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New NYC coffee chain aims to undercut Starbucks with China-inspired model

Max Crowley was an early employee at Uber who left in July 2018 and traveled the world for a year. When he discovered Luckin Coffee in China, he was inspired to take the Luckin model to America, plus a dash of his time at Uber.

He came up with Bandit, which opened its first location in Manhattan on Wednesday a couple blocks from Grand Central Terminal—directly across the street from a Dunkin Donuts.

Bandit’s pitch: cheaper and faster than Starbucks and the other big chains. All customers place their order on Bandit’s mobile app. “Bandit is coffee at the push of a button,” Crowley tells Yahoo Finance. “It’s ready in hopefully less than a minute.”

Where the Luckin influence comes in is the pop-up model. Luckin launched in 2017 and has opened 3,680 stores in China in just two years. (Luckin went public on the Nasdaq last May, and its CFO says Luckin will have more stores in China than Starbucks by the end of the year.)

Crowley says Bandit can multiply with similar speed. Its locations are like a coffee-shop-in-a-box: each one has a small footprint (11 feet by 11 feet) and costs just $45,000 to $60,000 to build out and open.

Bandit aims to open two more locations in New York by the end of January.

Bandit's coffee counter at 466 Lexington Avenue in New York City. (Photo: Daniel Roberts/Yahoo Finance)

Bandit’s pitch: speed 

A large sign outside the first Bandit location promises “the easiest cup of coffee ever” and says it should not take longer than two minutes.

Yahoo Finance put Bandit to a speed test on its second day in business. Before heading to the Bandit coffee shop, we downloaded the app, filled out our information, added a photo and linked a credit card to the account. Upon arrival, we opened the app and ordered one hot “Special Christmas Spirit Latte” with Oatly-brand oat milk and one cold brew with 2% milk. The order totaled $8.17 including taxes. A simple “hot coffee” on the app is $2 before taxes. (“We aim to be less than Starbucks in our pricing,” Crowley says.)

When we placed the order, we started a stopwatch. When the order is sent to the baristas, the app generates a ticket number. The cold brew was ready in exactly one minute, while the latte took an additional 40 seconds. Both drinks were ready for pick up in under two minutes. 

Then, the moment of truth: the taste. Although speed is Bandit’s bigger promise, we were pleasantly surprised with the coffee quality. Bandit’s beans are roasted locally at Pulley Collective in Red Hook, Brooklyn. The company plans to eventually sell its own beans in store. (It is also offering Stumptown cold brew on draft.)

Bandit’s app currently offers 14 different hot drinks, 12 cold drinks, assorted snacks and even a coffee subscription. The subscription costs $20 per month for unlimited $1 hot coffee, which costs $2 a cup without the subscription.

Tech-first coffee

Crowley makes no secret of how he directly applied Luckin’s model to Bandit. He also says that at a time when China is copying many business ideas from America, he liked the idea of going in the opposite direction, bringing a concept from China to the U.S.

“We were super inspired by how everything is tech-forward at Luckin,” he says, “and the super-small footprint. So we’re super focused on this small footprint that we think can go in a lot of places, similar to what Luckin has done.”

Of course, Starbucks, Dunkin, and other chains have mobile ordering. You’d be excused for asking: Does New York City really need yet another fast coffee chain? And one launched by an Uber alum?

Crowley’s response is that he thinks fast coffee can be done better than Starbucks, Dunkin, and other chains have done it so far—with good tech. 

He sees a parallel between Uber and Bandit: “It’s everyday things. So people need rides around town every day, and there’s nothing more everyday than coffee. I saw firsthand what bringing mobile technology to everyday things can do, it’s super transformative, so coffee seemed like the next thing to go after.” (Bandit has been self-funded so far by Crowley and his co-founder James Gallagher, plus investments from some of Crowley’s Uber friends.)

For now, Bandit only takes orders through its app. So, what about people who don’t have a smartphone or prefer to use cash?

Crowley says Bandit is open to allowing other ordering methods eventually, as long as it doesn’t sacrifice speed. “We’ll definitely look at that, we want to be accessible to everyone,” he says. “We’re about speed and convenience, not about being app-only. So we’ll do whatever it takes to make sure everybody can be served, as long as it continues to be fast and convenient. [But] I saw firsthand at Uber, you’d be surprised: many people of all ages have smartphones and are starting to learn how to use the technology.”

Heidi Chung is a reporter at Yahoo Finance focused on covering food. Follow her on Twitter @heidi_chung.

Daniel Roberts is a senior writer and live show host at Yahoo Finance. Follow him on Twitter at @readDanwrite.

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