4 ms·

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

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?
- zebnyc 6y ago
  Can you clarify how this would work? If I reside in Florida/Hawaii and send mail to Alaska I am presuming that it would get re-routed through intermediate stops. Also people move and mail traffic ebbs and flows through the seasons. So I don't understand how this subsidies would work unless we look at the network as a whole and budget accordingly.

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?

zebnyc 6y ago
Can you clarify how this would work? If I reside in Florida/Hawaii and send mail to Alaska I am presuming that it would get re-routed through intermediate stops. Also people move and mail traffic ebbs and flows through the seasons. So I don't understand how this subsidies would work unless we look at the network as a whole and budget accordingly.