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I don't understand your comment. What's wrong with private companies profiting from providing public services? For instance, if you outsource mechanical mainte

I don't understand your comment. What's wrong with private companies profiting from providing public services? For instance, if you outsource mechanical maintenance for your firetrucks, is that wrong also since a company can profit from it?

kuschku 10y ago
> What's wrong with private companies profiting from providing public services? Simply: Tax money is wasted. Already rich investors end up enriching themselves further, tax money ends up in the taxes of the rich instead of improving the life of the poor. Sometimes it makes sense (see economies of scale), but often it does not, because the private contractor has to design one system that works everywhere, and has to deal with a lot more complexity due to that than a local system. Often expenses also occur elsewhere that wouldn’t in a local system. And paying out to investors is also a common example of additional expenses. Especially if the state has to provide a guarantee the company will be a specific amount of money in profit from the riders of the project. That’s also why in Germany right now there’s lots of protest against privatizing the Autobahn.
- ghaff 10y ago
  By that argument, no one should outsource anything. You suppose that every company should handle its own janitorial services because their contractor is making money off of them.
  - kuschku 10y ago
    Well, no. Not no one. But a government has the task to always use the least costly bid. And that can also be "build it from scratch". In this example, that’d be cheaper.
    - ghaff 10y ago
      >In this example, that’d be cheaper. I'm no particular fan of Uber. But the idea that some small city government could create a more economical mobile taxi app seems unlikely to me. Now maybe this should be some shared local government infrastructure app but those sort of things aren't that common. I know I use checks to make various payments to my town because the online service actually costs me an incremental fee.
    - notatoad 10y ago
      that's not true - the government has the responsibility to use the least costly qualified bid. if the government of innisfil feels they aren't qualified to build their own uber competitor (and they probably aren't) then self-building isn't an option on the table.
    - prostoalex 10y ago
      They already have a bus system built from scratch (as well as some metal parts, I assume). It's too costly: "Council considered the options for fixed-route bus service during the 2016 Budget deliberations ($270,000 annually for one bus and $610,000 for two buses), but it was determined that they would be too costly for the limited level of service that they would provide" But now you're saying they should buy vehicles, hire drivers, hire an iOS dev, an Android dev, a back-end coder, an ops team to watch the servers 24/7, a coder to handle payment back-end, a general manager to run the whole thing, pay AWS or GCP or a bare metal hoster for the servers, hire customer support to handle issues, pay Google (or Bing) maps commercial license fee, cover gas, maintenance, tires for all of the aforementioned vehicles and still have a lot of money left over from that fat $610,000 check to justify this project?
      - wasted_intel 10y ago
        this. There are so many costs to operating a service like this.
      - michaelmrose 10y ago
        What about situating a small number of operators in an existing office with existing phone lines and communicating with a small number of drivers using smart phones?
        prostoalex 10y ago
        Do operators' compensation packages, phone bills, office rental, equipment expenses and utility bills add up to an amount above or below $610,000?
      - tzs 10y ago
        Quite a few of those items can be eliminated or reduced. I think people suggesting "build it from scratch" mean build a local Uber-like service from scratch, which like Uber would not own vehicles itself or pay for gas or maintenance. That gets rid of the buying vehicles, and covering gas, maintenance, and tires. Dispatching drivers could be done with pairs of text messages to the driver, of the form "pick up <NAME> at <ADDRESS>" and "drop off <NAME> at <ADDRESS>". The driver can tap on the addresses in those text messages to open them in the driver's smartphone's map application. That gets rid of the need for a commercial map license. I don't see any need for a payment back end. The town can require drivers to accept payments directly using one or more specified methods (such as Square). It probably doesn't need native iOS and Android apps. A web-based application should be sufficient. They already have a website. They should be able to add the back end stuff to that, so no new costs for ops or hosting. (That is assuming that they have access to the code for their site and can make changes. Their site is run by Pathfive.ca, which seems to be a company that specializes in building and hosting websites for educational institutions and local governments. It may be that the town only supplies content to fill in templates).
    - tblair 10y ago
      I think you're almost right. If the federal government built it and amortized the cost across every town/city in Canada then it could very well be cheaper. I think siblings are correct that a one off would be a mistake though.
      - pbourke 10y ago
        > If the federal government built it Things working the way they do, the government could not build a system that even approaches a service like Uber.
        astrange 10y ago
        Anyone can build Uber. The hard part is their business model of convincing drivers to lose money working for you.
    - terryf 10y ago
      Governments indeed have the requirement to use the least costly bid. I wonder if that's actually part of the problem. Although, I really don't know how to make the rules better. Anyway, from personal, anecdotal experience, I have hired building contractors, first time around I took the cheapest offer, then two years later I needed the same work done for another room and then didn't take the cheapest offer (the one I took was about 25% more). The result could not have been more different. The cheap room has cost me more than 2x the original price, because I've had to redo most of it during the last 7 years and the second room shows no signs of needing any more work anytime soon. So, taking the longer term view, sometimes it's better to pay more upfront to get more quality. Except that quality in this sense is really hard to quantify and put into rules.
    - pikzen 10y ago
      >a government has the task to always use the least costly bid. lolno A government has the task to provide the best service for its citizens with its budget. We've seen what least costly bid leads to: degradation in quality of all public services impacted.
- jimmywanger 10y ago
  > Simply: Tax money is wasted. That is similar to saying that you're wasting money by paying a plumber to fix your pipes, instead of buying all the tools and fixing it yourself. If the government doesn't have the capital, expertise, or budget for investment in infrastructure, it makes perfect sense to outsource it. Why would a county pay a bus driver, mechanics, and invest in a fleet of buses when it's less expensive to outsource it?
  - kuschku 10y ago
    > Why would a county pay a bus driver, mechanics, and invest in a fleet of buses when it's less expensive to outsource it? That’s a good argument. Especially once economics of scale come into play. But that’s not the case in this example. The government is outsourcing something that would be massively cheaper if purpose-built for their town. Uber has a lot of expenses and complexity to handle corner cases that will never occur in this town – outsourcing is wasteful. That’s like building a heating system into a house in Phoenix.
    - jimmywanger 10y ago
      > But that’s not the case in this example. I don't understand. Software has ultimate economies of scale. Also, they're not paying Uber a fixed cost, they're strictly subsidizing the ride. They can opt out at any time, if I'm reading the article correctly. > Uber has a lot of expenses and complexity to handle corner cases that will never occur in this town – outsourcing is wasteful. That’s like building a heating system into a house in Phoenix. One of us is misunderstanding the point of software. Just because you're not using certain capabilities doesn't mean you're charged extra for them. To your point, did you waste money by buying your IDE if you don't use each and every feature, because outsourcing your dev environment is "wasteful"?
      - kuschku 10y ago
        > Just because you're not using certain capabilities doesn't mean you're charged extra for them. But you are. Such a system for a small town doesn’t need native apps, it doesn’t need to look beautiful. You can use a single PhoneGap app for all OSes, also the same on the web. You can avoid the entire payment infrastructure, and have riders pay the drivers directly. Alternatively, use Square, and you won’t have to make your own payment system either way. A lot of uber’s costs only appear at huge scale. This town doesn’t need uber, it needs a simple ride sharing service like every town in the second or third world has – and those even work without any app.
- jonathankoren 10y ago
  Tax money is not necessarily wasted. There are plenty of places where outsourcing the work is the economical thing to do. The question is whether or not in a particular case if the outsourcing contract is economical. A blanket argument that tax money shouldn't go to private individuals makes no sense in an economy that isn't completely nationalized, since the government quite literally doesn't do everything. While I don't know the particulars of the Autobahn privatization controversy, I do know about toll booth and parking meter privatization in the United States, and yes, they tend to be bad deals for the tax payers, because the government wants a quick hit of money, in exchange for multiple times that money over the long term. Take for instance, Chicago's parking meter privatization, where the city got $1.15 billion in exchange for all the revenue from parking meters over the next 75 years In 2015, the meters brought in $156 million, so we're talking at least 7x.[0] [0] http://chicago.suntimes.com/news/parking-meters-garages-took-in-156m-but-city-wont-see-a-cent/ http://chicago.suntimes.com/news/parking-meters-garages-took...

kuschku 10y ago

> What's wrong with private companies profiting from providing public services? Simply: Tax money is wasted. Already rich investors end up enriching themselves further, tax money ends up in the taxes of the rich instead of improving the life of the poor. Sometimes it makes sense (see economies of scale), but often it does not, because the private contractor has to design one system that works everywhere, and has to deal with a lot more complexity due to that than a local system. Often expenses also occur elsewhere that wouldn’t in a local system. And paying out to investors is also a common example of additional expenses. Especially if the state has to provide a guarantee the company will be a specific amount of money in profit from the riders of the project. That’s also why in Germany right now there’s lots of protest against privatizing the Autobahn.

ghaff 10y ago
By that argument, no one should outsource anything. You suppose that every company should handle its own janitorial services because their contractor is making money off of them.
- kuschku 10y ago
  Well, no. Not no one. But a government has the task to always use the least costly bid. And that can also be "build it from scratch". In this example, that’d be cheaper.
  - ghaff 10y ago
    >In this example, that’d be cheaper. I'm no particular fan of Uber. But the idea that some small city government could create a more economical mobile taxi app seems unlikely to me. Now maybe this should be some shared local government infrastructure app but those sort of things aren't that common. I know I use checks to make various payments to my town because the online service actually costs me an incremental fee.
  - notatoad 10y ago
    that's not true - the government has the responsibility to use the least costly qualified bid. if the government of innisfil feels they aren't qualified to build their own uber competitor (and they probably aren't) then self-building isn't an option on the table.
  - prostoalex 10y ago
    They already have a bus system built from scratch (as well as some metal parts, I assume). It's too costly: "Council considered the options for fixed-route bus service during the 2016 Budget deliberations ($270,000 annually for one bus and $610,000 for two buses), but it was determined that they would be too costly for the limited level of service that they would provide" But now you're saying they should buy vehicles, hire drivers, hire an iOS dev, an Android dev, a back-end coder, an ops team to watch the servers 24/7, a coder to handle payment back-end, a general manager to run the whole thing, pay AWS or GCP or a bare metal hoster for the servers, hire customer support to handle issues, pay Google (or Bing) maps commercial license fee, cover gas, maintenance, tires for all of the aforementioned vehicles and still have a lot of money left over from that fat $610,000 check to justify this project?
    - wasted_intel 10y ago
      this. There are so many costs to operating a service like this.
    - michaelmrose 10y ago
      What about situating a small number of operators in an existing office with existing phone lines and communicating with a small number of drivers using smart phones?
      - prostoalex 10y ago
        Do operators' compensation packages, phone bills, office rental, equipment expenses and utility bills add up to an amount above or below $610,000?
    - tzs 10y ago
      Quite a few of those items can be eliminated or reduced. I think people suggesting "build it from scratch" mean build a local Uber-like service from scratch, which like Uber would not own vehicles itself or pay for gas or maintenance. That gets rid of the buying vehicles, and covering gas, maintenance, and tires. Dispatching drivers could be done with pairs of text messages to the driver, of the form "pick up <NAME> at <ADDRESS>" and "drop off <NAME> at <ADDRESS>". The driver can tap on the addresses in those text messages to open them in the driver's smartphone's map application. That gets rid of the need for a commercial map license. I don't see any need for a payment back end. The town can require drivers to accept payments directly using one or more specified methods (such as Square). It probably doesn't need native iOS and Android apps. A web-based application should be sufficient. They already have a website. They should be able to add the back end stuff to that, so no new costs for ops or hosting. (That is assuming that they have access to the code for their site and can make changes. Their site is run by Pathfive.ca, which seems to be a company that specializes in building and hosting websites for educational institutions and local governments. It may be that the town only supplies content to fill in templates).
  - tblair 10y ago
    I think you're almost right. If the federal government built it and amortized the cost across every town/city in Canada then it could very well be cheaper. I think siblings are correct that a one off would be a mistake though.
    - pbourke 10y ago
      > If the federal government built it Things working the way they do, the government could not build a system that even approaches a service like Uber.
      - astrange 10y ago
        Anyone can build Uber. The hard part is their business model of convincing drivers to lose money working for you.
  - terryf 10y ago
    Governments indeed have the requirement to use the least costly bid. I wonder if that's actually part of the problem. Although, I really don't know how to make the rules better. Anyway, from personal, anecdotal experience, I have hired building contractors, first time around I took the cheapest offer, then two years later I needed the same work done for another room and then didn't take the cheapest offer (the one I took was about 25% more). The result could not have been more different. The cheap room has cost me more than 2x the original price, because I've had to redo most of it during the last 7 years and the second room shows no signs of needing any more work anytime soon. So, taking the longer term view, sometimes it's better to pay more upfront to get more quality. Except that quality in this sense is really hard to quantify and put into rules.
  - pikzen 10y ago
    >a government has the task to always use the least costly bid. lolno A government has the task to provide the best service for its citizens with its budget. We've seen what least costly bid leads to: degradation in quality of all public services impacted.
jimmywanger 10y ago
> Simply: Tax money is wasted. That is similar to saying that you're wasting money by paying a plumber to fix your pipes, instead of buying all the tools and fixing it yourself. If the government doesn't have the capital, expertise, or budget for investment in infrastructure, it makes perfect sense to outsource it. Why would a county pay a bus driver, mechanics, and invest in a fleet of buses when it's less expensive to outsource it?
- kuschku 10y ago
  > Why would a county pay a bus driver, mechanics, and invest in a fleet of buses when it's less expensive to outsource it? That’s a good argument. Especially once economics of scale come into play. But that’s not the case in this example. The government is outsourcing something that would be massively cheaper if purpose-built for their town. Uber has a lot of expenses and complexity to handle corner cases that will never occur in this town – outsourcing is wasteful. That’s like building a heating system into a house in Phoenix.
  - jimmywanger 10y ago
    > But that’s not the case in this example. I don't understand. Software has ultimate economies of scale. Also, they're not paying Uber a fixed cost, they're strictly subsidizing the ride. They can opt out at any time, if I'm reading the article correctly. > Uber has a lot of expenses and complexity to handle corner cases that will never occur in this town – outsourcing is wasteful. That’s like building a heating system into a house in Phoenix. One of us is misunderstanding the point of software. Just because you're not using certain capabilities doesn't mean you're charged extra for them. To your point, did you waste money by buying your IDE if you don't use each and every feature, because outsourcing your dev environment is "wasteful"?
    - kuschku 10y ago
      > Just because you're not using certain capabilities doesn't mean you're charged extra for them. But you are. Such a system for a small town doesn’t need native apps, it doesn’t need to look beautiful. You can use a single PhoneGap app for all OSes, also the same on the web. You can avoid the entire payment infrastructure, and have riders pay the drivers directly. Alternatively, use Square, and you won’t have to make your own payment system either way. A lot of uber’s costs only appear at huge scale. This town doesn’t need uber, it needs a simple ride sharing service like every town in the second or third world has – and those even work without any app.
jonathankoren 10y ago
Tax money is not necessarily wasted. There are plenty of places where outsourcing the work is the economical thing to do. The question is whether or not in a particular case if the outsourcing contract is economical. A blanket argument that tax money shouldn't go to private individuals makes no sense in an economy that isn't completely nationalized, since the government quite literally doesn't do everything. While I don't know the particulars of the Autobahn privatization controversy, I do know about toll booth and parking meter privatization in the United States, and yes, they tend to be bad deals for the tax payers, because the government wants a quick hit of money, in exchange for multiple times that money over the long term. Take for instance, Chicago's parking meter privatization, where the city got $1.15 billion in exchange for all the revenue from parking meters over the next 75 years In 2015, the meters brought in $156 million, so we're talking at least 7x.[0] [0] http://chicago.suntimes.com/news/parking-meters-garages-took-in-156m-but-city-wont-see-a-cent/ http://chicago.suntimes.com/news/parking-meters-garages-took...