When Colleges Offer ‘Free Laundry’…

By Myles Mattenson | Jan 06, 2010

A laundry owner located near a state university recently posed an interesting legal question. It seems that the school has begun offering "free laundry" to students residing in its dormitories. And, in fact, this appears to be somewhat of a trend, as an increasing number of colleges and universities are offering this perk to dorm residents.

The laundry owner is questioning whether or not he has a potential case against the university, related to antitrust or predatory pricing. He and other store owners in the same situation consider this unfair competition from their respective states, which are offering the same service at no cost to consumers.

Although I see the laundry owner’s point of view, taking this fellow's case on a contingency basis would not be my first choice.

The school probably figures that to rent out rooms in the dormitories added incentives are required in this economy – incentives such as free laundry service, discounted food prices in the vending machines and so on. In fact, the university probably would argue that nothing is provided for free since the dorm room is provided at a cost; that cost includes lighting, electricity, WiFi, security, laundry machine access, etc. The school probably charges for the soap in their vending machines, for those students who don’t purchase detergent at the supermarket.

“Predatory pricing” can be illustrated by two hamburger stands next to one another, where one owner sells below labor and food costs with the intent of putting the competitor out of business. However, the university's only intent is to lease rooms in its dormitories.

Self-service laundries are customarily built near apartments without regard to laundry room access by tenants, and these laundromats attract customers for reasons of better equipment, cleanliness, more machines, etc. Perhaps the same logic applies to coin laundries constructed near some universities, but clearly not all universities.

Perhaps it would be interesting to take a survey of the university laundry facilities in these various states wherein the problem lies and see what the comparison is between university machines (quantity and capacity) and the impact on neighboring self-service laundries.

One of my associates suggested the laundry owner add a 50-cent beer night as a way to attract college students away from the dormitory. OK, that might not be his best idea, but it does point out the possible need to provide special services that are not offered by the university as a means by which the owner can entice students back to his laundry business.