How’s the bathroom business doing, Jim? Well, the profitability ratio stinks, but there’s a lot of liquidity.
Nothing is more common as having to go to the bathroom, yet there are few examples of for-profit bathrooms in our otherwise profit-oriented cities. Even though bathroom access is often bartered indirectly – “customers only” comes to mind – such access is almost never charged for outright.
Outside of sports arenas and shopping malls, bathrooms also tend to be quite small. This is understandable, given the high cost of commercial real estate. Nevertheless it runs somewhat counter to the natural economy of scale that is bathroom installation. Once you have already ripped up the floor and sorted out the plumbing, the cost of each additional toilet or sink may be comparatively low.
There are, perhaps, reasons to think that for-profit bathrooms will become more common soon:
- Micropayments
Transaction costs are the scourge of any high-liquidity, low-margin market, and the bathroom business is no exception. If you are planning to charge a dollar (say) per person, then obviously you are not going to turn a profit if you have to hire somebody to man the till or pay a transaction fee to a payment systems company. Only with an automated, extremely low-cost payment system might for-profit bathrooms actually work.
- Bathroom Apps
By telling you where nearby bathrooms are, apps could allow bathrooms to be findable even if they are in relatively out-of-the-way locations where real estate is not so pricey: in basements, second floors, side streets, etc. Apps could also let people reserve the use of a bathroom immediately ahead of time, or at least check to see if there is a bathroom available.
- Transit Tech
As transit systems introduce features like, for example, two-hour transfer passes, their passengers will be able to get off a bus or train to use bathroom without being charged a double fare. Transit apps can also help in this regard: passengers can now check to see when the next bus is coming, and so can estimate whether or not they will have time to use the bathroom without missing it. This will also allow passengers to wait indoors for the bus when the weather is bad; and in some cases, perhaps, do so near a for-profit bathroom.
- Robots
It might also be possible to automate much, or at least part of, the process of cleaning a bathroom, which could go a long way towards making a public bathroom profitable. Expensive bathroom cleaning robots might also make public bathrooms more of an economy of scale; the toilet-to-robot ratio would increase the more toilets a bathroom has.
- Babies, Boomers, Bloggers
[Okay, I may be tipping my hand here by including bloggers in this group]. Demographics and technology really are changing where many people do (their) business. The Baby Boomers are getting older. Many of them are approaching partial or full retirement and seeking to work or relax more in public spaces close to their homes, rather than continue making long commutes five days a week. Mothers too (and sometimes fathers), with fewer children and better computers and careers than ever before, are spending more time in public spaces with their babies. They need places where they can breastfeed and change diapers, and bathrooms large enough to fit in strollers.
Of course, a profitable bathroom does not need to be a for-profit bathroom. It could instead be that bathrooms will become more common, cleaner, or less costly for the public sector to provide.
Future Economics 