of people eating each meal. Hence, providing them with stronger bargaining power compared to status quo.

2. When he eats outside the mess, the burden on his pocket could rise substantially.

So, even though the person gets the right to pay for what he eats in the mess, that right will have to be exercised by him after due thought and diligence, else he could end up paying more than before.

There would be a marginal increase in the cost borne by people who enroll in the Lump-Sum scheme. They would get all 4 meals at an increase of Rs. 10 per day (from the earlier Rs.80). It is imperative to note that these people would still be getting an overall discount as the food that they eat still costs Rs. 130 (and the cost borne by them is Rs. 90). Since the people who avail of the Usage-Based scheme pay a higher amount per meal, the contractor would end up with the same amount that he is getting now.

Another consideration is that the contractor will have to now use lesser raw materials as food consumption will likely go down. This results in a win-win situa- tion as students get the right to pay for what they eat, the contractor gets the same amount of money with lesser costs and there is only a marginal increase in the price of the Lump-Sum scheme. The one downside that could occur is if food runs out on certain days when everyone exercises their right to eat in the mess; the contractor would not be to blame.

Right v/s Wrong

What we have here is a trade-off between community based and usage based models. In the community based model, although the costs borne by certain individuals are less, it is literally at the expense of individuals who end up missing their meals. To reduce the extent of victimization of these individuals, a usage based model comes to the rescue, where one is charged based on his consumption. There needs to be a correla- tion between consumption and expenditure for the system to remain fair. Lower costs for the Lump-Sum scheme should not come at the cost of your right to pay only for what you eat. Precedence for this already exists – IIM A and IIM C, for example, also give students an option between the Lump Sum Scheme and the Usage Based Scheme, IITB should consider doing so too.

What’s the way ahead?

There are certain benefits of Biometric Systems that cannot be ignored; the cost for implementation too is not prohibitive. Additional benefits include shifting to usage based models and maybe in the near future, one could be allowed to exit the messing facility completely and/or join another hostel’s mess if he so desires (which is not possible without a biometric system). It is up to the respective Mess Councils to negotiate with mess contractors to get the best rates for both schemes and provide this option as a right to the students.

*The analysis has been done under the assumption that same rates will prevail next year as well. The calculations have been corroborated by the Leaf and Loaf contractor (serves H5 and H8)