Water Kiosks and the Trust Deficit in Water Utilities

Recent years have seen a proliferation of drinking water kiosks in American cities. These free-standing, automated vending machines sell “purified” drinking water to customers who drive up to kiosks and fill their own containers with water typically priced at $0.25-.35 per gallon. The two leading companies alone boast over 2,100 known locations across the United States. Their marketing materials suggest that urban water kiosks were created in response to the failure of municipal water utilities. Virtually all drinking water utilities provide water at a lower unit cost than water kiosks, and utilities are subject to drinking water regulations that kiosks are not. The proliferation of kiosks suggests that customers choose this higher-cost product because: a) they perceive utility water quality as inferior to kiosk water quality; b) they do not trust utility organizations; or c) both. Whatever the precise appeal of water kiosks to customers, they represent a serious challenge to utilities’ reputations and legitimacy. They also represent a potential threat to public health, since water purchased from kiosks is not as carefully regulated, and people may turn to sugary drinks instead of low-cost drinking water. The present study uses spatial location data to analyze the factors underlying demand for kiosks. We find that kiosks are most likely to locate in neighborhoods with relatively low levels of education and high percentage Hispanic populations. That water kiosks—which are very expensive relative to conventional drinking water service—grow in these areas suggests a broad misperception of water quality rooted in distrust of utilities.