As reported in the Wall Street Journal Metropolis section this morning, a smartphone coffee app offering subscription-based pricing at participating New York cafes will soon be available. The program, called “CUPS” is already popular in Tel Aviv and will be launching in New York City later this month.

As quoted in the article, although I suspect that the bottomless cup model will be popular with consumers, I’m doubtful that such a model will ultimately be sustainable without some refinements that recognize quality differentiation. “All you can eat” restaurants may be viewed as a good value by some but are generally not known for the quality of their menu items. The coffee app component is just a modern twist on an old idea.

Andrew Hetzel, a coffee industry specialist who is a Board Member of the Specialty Coffee Association of America, said he thinks the CUPS model can be popular with consumers but has concerns about the “bottomless cup” concept from the perspective of quality.

“My fear is that flat-rate pricing model will be a disincentive to the use of quality coffee and reduce overall consumption, making the app a poor value for consumers,” said Mr. Hetzel.

Mr. Hetzel said the New York specialty coffee scene was in its infancy just five years ago, far behind cities like Portland and San Francisco, but has recently blossomed into one of the most vibrant in the world.

“What has allowed so many coffee shops to flourish in New York is ‘specialty coffee,’ a concept driven by quality differentiation and, not surprisingly better taste at a higher price,” said Mr. Hetzel.

Read the full article here: Would You Pay $85 a Month for Unlimited Espresso?

Coffee App: New York City is getting a new version of the bottomless cup of coffee.

A subscription-model coffee club, in which customers can pay a monthly fee to get unlimited java from selected cafes, launches Monday in the city after a successful run in Israel.

The CUPS mobile app is designed to compete with the smartphone-driven loyalty card programs offered by coffee giants Starbucks SBUX -0.05% and Dunkin’ Donuts.

Not surprisingly, the price varies depending on the customer’s preferred high-end coffee. New Yorkers who prefer espresso will pay a monthly fee of $85 for unlimited coffee at about 40 independent cafes citywide.

A subscription from unlimited brewed, drip, pour-over or filtered coffee or tea is $45 a month.

Those who need a little less of a buzz can also purchase packages of five, 10 or 20 coffees per month with prices depending on the type of drink.

Similar to a MetroCard, the unlimited subscription has just one limitation–customers can buy only one cup every half hour.

And as a perk, anyone who signs up to the unlimited models will receive a month of free coffee.

“It’s kind of like the Starbucks app but for independent coffee shops,” said app co-founder Gilad Rotem. “It’s designed to give independent coffee shops that opportunity to compete with Starbucks and Dunkin’ Donuts.”

The app is currently in Beta and being tested by users going to participating coffee shops, which include Irving Farm Coffee Roasters, Pushcart Coffee, the Bean, O Cafe, Madman Espresso, UR CUP, Cafe Panino Mucho Giusto, Café Integral, Bee’s Knees Baking Co. and the Uncommons.

While most of the participating cafes are located in Manhattan, Wild in Williamsburg and Coffeed in Queens will also use CUPS.

The app will be available for download from the App Store or Google Play on April 14.

Andrew Hetzel, a coffee industry specialist who is a Board Member of the Specialty Coffee Association of America, said he thinks the CUPS model can be popular with consumers but has concerns about the “bottomless cup” concept from the perspective of
quality.

“My fear is that flat-rate pricing model will be a disincentive to the use of quality coffee and reduce overall consumption, making the app a poor value for consumers,” said Mr. Hetzel.

Mr. Hetzel said the New York specialty coffee scene was in its infancy just five years ago, far behind cities like Portland and San Francisco, but has recently blossomed into one of the most vibrant in the world .

“What has allowed so many coffee shops to flourish in New York is ‘specialty coffee,’ a concept driven by quality differentiation and,
not surprisingly better taste at a higher price,” said Mr. Hetzel.

CUPS launched in Israel in September 2012, and now partners with more than 80 cafes in Tel Aviv and has just launched in Jerusalem.

The business, which now employs 15 people, was the brainchild of five friends from high school, said Mr. Rotem.

“We’re all big coffee drinkers, but none of us is from a coffee industry background,” he said. “We try to give independent coffee shops the benefit of a franchise or network but we’re not taking away from their independent style.”