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Something I don't normally see discussed re privatization of US Postal Service is that it doesn't appear to be a novel idea. Singapore's postal service, SingPo

• mktk1001 6y ago
  There's no incentive for public companies to serve rural areas.
  • reaperducer 6y ago
    You're being downvoted because most people believe it when FedEx or Amazon or UPS say they serve 100% of Americans. There's no way they would do so if they had to have the same footprint as the USPS. Is Amazon going to run ships around the Great Lakes to deliver mail to vessels moving between ports? Is FedEx going to send a truck an a four-hour round-trip to deliver a single letter to someone on an indian reservation for 50¢? Is UPS going to charter bush planes to deliver mail to remote outposts in Alaska, Samoa, Guam, and the Northern Mariana Islands? There are post offices so far out in the middle of nowhere that while they have a concrete pad for handicapped parking because it's required by the ADA, no customers ever arrive by car, so there's also hitching posts for people's horses, which is the primary mode of transportation. I don't see Amazon doing that. It'll just say, "Wait 20 years for your mail while we work the bugs out of our super-cool drone delivery service!"
    • bhupy 6y ago
      These are all excellent arguments in favor of keeping the US Postal Service, but insufficient/inadequate arguments in favor of maintaining the USPS's legal monopoly on first class mail.
      • djur 6y ago
        The problem is that the political factions in the US who are in favor of eliminating USPS monopolies are also almost universally opposed to the government subsidizing USPS.
        • bhupy 6y ago
          Okay, we can agree that those political factions are wrong / bad. I'm just trying to have a nuanced discussion on the merits of a public postal service vs a public monopoly on paper mail. It's possible to half agree with those political factions while still wanting to keep government subsidized public mail.
          • djur 6y ago
            It's not a matter of _keeping_ government subsidized public mail, because that does not really exist right now. I read "let's keep USPS state owned / public" as suggesting that the existing relationship between the USPS and the US government (a largely self-funding independent agency) should be kept as-is, but that the postal monopoly should be broken up.
          • runako 6y ago
            I think it's fair to have the discussion, but it would make sense that any company that wanted the same privileges as the USPS would have similar obligations. Essentially, if we were to allow competition, we want all entrants to be fully self-sufficient and not dependent on USPS. For example, if they want access to consumer mailboxes in an area, they need to cover 100% of the addresses USPS covers without routing packages through USPS. That way, they don't have the ability to surgically cherry-pick the most lucrative aspects and leave USPS with the crappy bits due to its mandates. Given that USPS and FedEx are roughly $10 for a 3-day letter, I don't know which carriers would even want to deliver paper mail.
  • chrisseaton 6y ago
    Why do you think the Royal Mail serves rural areas?
    • djur 6y ago
      Because the Postal Services Act 2011 mandates it, as does the EU, and it has been a source of financial difficulty in any case. The UK is the size of the state of Oregon and about five times as densely populated. The UK also has a much more powerful central regulatory apparatus -- there is no US body that has as much power over private carriers as Ofcom has over Royal Mail.
      • chrisseaton 6y ago
        > Because the Postal Services Act 2011 mandates it Exactly. > there is no US body that has as much power over private carriers as Ofcom has over Royal Mail I thought regulating inter-state commerce and especially mail was something the US federal government has historically done? In fact isn't there even a federal law enforcement agency specifically for it?
        • djur 6y ago
          The US equivalent to Ofcom is the FCC, which is not as powerful in statutory authority nor as aggressive in practice. Ofcom, among other things, regulates rates and service days for Royal Mail. I do not believe FedEx or UPS would accept this degree of regulation in exchange for the liberty to deliver letters to mailboxes. What's also significant is that Royal Mail privatization is less than a decade old. From a policy perspective, it's still an experiment. It doesn't actually have any competition for letter delivery. That Royal Mail has survived despite the lack of a statutory monopoly does not mean that the same would be true of USPS.
  • missedthecue 6y ago
    Uhh money? Why does UPS deliver packages to rural areas? I live in a rural area and the majority of my packages arrive by UPS or Fedex rather than the USPS.
• 0xddd 6y ago
  How do these companies perform compared to the USPS? Just knowing that they're privatized without any mention of customer satisfaction, cost, or other comparative metrics doesn't say much about whether it's a good idea. (I don't believe anyone's main contention is that it's "novel")
  • bhupy 6y ago
    I think it's certainly worth comparing which model produces more superior outcomes. We ought to compare the per capita expenditure, and the median delivery time. But also regardless of which is better, why is it all-or-nothing? Why can't UPS/Amazon/FedEx/DHL ALSO co-exist with the USPS? Today, they are prohibited from delivering any first class mail to a mailbox, by law.
    • vinay427 6y ago
      I think that would be fine if they also gave a mandate to deliver letters at a fixed price regardless of destination. Otherwise, USPS gets left being forced to serve costly and inaccessible rural destinations while private companies don't bother serving those customers or charge far higher rates there.
  • chrisseaton 6y ago
    The Royal Mail will usually deliver a letter anywhere in the country next-day for a 76p. Can't really ask for more than that in my opinion.
• unethical_ban 6y ago
  On the surface, the Constitution specifically cites a role for the federal government in operating a postal service. Now, why does it have exclusivity for letter service? I don't know the history. I'd rather look at how it can do an already pretty good job, better. I know I go to USPS when I ship anything. Why isn't it in the banking business? Why doesn't it operate an official email / Identity Provider? Among other services that a correspondence service, a federal service with the most physical public spaces, could offer?
  • sdinsn 6y ago
    > specifically cites a role for the federal government in operating a postal service. It specifically grants Congress the power to operate a postal service. Just because they have the power doesn't mean they have to do it.
  • bhupy 6y ago
    The Constitution argument merely answers why things are the way that they are, they don't tell us whether the privatized model we see in the UK/Germany/Singapore/Japan is better or worse. > I'd rather look at how it can do an already pretty good job, better. I know I go to USPS when I ship anything. When it comes to packages, USPS vs UPS vs FedEx have their pros/cons, but the options mean that most end user's needs are met, whatever they are. The question is why USPS enjoys a state sanctioned monopoly on paper mail specifically.
    • runako 6y ago
      > The question is why USPS enjoys a state sanctioned monopoly on paper mail specifically. I'm curious -- can you link to more detail about this? I've never had trouble sending paper mail through UPS or FedEx. What does the monopoly cover, specifically?
      • bhupy 6y ago
        Sure: https://en.wikipedia.org/wiki/United_States_Postal_Service#Universal_service_obligation_and_monopoly_status https://en.wikipedia.org/wiki/United_States_Postal_Service#U... By law, private corporations aren't allowed to deliver anything to your mailbox, only the USPS can.
• llsf 6y ago
  It is not a novel idea to privatize the postal service. It can be lucrative business, especially if focused on the right areas. The legacy system is based on the fact that it is public service, equally offered to all citizens, regardless of their gender, race, religion and location. So, it is not a business. A business would focus on the most profitable aspect of the postal service. It would likely not serve some areas, or even discriminate against some people. I believe, the reason why USPS still has a monopoly in first class parcel mail, it is to satisfy people we claim that USPS should make money. Now, if it was clear for everyone that USPS should not be profitable (like military or education are not profitable), then it would make sense to break all USPS monopolies. Actually, I would argue the other way around, then let's USPS compete also with banks (account, loans, credit cards, stocks/bonds, CDs, etc.), title companies, check cashing business, etc. Which I believe USPS cannot currently. USPS could leverage its geographical coverage to bring banking services to remote areas. I would suggest to combine some services like DMV, so we could renew ID/driver/passports at postal office. We could pay taxes and fine. We could access notary services (titles), etc.
  • andrewlgood 6y ago
    The USPS has already lost a fair amount of business to email and overnight package services. It is interesting that the reason we cannot “opt out” of junk mail is because it would cause financial harm to the USPS. As for banking and check cashing businesses, why do we think it is appropriate for the government to actively compete in those businesses? What if they decide to set up a technology consulting business? A supermarket? Where do you draw the line? If you want universal postal service to rural areas (not profitable markets), then simply provide it and understand it has a cost like the military and education (as noted above)?
    • jayd16 6y ago
      I think the idea that there needs to be a philosophical line drawn is a fallacy. We could simply do things we want and not do things we don't want on a case by case basis.
      • 6y ago
• ip26 6y ago
  The common argument is if USPS did not have that monopoly, then other providers would enter only the profitable regions. The result would be the USPS would not have the revenue to serve the unprofitable regions, and would either be forced to end service in the unprofitable regions or simply collapse.
  • bhupy 6y ago
    Right, and that exposes the reality that the USPS is at best, a state run subsidization scheme for rural mail delivery. But if that's the case, why subsidize it indirectly through selectively inflated prices, which regressively hurt poor people in urban markets)? Sounds like if the problem is that rural mail is socially important, we ought to subsidize it directly.
    • ip26 6y ago
      The USPS is entirely self-funded and they're still trying to kill it. Good luck getting appropriations for it.
      • djur 6y ago
        Right. The problem with the USPS is that it's both been exposed to "market competition" and also has legal obligations that its competitors do not have. The cost of those legal obligations now far outstrips the value of their statutory monopolies.
        • Rebelgecko 6y ago
          Which legal obligations that it's competitors don't have? If you're talking about the requirement to pre-fund their pension fund, my understanding is that UPS and FedEx (and all private corporations) were already required to do so. I think it's more accurate to say that PAEA removed an artificial advantage that USPS had. OTOH, FedEx responded to MAP-21 and similar pension funding laws by getting rid of their pension fund which I suppose isn't something USPS can do as easily. On the third hand, UPS is still able to afford pensions for union employees.
• hardtke 6y ago
  The cost of sending a letter to any address in the US is the same. The cost of delivering that letter varies wildly. Think New York City vs. rural Alaska only reachable by plane. If USPS did not have monopoly, they would be severely undercut in profitable areas and would only service hard-to-reach areas where prices would spiral out of control. So if you want to keep the price of a stamp the same nationwide you need to grant a monopoly. It's the same reason regulated utilities own the power lines.
  • bhupy 6y ago
    > If USPS did not have monopoly, they would be severely undercut in profitable areas So in essence, residents of "profitable areas" are overpaying for mail to subsidize mail service to those in unprofitable rural areas. But then the next question is: why go through this roundabout subsidization? Why not just subsidize rural first class mail delivery by the state directly? This also ignores the fact that the USPS does not have a monopoly on sending packages, and is still able to serve package deliveries to rural areas, aren't they?
    • amznthrwaway 6y ago
      Fedex, UPS, and DHL handle these, in part, by contracting last mile delivery in those locations to the USPS.
    • ip26 6y ago
      Appropriations, tax revenue, and government budgets can be fickle revenue streams. There is a simple elegance to funding themselves, and you have full transparency into every dollar they receive from you.
  • john-shaffer 6y ago
    > So if you want to keep the price of a stamp the same nationwide you need to grant a monopoly. The conclusion does not follow. If it is important that the price of delivery to remote Alaska be cheap, then why not just subsidize it directly?
    • 6y ago
• refurb 6y ago
  Whoa there! You’re asking a lot for Americans to know how anything works outside the US. It’s similar in Canada - a number of previously run public services were privatized (DMV equivalent, liquor stores, etc). And the level of service improved dramatically. I remember how awful the DMV was - crappy customer service, limited locations, terrible hours. Now I can go and register my car at 8pm on a Wednesday with a 5 min walk and no line. Many of the Canada Post centers are privately run as well - the big box stores use their employees to run it. I was kind of shocked to come to the US and see how they’re still stuck where Canada was 30 years ago.
  • voxelghost 6y ago
    In Sweden we have quite the opposite experience. Privatization of the postal service has led to much worse service, closure of postal offices, long delivery times in less densely populated areas (read non profitable), and Loss of mail; to make profit, the companies hire the lowest grade, temp-workers they can get their hands on. Sometimes these people figure it is easier to burn or throw away mail rather than to do the actual work of delivering it.
    • cameldrv 6y ago
      Same in Germany. DHL usually just puts the tag on your mailbox and says you "weren't home" and then you have to go pick up the package at the post office. They use a lot of low wage contract labor and put them on strict quotas.
  • bhupy 6y ago
    To be fair, Canada Post is a Crown corporation, so it's still primarily state owned.
  • smnrchrds 6y ago
    > It’s similar in Canada - a number of previously run public services were privatized. And the level of service improved dramatically. I disagree. At best, it has been hit or miss. Alberta used to have Alberta Government Telephones (AGT). It was later privatized as Telus. Saskatchewan kept SaskTel a crown corp. The level of service and prices are so much better in Saskatchewan as a result that some Alberta residents pretend to live in Saskatchewan so they can get a Sask mobile plan. And don't get me started on 407.
• WarOnPrivacy 6y ago
  Consider any tangible thing that's wrong with America - shareholders whims are likely to be a part of that equation. This is a state of affairs we need to consider rolling back, not expanding.
  • bhupy 6y ago
    That’s comically simplistic. If you actually drill down into every tangible thing that’s wrong with America, you’ll find that root causes are actually pretty complicated.
    • WarOnPrivacy 6y ago
      I'll grant that a speedy misreading of what I wrote could lead someone to a conclusion that was simplistic or even comic. It's been my experience tho that folks on HN tend to carefully consider context and intent - and are less likely to arrive at misguided conclusions. That is a fine thing and I am grateful for it.
      • bhupy 6y ago
        It’s just as simplistic as the following statement: Consider any tangible thing that's wrong with America - government mismanagement and regulation are likely to be a part of that equation. This is a state of affairs we need to consider rolling back, not expanding.
• jonahbenton 6y ago
  The monopoly on first class mail point is well exercised; will also point out that turning the USPS into a public corporation with shareholders does not itself have any impact on governance. Facebook has shareholders, and Mark Zuckerberg does exactly as he pleases with zero accountability.
  • pseudalopex 6y ago
    Facebook has an unusual share structure that gives Zuckerberg a majority of votes.
    • jonahbenton 6y ago
      Yup. A "privatized" US Postal Service with shares sold on an exchange would offer buyers of those shares exactly as much control as Facebook shareholders have. Maybe even less!
• quickthrowman 6y ago
  Some data to consider while thinking about privatizing the post office, population densities: US - 87/sq mi Germany - 603/sq mi UK - 725/sq mi Japan - 862/sq mi Singapore - 20,446/sq mi
  • bhupy 6y ago
    Is there some population density threshold where corporate governance stops working? Does a pricing system and private enterprise break down in sparsely populated markets? Clearly things seemed to work when going from 20,000/sq mi to 862/sq mi (2 orders of magnitude). Is the argument that there’s a magical breaking point somewhere between 603 to 87/sq mi?
    • quickthrowman 6y ago
      Yes? When it comes to delivering first-class mail for cheap, I assume there’s a minimum population density that allows for such a thing to be done cheaply (similar to now) and profitably. The US has nearly an order of magnitude lower population density than Germany, I’d bet there’s a threshold somewhere in that range where it wouldn’t be possible to deliver a mail anywhere in the US by a private company for similar rates that everyone currently enjoys now. My whole argument is that the utility of keeping the USPS as it sits now with equitable pricing outweighs any potential efficiency or profit gained by private actors. If you disagree, that’s fine. I’ll disagree with your position that we should privatize the USPS, it will fuck over rural people to the benefit of ... who now? Are you heavily weighed down by purchasing .55 cent stamps? Because market rate first class mail would fuck over poor rural people pretty hard for almost no gain. The utility outweighs any efficiency or profit gains offered by private companies. Not every damn thing needs to be privatized, some things are better left as government entities because the benefit to the public is greater than any profit motive. Letter delivery is one of those things.
      • bhupy 6y ago
        > When it comes to delivering first-class mail for cheap, I assume there’s a minimum population density that allows for such a thing to be done cheaply (similar to now) and profitably. This is a bold assumption that needs backing, because it would suggest that Germans or Britons would be paying 2 orders of magnitude more on sending paper mail than Singaporeans. It also presupposes that private corporations must absolutely turn a profit on every piece of mail that they deliver to every destination, but that’s not how most enterprises work — there can be sustainable loss leaders. It also presupposes that we ought to subsidize rural paper mail delivery rather than charge the true price, which is also debatable. > I’d bet there’s a threshold somewhere in that range where it wouldn’t be possible to deliver a mail anywhere in the US by a private company for similar rates that everyone currently enjoys now. “I’d bet there’s a threshold”, how do you know that the US isn’t above that threshold? > equitable pricing This is also debatable, because the USPS is essentially charging higher rates in denser markets to offset the subsidized rates in sparser markets, which imposes a regressive price increase on poor urban USPS customers. Higher prices mean nothing to rich people. If there’s some social utility to having rural (and not urban) Americans enjoy subsidized first class mail, then why not just subsidize it directly through taxes as opposed to selective price increases, which can be regressive and un-equitable? > Not every damn thing needs to be privatized, some things are better left as government entities because the benefit to the public is greater than any profit motive. Letter delivery is one of those things. Is food one of those things? How about clothing and shelter? The profit motive is just an incentive for private entities to provide goods & services. The strongest argument in favor of the profit motive is that resource allocation is superior among private entities relative to government central planning. There are obviously exceptions, like externalities, but those don’t really apply here. And even if we did decide that there’s a public benefit to providing subsidized mail to rural areas, that’s an excellent argument in favor of keeping a taxpayer subsidized USPS, but not a sufficient one in favor of maintaining its monopoly on paper mail. Especially considering that private corporations already deliver packages to low density rural areas alongside USPS just fine.
• rstuart4133 6y ago
  A counter example. - Australia Post is a government owned entity. - Australia Post has a universal service obligation. - Australia Post is allowed to sell whatever it damned well pleases. - But, it has a monopoly on only one thing, letters. - The combination of universal service obligation is a liability of course, but being able to sell whatever it damned well pleases ameliorates it somewhat. Many firms (like banks) farmed out otherwise unprofitable branch functions to Post Offices. - Australia Post is, and as far as I know has always been profitable. From what I can tell, the idea that a government run entity is more poorly run than a private one is myth. If the area has open competition, and the government run business makes a profit (this is generally the case in Australia), then it really makes no difference if it's privately run or government owned. Differences only arise in non-competitive environments. A monopoly owned privately owned business charges like a rent seeking wounded bull. A subsidised government run business could destroy more efficiently run private equivalents, but can be a fine balance - it can also be a way to efficiently subsidise a service that was never going to be supplied privately. Doing it by subsidising private operators is equally fraught - regulatory capture is a thing, privately owned prisons being a poster child for what can go wrong.