17 ms·
When there is a monopoly, more densely populated areas cross subsidise more sparsely populated areas. If there isn't a monopoly then companies are incentivised
by robjan 7y ago
When there is a monopoly, more densely populated areas cross subsidise more sparsely populated areas. If there isn't a monopoly then companies are incentivised to pick and choose whos mail to carry making it more expensive for everyone else.
- ailideex 7y agoI would think there are ways to achieve the same thing without having a monopoly.
- ghaff 7y agoYou don't need a monopoly. But if the government/quasi-government entity is effectively letter delivery of last resort while private companies pick off the more lucrative routes, they're going to either need subsidies or price delivery at a level that it may be untenable. ADDED: IOW, you could have an external taxpayer-supported "rural mail delivery" department that has a charter to deliver a letter for a quarter anywhere in the country rather than providing a subsidy within the system. It's mostly academic at this point. (And the reality is most private package delivery is fairly universal because there are business advantages to having a fairly complete delivery network even if it's not necessarily the most efficient decision at the micro level.)
- BurningFrog 7y agoThat's a mildly persuasive theoretical argument. I don't think empirical data are especially kind to it. It also ignores the fact that monopolies have no incentive to produce high quality and ever improving product. They tend to get focused on maximize staff comfort over customer satisfaction.
- Symbiote 7y agoIt happens in the UK, where the private companies won't deliver to remote islands and parts of the mountains in Scotland, or charge an additional fee.