Yellow taxis have become an icon of New York City, but their concentration around central Manhattan and the airports is undeniable. Many have complained that it's nearly impossible to catch a cab elsewhere in the city, and it's not difficult to note the paucity of the yellow cabs in the so-called outer boroughs. Currently, only yellow cabs are authorized to pick up passengers on the street who hail for service. To address this issue, a bill has been sitting at Governor Andrew Cuomo's desk that would authorize livery (black) cabs to pick up street hails in the outer boroughs. Currently, livery cabs pick up passengers on pre-arranged trips.
Aside from the access issue, proponents argue that this would generate millions for the city. Currently, drivers of the traditional yellow cabs spend hundreds of thousands of dollars to buy medallions, their exclusive right to pick up street hails within the city. By extending these medallion permits to livery cabs, "the tax revenues ... would be something like a billion dollars into the city’s budget," Mayor Bloomberg remarks.
Opposition comes from current yellow cab drivers, who argue that by leasing the right to pick up street hails to livery cabs, the value of their own medallions will be vastly diminished. On Tuesday, hundreds of cab drivers protested outside Governor Cuomo's office, urging him to veto the bill that would allow the livery cabs' operations. Furthermore, oppositions argue that "livery drivers in the outer boroughs would ignore prearranged pickups in favor of street hails."
Governor Cuomo has remarked that “the optimum goal is to design a plan that provides taxi access to the outer boroughs, access to the disabled, revenue for the city, and respects the medallion franchise.” The root cause of the problem is the current lack of cabs in outer boroughs. This disproportion is vividly illustrated by the fact that while 80% of the city's population lives outside Manhattan, 97% of the pickups are in central Manhattan or at the city's two airports, according to GPS data collected by taxi commission.
Most yellow cabs drivers stay within the airports and central Manhattan, where the demand for the cabs is the greatest. The situation is a microcosm of game theory practice. Each driver's dominant strategy is to stay in these hot-spots, for they're more likely to earn more revenue. However, if most drivers practice this method, all of them may be worse off, given that government intervention may deal with the lack of cabs in outer boroughs, through measures like authorizing the livery cabs, which would indirectly devalue all cab drivers' medallions. To settle this uneasy dilemma, an equilibrium needs to be sought that balances the desire of cab drivers to serve hot spots for more revenue, and the access for outer boroughs for citizens there. Within outer boroughs, secondary hot spots can be identified, including trains stations, shopping malls, sports venues, and other popular places. Monetarily incentives could be given to yellow cab drivers to pick up passengers from these "secondary hot spots" in the outer boroughs to compensate for their service in these less-profitable regions. This internal solution, if operational, may eradicate the need for external livery cabs and their rights to pick up street hails in the outer boroughs.
Sources:
Wednesday, October 5, 2011
Tuesday, October 4, 2011
Kindle Fire Pricing
When Amazon unveiled the $199 tablet computer Kindle Fire, people began speculating that a rival product to Apple's iPad, whose cheapest version is $499, has finally arrived. Indeed, at $300 or 60% cheaper, Kindle Fire, which may lack some of iPad's functionaries, seem to be somewhat of a bargain. News came out today that Amazon might actually be losing money for each unit of Kindle Fire sold. Although estimates vary, the estimated cost put into each unit of Kindle Fire is about $210. Amazon would need to sell $10 of other goods, such as music or apps, just to break even.
Predatory pricing may be the strategy Amazon is going after. By intentionally charging a lower price, the firm hopes to entice customers. When the item is sold, also carried along is the brand name of the product and other related product. Amazon already has a huge presence in the market, and has a huge inventory of items ready to be sold, that may be compliment products to the tablet. By tying the goods together, Amazon may be hoping that the lower pricing on Kindle Fire may draw customers to buy more of its other goods. Indeed, compared to other Android competitors, "the real benefit for Amazon in entering the tablet space is the advantage of a direct, established, sales model on Amazon.com."
Sources:
Predatory pricing may be the strategy Amazon is going after. By intentionally charging a lower price, the firm hopes to entice customers. When the item is sold, also carried along is the brand name of the product and other related product. Amazon already has a huge presence in the market, and has a huge inventory of items ready to be sold, that may be compliment products to the tablet. By tying the goods together, Amazon may be hoping that the lower pricing on Kindle Fire may draw customers to buy more of its other goods. Indeed, compared to other Android competitors, "the real benefit for Amazon in entering the tablet space is the advantage of a direct, established, sales model on Amazon.com."
Sources:
Saturday, October 1, 2011
Columbia ↔ Coney Island Biking Adventure
Situated about 20 miles away from campus of Columbia, Coney Island certainly is a good destination for a half-day biking trip, to get to see the suburban portions of the city and head to the beach. The route for the return portion of the trip was slightly altered to see more different aspects.
Columbia → Coney Island
Columbia → Coney Island
- Hudson River Greenway: from Riverside Drive, enter from W 103th Street and head down to the lowest level, where the biking route sits next to the river
- Warren Street: eastbound crosstown road at the tip of Manhattan
- Brooklyn Bridge: the only borough crossing of the trip
- Prospect Park: follow various biking routes after bridge crossing to enter the park
- Ocean Parkway: cross through the lettered avenues of Brooklyn until the destination; this section has a highly suburban feel
- Shore Parkway Greenway: somewhat difficult to find the entrance, but this route sits next to the Lower New York Bay, with good views of Staten Island and Verrazano Bridge; also spotted along this section is something of a rare sight in Manhattan: parking lots next to stores
- 4th Avenue: the Greenway terminates at around 69th Street, so the northbound return journey continues
- Manhattan Bridge: upon reaching Downtown Brooklyn, follow through various signs to find the entrance to the bridge
- Prince Street: westbound crosstown road; highly congested route
- Hudson Greenway: head back up to Morningside Heights
Friday, September 30, 2011
Who is Dan Johnson?
"He’s not even the 25th man on the Tampa roster. He’s more like the 32nd or 33rd or 34th man." Coming up to bat at the bottom of 9th inning, with his Tampa Bay Rays down 7-6 on the season's finale, with Red Sox ahead at the time and the season on the line, Johnson was hitting an abysmal .108 in 83 at-bats, including zero hits in all of September. Johnson quickly got down in the counts with one ball and two strikes. But the next changeup from Yankees' Cory Wade traveled down the right-field line and over the wall. Suddenly, Rays have come back from a 7-0 deficit in the last two innings. They'd eventually win in extra inning with another homer. But it was the homer in the bottom of the 9th that tied the game and forced the extras, that first goes into the history book.
Meanwhile over at Baltimore, Boston Red Sox, looking to save its season from a historic collapse, held lead into the 9th inning. Closer Jonathan Papelbon, a 4-time All-Star, could not hold onto the one-run lead. The game's final play unfolded as Outfielder Carl Crawford, who had signed 7-year, $142-million contract with the Red Sox before the season, could not make the diving catch; the Orioles scored the winning run. They weren't able to close the game and save the season. But the little-known Dan Johnson was able to lift the Ray into the playoffs.
Indeed, this is one of the signature of sports. One just doesn't know who will be the hero at the end of the night.
Source:
Meanwhile over at Baltimore, Boston Red Sox, looking to save its season from a historic collapse, held lead into the 9th inning. Closer Jonathan Papelbon, a 4-time All-Star, could not hold onto the one-run lead. The game's final play unfolded as Outfielder Carl Crawford, who had signed 7-year, $142-million contract with the Red Sox before the season, could not make the diving catch; the Orioles scored the winning run. They weren't able to close the game and save the season. But the little-known Dan Johnson was able to lift the Ray into the playoffs.
Indeed, this is one of the signature of sports. One just doesn't know who will be the hero at the end of the night.
Source:
Thursday, September 29, 2011
Historical September Collapses
As weather begins to chill and October rolls, America's pastime heads into the playoffs. But what baseball witnessed this September was anything short of unbelievable. On the final day of regular season, Boston Red Sox and Atlanta Braves lost the wildcard spot after holding strong leads only earlier this season. And the fashion in which it all unwrapped today was also short of unbelievable.
On September 3rd, Red Sox held 9-game lead over Tampa Bay Rays for the wildcard. But that lead evaporated and as the day began yesterday, the teams were tied for the wildcard. Through most of the night, it looked as if Boston would wrap up the position and put a damper on their dangerous slide. They were up 3-2 as rain delay settled in the 7th inning. Meanwhile, Rays were down 7-0 against the Yankees. The Rays were down to their last strike; the Red Sox was one strike away from winning. But Rays rallied to win 8-7 against the first-place Yankees, and Red Sox managed to lose 4-3 to the last-place Orioles.
On the National League side, Atlanta Braves had 10½ games lead over St. Louis Cardinals on August 25th. Even before game on September 6th, the lad was 8½ games. But similar to slide in American League, Braves managed to lose its lead and came into the last day of the season tied with the Cardinals for the wildcard. Cardinals won its game first, 8-0 against the Astros. It was down to the Braves to save its season and force an extra game against the Cardinals to determine who wins the last playoff spot. Heading into 9th inning, Braved held onto 3-2 lead, but blew it, and finally let the Phillies score in the 13th inning to cap the ultimate collapse.
Collapses are not uncommon. But to see historical levels of collapse in both leagues, on the last day of the season, both in remarkable fashions on the last game of the season, is quite unprecedented. While collapse is one side of the equation, the final results still wouldn't be possible without the remarkable runs of the other teams. Both Tampa Bay and St. Louis played above .600 baseball to catch up the wildcard leaders. October is known for where legacies are born in the playoffs. But just as noteworthy are the remarkable stories in September that allow some of the teams to head into October baseball. From now, anything is possible. Colorado Rockies rolled their way into the final playoff spot in 2007 and went on their juggernaut into the World Series. How will the Rays and Cardinals turn out this season, after just having capped their unbelievable run into the playoff? October will tell.
Sources:
On September 3rd, Red Sox held 9-game lead over Tampa Bay Rays for the wildcard. But that lead evaporated and as the day began yesterday, the teams were tied for the wildcard. Through most of the night, it looked as if Boston would wrap up the position and put a damper on their dangerous slide. They were up 3-2 as rain delay settled in the 7th inning. Meanwhile, Rays were down 7-0 against the Yankees. The Rays were down to their last strike; the Red Sox was one strike away from winning. But Rays rallied to win 8-7 against the first-place Yankees, and Red Sox managed to lose 4-3 to the last-place Orioles.
On the National League side, Atlanta Braves had 10½ games lead over St. Louis Cardinals on August 25th. Even before game on September 6th, the lad was 8½ games. But similar to slide in American League, Braves managed to lose its lead and came into the last day of the season tied with the Cardinals for the wildcard. Cardinals won its game first, 8-0 against the Astros. It was down to the Braves to save its season and force an extra game against the Cardinals to determine who wins the last playoff spot. Heading into 9th inning, Braved held onto 3-2 lead, but blew it, and finally let the Phillies score in the 13th inning to cap the ultimate collapse.
Collapses are not uncommon. But to see historical levels of collapse in both leagues, on the last day of the season, both in remarkable fashions on the last game of the season, is quite unprecedented. While collapse is one side of the equation, the final results still wouldn't be possible without the remarkable runs of the other teams. Both Tampa Bay and St. Louis played above .600 baseball to catch up the wildcard leaders. October is known for where legacies are born in the playoffs. But just as noteworthy are the remarkable stories in September that allow some of the teams to head into October baseball. From now, anything is possible. Colorado Rockies rolled their way into the final playoff spot in 2007 and went on their juggernaut into the World Series. How will the Rays and Cardinals turn out this season, after just having capped their unbelievable run into the playoff? October will tell.
Sources:
Monday, September 26, 2011
Hypothetical NYC Subway Line: Cross 125th ↔ Flushing
New York is finally getting progress on its long-sought Second Avenue Subway line. Hoping to relieve congestion on the East Side, the line is scheduled to begin operating in late 2016. It's hard to imagine any capital projects of its magnitude being implemented anytime soon. But that put offside, if there is one hypothetical line to the Subway system that could be built, it would make the most sense to construct a Cross 125th Street line through Manhattan, extending via Triboro (RFK) Bridge into LaGuardia Airport and Main Street in Flushing.
The hypothetical line would have the following stations, listed from its western terminus. Under this plan, only 1 new station (LaGuardia Airport) would need to be constructed.
The line would also relieve commuters from two major Metro North stations within the city boundaries: Grand Central and Marble Hill. Grand Central would continue to serve commuters heading to Midtown or Downtown, but the 125th-Harlem station would be able to efficiently serve commuters heading especially to the West Side of the city. Many West Side workers currently get off at Marble Hill, transfer onto the 1 line at 225th Street, and make the long journey on the local 1 line. Instead, this line would allow them to stay in Metro North until 125th and quickly transfer to lines on the West Side, greatly helping those heading into Harlem, areas like Morningside Heights or Upper West Side.
The continuation of the line into Queens serves to enhance the current services of M60, which takes variable amount of time to move from Morningside Heights to LaGuardia, one of the largest airports in the nation without rail connection on the ground. The extension into Flushing provides another outlet into Manhattan, especially Upper Manhattan, from the Main Street station, which currently is the busiest station in the system outside of Manhattan. The extension to LaGuardia has been proposed recently, but rejected when residents of Astoria expressed their disapproval. Also on practicality note, it would be a massive capital project just to construct rail lines on the Triboro (RFK) Bridge.
While this line is purely hypothetical, it does offer insight into where the current system could be most improved. Currently it is most difficult to travel crosstown, especially in Uptown areas.125th Street, with its Metro North station on Park Avenue, would have the best argument to house a new line, if it were possible. The extension of that line would also help move people easily to and from two of busiest locations in Queens.
Sources:
The hypothetical line would have the following stations, listed from its western terminus. Under this plan, only 1 new station (LaGuardia Airport) would need to be constructed.
- 125th & Broadway: currently 1 train, nearby Columbia University (including the future Manhattanville) campuses
- 125th & St. Nicholas Ave: currently A, B, C, D trains
- 125th & Lenox Ave: currently 2, 3 trains
- 125th & Lexington Ave: currently 4, 5, 6 trains, nearby Metro North connection
- Astoria Blvd: currently N, Q trains
- LaGuardia Airport
- Main Street, Flushing: currently 7 train, nearby LIRR connection
The line would also relieve commuters from two major Metro North stations within the city boundaries: Grand Central and Marble Hill. Grand Central would continue to serve commuters heading to Midtown or Downtown, but the 125th-Harlem station would be able to efficiently serve commuters heading especially to the West Side of the city. Many West Side workers currently get off at Marble Hill, transfer onto the 1 line at 225th Street, and make the long journey on the local 1 line. Instead, this line would allow them to stay in Metro North until 125th and quickly transfer to lines on the West Side, greatly helping those heading into Harlem, areas like Morningside Heights or Upper West Side.
The continuation of the line into Queens serves to enhance the current services of M60, which takes variable amount of time to move from Morningside Heights to LaGuardia, one of the largest airports in the nation without rail connection on the ground. The extension into Flushing provides another outlet into Manhattan, especially Upper Manhattan, from the Main Street station, which currently is the busiest station in the system outside of Manhattan. The extension to LaGuardia has been proposed recently, but rejected when residents of Astoria expressed their disapproval. Also on practicality note, it would be a massive capital project just to construct rail lines on the Triboro (RFK) Bridge.
While this line is purely hypothetical, it does offer insight into where the current system could be most improved. Currently it is most difficult to travel crosstown, especially in Uptown areas.125th Street, with its Metro North station on Park Avenue, would have the best argument to house a new line, if it were possible. The extension of that line would also help move people easily to and from two of busiest locations in Queens.
Sources:
Sunday, September 25, 2011
Congestion Charge Plan in Beijing
Earlier this month, officials in the Chinese capital said that congestion fees will be introduced on some roads to combat the notorious traffic woes in the city. The idea isn't novel; some European cities already have the practice, and New York City has also considered the plan. Beijing currently has 4.8 million registered vehicles. Measures have taken to curb that growth. Since 2008, certain vehicles have been barred from the streets depending on its license plate and the day of the week. Furthermore starting January, cap has been placed on new car registrations at 20,000 per month.
The goal of the congestion fee is to encourage public transportation usage. A senior municipal official is quoted to say that "by 2015, our goal is to have public transportation handling 50 percent share of traffic volume inside the Fifth Ring Road." However, strong measures have been taken in the past to encourage public transportation usage. The Beijing Subway has enormously expanded within the last decade to climb to worldly ranks of 4th in track length and 5th in ridership. Furthermore in 2007, the fares were reduced to a flat-rate of 2 RMB with unlimited transfers. The municipal government took on the deficit to encourage public transportation usage. While ridership has increased, so has the ownership of cars with the rise of middle-class who can afford personal vehicles.
Transportation service is an inelastic demand. An environmental activist in Beijing is quoted to say that "imposing the toll itself won't change that people have to travel long distances from their homes to work." The convenience offered by cars still exceeds that from mass transit. To truly encourage public transportation usage, mass transit simply needs to be more convenient, by exploiting the pitfall of vehicle usage, congestion. If mass transit can be much faster and more reliable, it could potentially be more convenient. A key to make faster trains is to build express lines. Currently, neither the Shanghai and Beijing Metro has express lines running parallel to local lines, as they do in some parts of New York City's Subway. Instead of focusing on express, both of the Chinese cities are currently expanding lines to new areas. While that encourages more mass transit usage from outer, suburban areas, it still leaves traveling within the city center somewhat inconvenient. By investing in express lines that could take a person from Point A to Point B faster than a car could in the normally congested streets, citizens may truly see public transportation as more convenient.
For the growing middle class, money may not be the ultimate incentive. Despite higher parking prices and other costs associated with driving, they still buy vehicles in bulks and become angered when they can't get the vehicle registration under the current quota. Lowering the costs of public transportation fares may be a miniscule amount to them. Instead, making them more convenient may be the best way to tap into their incentives and get into the heart of the congestion problem in Beijing, and other crowded metropolises.
Sources:
The goal of the congestion fee is to encourage public transportation usage. A senior municipal official is quoted to say that "by 2015, our goal is to have public transportation handling 50 percent share of traffic volume inside the Fifth Ring Road." However, strong measures have been taken in the past to encourage public transportation usage. The Beijing Subway has enormously expanded within the last decade to climb to worldly ranks of 4th in track length and 5th in ridership. Furthermore in 2007, the fares were reduced to a flat-rate of 2 RMB with unlimited transfers. The municipal government took on the deficit to encourage public transportation usage. While ridership has increased, so has the ownership of cars with the rise of middle-class who can afford personal vehicles.
Transportation service is an inelastic demand. An environmental activist in Beijing is quoted to say that "imposing the toll itself won't change that people have to travel long distances from their homes to work." The convenience offered by cars still exceeds that from mass transit. To truly encourage public transportation usage, mass transit simply needs to be more convenient, by exploiting the pitfall of vehicle usage, congestion. If mass transit can be much faster and more reliable, it could potentially be more convenient. A key to make faster trains is to build express lines. Currently, neither the Shanghai and Beijing Metro has express lines running parallel to local lines, as they do in some parts of New York City's Subway. Instead of focusing on express, both of the Chinese cities are currently expanding lines to new areas. While that encourages more mass transit usage from outer, suburban areas, it still leaves traveling within the city center somewhat inconvenient. By investing in express lines that could take a person from Point A to Point B faster than a car could in the normally congested streets, citizens may truly see public transportation as more convenient.
For the growing middle class, money may not be the ultimate incentive. Despite higher parking prices and other costs associated with driving, they still buy vehicles in bulks and become angered when they can't get the vehicle registration under the current quota. Lowering the costs of public transportation fares may be a miniscule amount to them. Instead, making them more convenient may be the best way to tap into their incentives and get into the heart of the congestion problem in Beijing, and other crowded metropolises.
Sources:
Thursday, September 1, 2011
Maglev Ride
There was absolutely no need for me to ride the Shanghai Maglev yesterday as I headed to Pudong International Airport. There was enough time to simply take Line 2 all the way. But more as adventure, I got off the Metro at Longyang Road Station and paid 40 RMB for an one-way Maglev ticket. The 30 km journey was completed in less than 8 minutes.
Magnetic levitation operates differently from conventional rail technology in that it doesn't use wheels, bearings or axles. Instead, the magnetic field induced on either side of the vehicle helps to levitate and propel the train. As a result, there is no rolling friction, minimal maintenance costs, and little weather-related disruptions.
While the technology may be state-of-the-art, Shanghai Maglev faces other challenges since its inauguration in 2004. The most common criticism it has received is its short length, specifically that the line terminates in Longyang Road, which is around 8 km and 5 Metro stops away from Lujiazui financial district, and even further from notable sites in the city center, such as People's Square. The need to transfer for further 20-30 min journey adds to the inconvenience. Furthermore, riding the Maglev is relatively expensive. Single-ride economy seat starts at 40 RMB with proof of airline ticket purchase, while a typical moderate-length Metro ride costs 4 or 5 RMB.
There has been long-term plans to extend the Maglev into the city center, and continuing westward to Hongqiao Airport. Shanghai is growing at tremendous pace. Its Metro only began operating in 1995, but the ridership has already surpassed that of New York City Subway to claim world's 4th spot. As constructions for future lines and extensions occur by the minute, one can only hope that Maglev will be made more accessible soon. That the technology is remarkable is undisputed; only the operations stand in Maglev's way for it to transform transportation within and beyond China's largest city.
Maximum speed in the early afternoon hours was 300 km/hr.
Magnetic levitation operates differently from conventional rail technology in that it doesn't use wheels, bearings or axles. Instead, the magnetic field induced on either side of the vehicle helps to levitate and propel the train. As a result, there is no rolling friction, minimal maintenance costs, and little weather-related disruptions.
While the technology may be state-of-the-art, Shanghai Maglev faces other challenges since its inauguration in 2004. The most common criticism it has received is its short length, specifically that the line terminates in Longyang Road, which is around 8 km and 5 Metro stops away from Lujiazui financial district, and even further from notable sites in the city center, such as People's Square. The need to transfer for further 20-30 min journey adds to the inconvenience. Furthermore, riding the Maglev is relatively expensive. Single-ride economy seat starts at 40 RMB with proof of airline ticket purchase, while a typical moderate-length Metro ride costs 4 or 5 RMB.
There has been long-term plans to extend the Maglev into the city center, and continuing westward to Hongqiao Airport. Shanghai is growing at tremendous pace. Its Metro only began operating in 1995, but the ridership has already surpassed that of New York City Subway to claim world's 4th spot. As constructions for future lines and extensions occur by the minute, one can only hope that Maglev will be made more accessible soon. That the technology is remarkable is undisputed; only the operations stand in Maglev's way for it to transform transportation within and beyond China's largest city.
Monday, August 8, 2011
Probability Limit
At a Science Café talk about mammals tonight, I heard this statement: "even if the chance of it happening is one in one-million in a given year, the likelihood is high given a span of one-million years." Is that really true? What about in the general case of "if the chance of an event happening is 1 in n, what's the likelihood that the event will occur at least once for n number of trials?"
The expression for that probability is 1 minus the chance that the event will not occur at all during the n number of trials. The chance of the event not occurring each time is (n-1)/n. Raise that to the n-th power for the number of iterations, and subtract from 1, which represents certainty, and the probability that the event happens at least once is:
We wish to find the limit as n approaches infinity. Working out the L'Hopital's rule by hand can be somewhat cumbersome with the exponential term, but with the help of Mathematica, we determine the limit to be:
The answer approximates to = 0.632120559. As n increases, the output probability decreases. However, n only needs to be greater than 485 for the output probability to match the first 3 decimal places after rounding. Of course for any given probability, as the number of trials increase indefinitely, the overall probability of the event occurring at least once approaches certainty. But in the special circumstance here, where the number of trials (n) match the inverse of the probability of each event (1/n), the overall probability approaches (e-1)/e.
The expression for that probability is 1 minus the chance that the event will not occur at all during the n number of trials. The chance of the event not occurring each time is (n-1)/n. Raise that to the n-th power for the number of iterations, and subtract from 1, which represents certainty, and the probability that the event happens at least once is:
Friday, August 5, 2011
Financial Woes of USPS
There is absolutely no doubt that postal offices around the world are struggling, and the United States is no exception. Today, the United States Postal Service (USPS) announced that it is facing $3.1 billion quarterly loss, after posing 2.6% decrease in volume from a year ago. Given these figures, it may not be able to make its $5.5 billion retirement payment in September, and default may be an inevitable possibility.
An independent agency of the United States government, USPS does not receive taxpayer funding. As deficits pile up, the USPS has tried implementing various ways to increase revenue and cut costs. How USPS handles its money has been attention of much criticism. The union enjoys no-layoff contracts, and USPS spends 80% of its budget on salaries and benefits, compared to its competitors' 61% for UPS and 43% for FedEx. Compared to other federal workers, postal employees also pay a smaller portion of their salary for health care. Yet, money management may not be the root cause of financial troubles USPS faces.
Demand is simply falling. Principles of economics indicate that fall in demand corresponds to decrease in quantity of service offered. As people continue to rely on electronic services for communication and transactions, the demand for postal services fall, as shown by the 20% decrease in volume handled from 2006 to 2010. Furthermore, outlook is dismal for USPS, because it mainly relies on first-class mail for its revenue. As business switch to electronic method to cut costs, USPS has to rely on changing consumer behaviors to keep its basis of revenue; there is a "marketing officer tasked with lobbying banks not to switch to electronic statements."
The public and the USPS have considered cutting costs by reducing service. However, the current reputation of USPS is dependent on its quick and cheap delivery for first-class mail. By cutting costs and services, USPS may significantly damage its value. This was inadvertently demonstrated by a recent strike by Canada Post. Demanding better compensation, Canada Post shut down service for 3 weeks. While some businesses were hurt, observers noted that "by going on strike, postal workers have likely sealed their own fate by proving it's possible to function without daily mail delivery."
The fundamental cause of financial problems for USPS is the reduction in demand. Demand for cassette players plummeted drastically over the recent years with development in electronic music players. However, USPS is not like typewriter. Businesses still rely heavily on first-class mailing to advertise, and mailing is the only way to send an original document intact. USPS is the only service that delivers first-class mails, and the colloquially termed junk mail; UPS and FedEx are more involved with package delivery. Mail volume may be down, but USPS still handled an enormous volume of 40 billion items during the third quarter. It's impractical to call for the disband of the first-class mail carrier. Rather, USPS needs to expand its evaluation of alternative methods, from moderately decreasing services to incorporating distance-based fares. Furthermore, regulations regarding the service, authority and regulation over delivery systems should also be closely analyzed. Until then, USPS and the nation may be stuck in this deadlock, as over half million employees and the rest of the nation watch the latest figures dismally.
Sources:
An independent agency of the United States government, USPS does not receive taxpayer funding. As deficits pile up, the USPS has tried implementing various ways to increase revenue and cut costs. How USPS handles its money has been attention of much criticism. The union enjoys no-layoff contracts, and USPS spends 80% of its budget on salaries and benefits, compared to its competitors' 61% for UPS and 43% for FedEx. Compared to other federal workers, postal employees also pay a smaller portion of their salary for health care. Yet, money management may not be the root cause of financial troubles USPS faces.
Demand is simply falling. Principles of economics indicate that fall in demand corresponds to decrease in quantity of service offered. As people continue to rely on electronic services for communication and transactions, the demand for postal services fall, as shown by the 20% decrease in volume handled from 2006 to 2010. Furthermore, outlook is dismal for USPS, because it mainly relies on first-class mail for its revenue. As business switch to electronic method to cut costs, USPS has to rely on changing consumer behaviors to keep its basis of revenue; there is a "marketing officer tasked with lobbying banks not to switch to electronic statements."
The public and the USPS have considered cutting costs by reducing service. However, the current reputation of USPS is dependent on its quick and cheap delivery for first-class mail. By cutting costs and services, USPS may significantly damage its value. This was inadvertently demonstrated by a recent strike by Canada Post. Demanding better compensation, Canada Post shut down service for 3 weeks. While some businesses were hurt, observers noted that "by going on strike, postal workers have likely sealed their own fate by proving it's possible to function without daily mail delivery."
The fundamental cause of financial problems for USPS is the reduction in demand. Demand for cassette players plummeted drastically over the recent years with development in electronic music players. However, USPS is not like typewriter. Businesses still rely heavily on first-class mailing to advertise, and mailing is the only way to send an original document intact. USPS is the only service that delivers first-class mails, and the colloquially termed junk mail; UPS and FedEx are more involved with package delivery. Mail volume may be down, but USPS still handled an enormous volume of 40 billion items during the third quarter. It's impractical to call for the disband of the first-class mail carrier. Rather, USPS needs to expand its evaluation of alternative methods, from moderately decreasing services to incorporating distance-based fares. Furthermore, regulations regarding the service, authority and regulation over delivery systems should also be closely analyzed. Until then, USPS and the nation may be stuck in this deadlock, as over half million employees and the rest of the nation watch the latest figures dismally.
Sources:
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