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The problem is, the goal of a business is not efficiency—it is to make money. There are many ways to make money, and they don’t all come from effiency of servic
by beowulfey 4y ago
The problem is, the goal of a business is not efficiency—it is to make money. There are many ways to make money, and they don’t all come from effiency of service.
(Of course, the goal of government is not efficiency either)
- shirro 4y agoIn a regulated industry there can be a perverse incentive for operators to be less efficient. The practice is called Gold Plating. The regulator allows the operator profits in part based on their network investment so an operator has an incentive to over invest in maintenance and upgrades and inflate the costs. That is one of the ways they can make super profits in what is supposed to be a regulated market. Consumers pay for the overspending and the profits on top for no benefit which is worse than just paying for higher profit margins.