To Make the Postal Service More Like a Private Shipping Company, Turn It Into One

Moneybox
A blog about business and economics.
June 29 2012 8:31 AM

To Make the Postal Service More Like a Private Shipping Company, Turn It Into One

Richard Layman thinks a lot of the post offices we have around D.C. are underutilized spaces and wonders how to bring more life to them:

So it got me thinking about how to reposition post offices to be business centers, even shared office type spaces, to make them more relevant in the 21st century as people use email more and more instead of the mail (but not for packages and documents that need to be signed).

But think about how UPS services were integrated into the company now called the UPS Store but was once called Mailboxes Etc. or how Kinkos (now FedExOffice) is "the branch office" for so many people needing access to printing and computing services.
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There's a lot that's hard about postal reform, but this is easy. If the goal is to make the U.S. Postal Service like UPS or Federal Express, what you need to do is make it a private parcel delivery company. That would mean repealing the Universal Service Obligation requiring it to deliver mail everywhere at a flat rate, repeal the monopoly on daily mail delivery, rescind the unusual accounting rules around postal pensions, and either sell the Postal Service to private investors or turn it into a worker-owned cooperative. Bam. Problem solved.

The problem is that this wouldn't  solve the problem that the USPS is actually supposed to solve, which is how do we guarantee cheap mail to people who live in low-density areas. The traditional answer to this has been to create a monopoly provider of daily mail service to urban areas and then require the monopoly provider to use its metropolitan profits to subsidize rural delivery. That monopoly-and-cross-subsidy model of public service delivery is an old-fashioned one, but it works as long as the monopoly is genuinely lucrative. The problem is that technological change has made urban daily mail less and less lucrative while the cost of guaranteeing cheap mail in rural communities remains high. If we decide that this isn't really a problem we care about, then everything else gets easy.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.