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USA should eat the loss, or let USPS run itself as a business (no deliveries for 55 cents to Alaska for one). Of course they can't since entire USA runs on it:

USA should eat the loss, or let USPS run itself as a business (no deliveries for 55 cents to Alaska for one). Of course they can't since entire USA runs on it: bills, tax notices, communications, e-commerce etc etc. So what it loses $10 Billion a year? Call it a loss leader.

JshWright 6y ago
Or let it provide banking services... It would add another revenue stream and provide a service that is currently very hard to access in many areas.
- lifeisstillgood 6y ago
  Banking services for rural Alaskans / people without internet access / anyone else in the 2% [x] lose about as much as postal services. [x] In the west big tech can more or less serve 98% of the population. but there is (approx) 2% of the population who for various reasons are massively uneconomic to serve - mentally, ill, disabled, poor, lacking literacy skills or the wrong language. Hell its probably more than 2%. But the point is Government must serve these people and provide a level playing field. Commercial companies dont have to.
  - JshWright 6y ago
    Those are already challenges the USPS has to deal with. They have infrastructure in place to address those challenges. If they're paying those costs anyway, they might as well add services that can take advantage of that investment in exchange for more revenue. There certainly would be an additional marginal cost, but it would be much, much less than an entity trying to start that from zero.
  - delfinom 6y ago
    I believe something like 10% of NYC is unbanked.
    - mullen 6y ago
      Of hand, I believe it is a lot higher than that. I listen to an NPR (Or was it NYTimes?) podcast that interviewed working poor people and the number thrown around was that something like 40% of Americans working poor are unbanked with some areas of the country upwards of 60% (I think they said certain zip codes in Queens) are unbanked. What really stings working poor people from using banks are the hidden fees. There needs to be cheap and no frills banking for the poor.
      - NovemberWhiskey 6y ago
        Banks are required to offer such accounts by law in NY: https://www.dfs.ny.gov/consumers/banking_money/basic_bank_accounts https://www.dfs.ny.gov/consumers/banking_money/basic_bank_ac... Do you mean even cheaper and less frills than that?
    - missedthecue 6y ago
      It's not for lack of banking locations.
- millzlane 6y ago
  They did something like this at one time. https://en.wikipedia.org/wiki/United_States_Postal_Savings_System https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...
- VLM 6y ago
  The USPS should provide local health care services. An interesting deployment strategy for socialized medicine. It would be everything everyone expects from both right and left wing perspectives. Edited to add: Wealthy privileged HN readers would not know this, but poor people who are "unbanked" have to use USPS money orders to pay bills, and the USPS charges a fraction of one percent on money orders. So yes, the USPS is already performing banking functions.
  - briandear 6y ago
    Just curious, but why are poor people unbanked? It seems like one could open a bank account with pretty much $5 at almost any bank in the country. Are they unable to do that because they wrote unpaid hot checks in the past, engaged in some kind of fraudulent activities? I honestly don’t know. Here is a study from Wharton that talks about it[1] but all I get from that is that “poor people are often financially ignorant and don’t avail themselves to banking services even though many of them could if they wanted to.” USPS doesn’t need to be a bank. We already have banks. The problem is that a large number of unbanked people don’t understand how to use or access a bank (apparently.) My point is that a USPS bank is a solution looking for a problem. [1] https://publicpolicy.wharton.upenn.edu/live/news/1895-financial-exclusion-why-it-is-more-expensive-to-be https://publicpolicy.wharton.upenn.edu/live/news/1895-financ...
    - mrguyorama 6y ago
      The implications in your comment are gross, but to respond to the underlying question: Using a bank as a poor person is stupid expensive. Have less than 200$ in an account? That's a monthly fee. Use your debit card less than 15 times last month? That's a fee. Need checks for that account with only $100 in it? Most people get them for free but you pay. For a time, TD Bank was even applying transactions to your account out of order so you would incur more than expected overdrafts and accrue more overdraft fees than you actually should have had. They lost a court case about that and had to pay people a few dollars, because class action suits are a travesty of justice often.
    - akuchling 6y ago
      For another discussion of why banks are terrible for poor people: "Why It's More Expensive to Be Poor", from PBS's personal-finance channel: https://www.youtube.com/watch?v=aLwRZibUqL0 https://www.youtube.com/watch?v=aLwRZibUqL0
- SilasX 6y ago
  So it would make a profit providing a service no one else finds profitable (offering services to these unbanked), and will also take a loss to serve this underserved marked? How can it act as both a public service and source of free money? Even if it made a small profit doing so, it would be less than ramping up their most profitable areas and would have an opportunity cost. (If you mean they should do it purely as a public service, that's a fair point, but you're writing like it's an easy way to improve their financial position, which doesn't make sense.)
  - JshWright 6y ago
    I don't think it's a given that just because no one else finds it profitable means that the USPS couldn't operate it in a profitable way. Most of the reasons that it isn't profitable relate to problems that the USPS already has to solve as part of their core function. It doesn't make sense for a bank to invest in physical infrastructure in the middle of nowhere, the cost of the building would erase any potential profit. The post office already has a building there though (and staff, etc). A significant amount of the up front expense, as well as a decent chunk of the ongoing expenses, is already going to be spent anyway.
    - SilasX 6y ago
      Yes, but that means you're saying the USPS has some kind of advantage locating where there are disproportionate unbanked and also a dearth of banks. But I keep hearing about the unbanked as being an issue of large urban areas, which don't have any shortage of bank locations. So for these five or six people in rural areas that can't get a bank account, and aren't complete deadbeats, and can't get to a bank as easily as they can get to a post office, the USPS has a cost advantage in serving them. Okay. I just don't see numbers that make this a big source of free money.
cameronbrown 6y ago
Loss leader is fine, but they still need to retain accountability.
- munk-a 6y ago
  You can't really evaluate a public service's accountability based on its balance sheet alone. It's a public service and is there to... provide a service. In the past USPS has been evaluated as "thing that should make money" which is silly - if it was profitable to run a reliable service in that space the commercial sector would have forced out the government.

JshWright 6y ago

Or let it provide banking services... It would add another revenue stream and provide a service that is currently very hard to access in many areas.

lifeisstillgood 6y ago
Banking services for rural Alaskans / people without internet access / anyone else in the 2% [x] lose about as much as postal services. [x] In the west big tech can more or less serve 98% of the population. but there is (approx) 2% of the population who for various reasons are massively uneconomic to serve - mentally, ill, disabled, poor, lacking literacy skills or the wrong language. Hell its probably more than 2%. But the point is Government must serve these people and provide a level playing field. Commercial companies dont have to.
- JshWright 6y ago
  Those are already challenges the USPS has to deal with. They have infrastructure in place to address those challenges. If they're paying those costs anyway, they might as well add services that can take advantage of that investment in exchange for more revenue. There certainly would be an additional marginal cost, but it would be much, much less than an entity trying to start that from zero.
- delfinom 6y ago
  I believe something like 10% of NYC is unbanked.
  - mullen 6y ago
    Of hand, I believe it is a lot higher than that. I listen to an NPR (Or was it NYTimes?) podcast that interviewed working poor people and the number thrown around was that something like 40% of Americans working poor are unbanked with some areas of the country upwards of 60% (I think they said certain zip codes in Queens) are unbanked. What really stings working poor people from using banks are the hidden fees. There needs to be cheap and no frills banking for the poor.
    - NovemberWhiskey 6y ago
      Banks are required to offer such accounts by law in NY: https://www.dfs.ny.gov/consumers/banking_money/basic_bank_accounts https://www.dfs.ny.gov/consumers/banking_money/basic_bank_ac... Do you mean even cheaper and less frills than that?
  - missedthecue 6y ago
    It's not for lack of banking locations.
millzlane 6y ago
They did something like this at one time. https://en.wikipedia.org/wiki/United_States_Postal_Savings_System https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...
VLM 6y ago
The USPS should provide local health care services. An interesting deployment strategy for socialized medicine. It would be everything everyone expects from both right and left wing perspectives. Edited to add: Wealthy privileged HN readers would not know this, but poor people who are "unbanked" have to use USPS money orders to pay bills, and the USPS charges a fraction of one percent on money orders. So yes, the USPS is already performing banking functions.
- briandear 6y ago
  Just curious, but why are poor people unbanked? It seems like one could open a bank account with pretty much $5 at almost any bank in the country. Are they unable to do that because they wrote unpaid hot checks in the past, engaged in some kind of fraudulent activities? I honestly don’t know. Here is a study from Wharton that talks about it[1] but all I get from that is that “poor people are often financially ignorant and don’t avail themselves to banking services even though many of them could if they wanted to.” USPS doesn’t need to be a bank. We already have banks. The problem is that a large number of unbanked people don’t understand how to use or access a bank (apparently.) My point is that a USPS bank is a solution looking for a problem. [1] https://publicpolicy.wharton.upenn.edu/live/news/1895-financial-exclusion-why-it-is-more-expensive-to-be https://publicpolicy.wharton.upenn.edu/live/news/1895-financ...
  - mrguyorama 6y ago
    The implications in your comment are gross, but to respond to the underlying question: Using a bank as a poor person is stupid expensive. Have less than 200$ in an account? That's a monthly fee. Use your debit card less than 15 times last month? That's a fee. Need checks for that account with only $100 in it? Most people get them for free but you pay. For a time, TD Bank was even applying transactions to your account out of order so you would incur more than expected overdrafts and accrue more overdraft fees than you actually should have had. They lost a court case about that and had to pay people a few dollars, because class action suits are a travesty of justice often.
  - akuchling 6y ago
    For another discussion of why banks are terrible for poor people: "Why It's More Expensive to Be Poor", from PBS's personal-finance channel: https://www.youtube.com/watch?v=aLwRZibUqL0 https://www.youtube.com/watch?v=aLwRZibUqL0
SilasX 6y ago
So it would make a profit providing a service no one else finds profitable (offering services to these unbanked), and will also take a loss to serve this underserved marked? How can it act as both a public service and source of free money? Even if it made a small profit doing so, it would be less than ramping up their most profitable areas and would have an opportunity cost. (If you mean they should do it purely as a public service, that's a fair point, but you're writing like it's an easy way to improve their financial position, which doesn't make sense.)
- JshWright 6y ago
  I don't think it's a given that just because no one else finds it profitable means that the USPS couldn't operate it in a profitable way. Most of the reasons that it isn't profitable relate to problems that the USPS already has to solve as part of their core function. It doesn't make sense for a bank to invest in physical infrastructure in the middle of nowhere, the cost of the building would erase any potential profit. The post office already has a building there though (and staff, etc). A significant amount of the up front expense, as well as a decent chunk of the ongoing expenses, is already going to be spent anyway.
  - SilasX 6y ago
    Yes, but that means you're saying the USPS has some kind of advantage locating where there are disproportionate unbanked and also a dearth of banks. But I keep hearing about the unbanked as being an issue of large urban areas, which don't have any shortage of bank locations. So for these five or six people in rural areas that can't get a bank account, and aren't complete deadbeats, and can't get to a bank as easily as they can get to a post office, the USPS has a cost advantage in serving them. Okay. I just don't see numbers that make this a big source of free money.

cameronbrown 6y ago

Loss leader is fine, but they still need to retain accountability.

munk-a 6y ago
You can't really evaluate a public service's accountability based on its balance sheet alone. It's a public service and is there to... provide a service. In the past USPS has been evaluated as "thing that should make money" which is silly - if it was profitable to run a reliable service in that space the commercial sector would have forced out the government.