In my area, we used to have dozens of trash companies and it caused all sorts of problems with traffic. So the country passed a law saying that residential trash bins had to be 40 gallons and within 2 years most neighborhoods were served by one or two trash companies. In fact companies started to standardize pickup days so that your trash is picked up Tuesdays and Fridays, no matter which company you use and recycling is on Thursdays.
OK so when you say commodity, you are talking about commodities as defined by the futures exchanges. I think people use the term commodity more colloquially than that. I think people (other than you) have been using the term commodity to mean substantially indifferentiable products or services.
First, it never occurred to me that you might be a chic.
Yup, you pointed to quite a few services that are undifferentiated. It requires a tremendous amount of marketing to make us think ATT has more coverage, or is it Verizon. I know it’s the one with the blue map, or was that the Democrats. Which one has the iPhone? I know Republicans have the droids, or was it the clones.
Also, add gas stations to that list. I like the one that has the extra clean gas that cleans my car while I drive, and offers giant sodas. Unless that’s the one that spilled a bunch of oil, in which case I like the one that didn’t spill oil, assuming that one has any sized soft drink or sweet tea for a dollar.
Oddly enough, I was in 6 gas stations today, and couldn’t tell you which company I used. I know one of them was across the street from a Freedom station because I turned to my wife and yelled, “freeeeeeeeeedoooooooom.” She then pointed out how there were 3 gas stations on this single intersection, but only 2 on the 106 miles we biked before getting there.
It’s almost as if the free market has a hard time dealing with products that are undifferentiated. Resulting in a lot of overlap and redundancy.
But if we’ve learned one thing in this thread: redundancy within a company is inefficient, redundancy between companies is competition, and that competition eliminates inefficiencies.
If you looked at the routes of any of the 5 smaller companies, S1_n, what would it resemble:
S1 is the complete collection of all the small companies, S1 = sum(S1_n, n=1-5)
S2 was the route created by a single company over the entire area
For some reason I’m picturing fractals, perhaps because Colbert did a thing with the Mobius Melt sandwich, and the MandleBLT Set.
I think each smaller set looks like S2. And that if any of the smaller companies were to farm it out to 5 sub-contractors, S1_n would look like S1, a collection of smaller routes.
No, not at all. I have mentioned several ways to model it, and I can think of lots more. We don’t have enough data or even a sense of what we want to come out of the model yet, so why pin down the method right now?
Why are you continuing to use verbiage instead of building a quantitative model?
That’s my question.
Because it is BS and already demonstrated as wrong by the counter arguments that preceded it. The “new” argument does not address any of the issues raised prior, so why bother changing topics?
It has been said many times in many ways on this thread it is unlikely that the cost structures are the same for each of the 5 companies, nor would any of those models necessarily apply to the cost structure of a single provider service.
Not that minimizing the overall internal cost of the system is really what he cares about is it? I dunno, I keep asking, but he never quite says. If that is is, then why does he care? Seems like a meaningless statistic to me, for the purposes he wuld be using it for anyway. Because, as I noted earlier, if you don’t tie it to the retail costs, then so what?
And unless you are an investor in all of the companies as a group (some sort of trash collection index) then who else would care what the overall system costs are relative to other ways of doing it?
Cute! You deem lecture me about the points I have been making for 4 pages now.
I brought up other models too.
What Sam Stone and I said was that in any case like this, you have to start by defining the parameters of the problem, and decide what you want to know about the system before you choose a model. so far, precious little of this has taken place.
Really? You don’t think truck size matters? Then why not devise a truck that is big enough to park on the whole street that can pick up 10 cans at once? Or why not simply use an old fashioned mini pickup?
You are a silly boy. Put your dick back in your pants.
So your argument is simply that because you could drive one truck on the route (sure, such a rute exists), there is NO possible way under ANY circumstances to improve on the “efficiency” of that by using more than one truck?
Can you improve on your mythical measure of efficiency in ways that don’t involve adding another truck? If so how? If not, why not?
It doesn’t mean man hours or fuel inefficiency because fewer trucks and men are used per company. You always have overlap within the different zones in any competitive market or otherwise there would be no competition.
In the purest sense, competition is inefficient use of resources but it is the most efficient form of cost control.
Neither Sam Stone or I said anything other than that - we don’t have enough information on the particulars of this case, but that it is certainly possible that 5 trucks are more efficient.
When you say “more likely” what do you mean? That if you measure all one truck solutions, for all values of all parameters, against all n-truck solutions for all values of all parameters (and the parameters are not likely to be the same), you come out better one way or another x% of the time.
It is Sunday, so I plead that as an excuse, but what is the exact point you are making? My intuition tells me there are infinite independent cases in each, so how will you compare?
The schedule is, but the traveling isn’t. My understanding is each team has a “traveling secretary” - fairly high level position - to deal with travel
BTW, creating a centralized baseball schedule is no trivial modeling matter either…somewhat better now that teams don’t share stadiums with other uses such as football as much as they used to, but still…actually, relatively easy to model compared to this topic, so worth doing for fun sometime.
thanks for the insight. Its getting off topic form here, but I will just say I was thinking of the initial auctions in the US compared to various European auctions. I was thinking more of the failures of the auctions themselves due to poor acution design than any resulting issues to consumers. IOW, was the auction itself effective for the purpose intended?
Getting off topic enough maybe for its own thread, but I’d ask why the smaller ones are in the market at all then? How do they justify that to their investors? That they will be acquired and earn ROI that way?
I live in a rural enough area that towers are not overlapping in many cases. I live on the very edge of Sprint service for instance, and have had a tower engineer out to my place, and he took me to the local tower.
The local tower came to Sprint via an acquisition before I lived here. they are no interested in repositioning the antennas now that the town has grown, or adding new towers.
But they are happy to let me roam on the other towers. So without the overlapping towers (which still barely cover me) I would have no service at all.
Of course. No one is saying more is always better. It depends on the parameters of each situation.
But someone IS saying fewer is always better, regardless of the parameters. EMacK seems to not even accept that there are parameters to his problem, as he keeps presenting a proof that does not contain any parameters. Weird!
Sounds similar to where the OP is now I guess. Note that you are pointing out some of the parameters we have addressed - do all the trucks come on the same day? Are the bins standardized or not?
Yes, that is true. But we are trying to achieve precision, and it is wrong to say the products at he OP’s house are not differentiated. He might not care about the differences, but they are there. Others might care.
That’s not an uncommon situation in general - maybe we need a better word than “commodity” for it. But my understanding, based on the menu of different services offered by the OP, is that there is differentiations, just that his needs falls squarely in the overlap of the services, and not in the differences, so he doesn’t care much.
Any model comparison would have to address from 1->n companies, each of which has from 1->t trucks, among many other things of course. Companies are of course free to choose the number of trucks they deem best.
I thought of something late last night I want to ask you.
You say you see 5 trucks on your street. Does that happen every week? I also wonder what happens as the trucks move further away from your street - do they all follow the same path around town like a train?
If only the government would make that competition go away and decide where a single gas station company should be.
You are missing the bigger point - all of the industries you mention are delivering standardized products. Woud you, for instance prefer that gasoline or telephone service NOT be standardized, so that products were not interoperable?
Maybe you would prefer a car that only used Freedom gas, and phone that can only call other Verizon phones. Would that be sufficiently differentiated in your mind? Why do you think that doesn’t happen?
Size breeds its own inefficiencies. When IBM wanted to make a home PC to get into competition they went outside the company for the whole thing. They knew that with all the layers of management and people involved in all the projects, that it would take too long and cost too much in house. That is when the door opened for Gates.
Yet in America we have buyout after buyout, merger after merger and pretend efficiency is one of the reasons for allowing them. It stifles competition and development of better products, and allows them to set prices. There is no good from allowing oligarchy. We are less competitive, less creative and charge more.
So you said, “competition is inefficient use of resources.” Why are we okay to have resources wasted to competition, but not in a government run program? Waste is waste.
In any city that has city trash removal, residents (tax payers) have an expectation that not only is trash removed (the minimum acceptable standard) but that their money isn’t wasted.
I’m not trying to create a strawman, I really believe people would lose their shit if W5 (is that still on the air?) ran an expose showing government run dump trucks driving in circles. Heads would roll. And I seriously doubt anyone would say, “well, at least they employed lots of people, and bought lots of gas.”
I consider WM to be an extremely well managed company, and made a shit ton of money off them when it popped back in February. I plan to add them back to my portfolio within the next few weeks (3.8% dividend, low P/E ratio, and it just broke above its 30 moving average). I have every confidence that both their residential collection and recycling collection is as efficient as it can be. But if I ever heard that they had a system that looked like the amalgamation of all 5 companies (S1), I’d short them as fast as I could.
Likewise, if a government run system had the level of redundancies found in S1, I’d be pissed.
So why is that level of redundancy tolerated in the free market? It will still cost money, and that has to come from somewhere.
I want to eliminate the redundancy, but somehow maintain enough competition to control pricing. I also want a pony.
Replacing the 5 companies with 1 will eliminate the redundancies, and should cost less to operate that the total of 5 companies. But without competition, there is no reason for them to pass the cost off to the consumer. Putting in price controls encourages shortcuts leading to disaster. I like the thought of having yearly bids for the city contract. Competition for the contract will drive the price down. But I’m not sure what would happen to the other 4 companies in the mean time.
I was also thinking more about this churn effect. Right now, the only thing stopping me from switching companies is information: I don’t know what all the others are charging right now. If someone was to collect that information and display it on a large digital sign, I’d be switching back and forth weekly. We could have a little mercantile market for trash removal.
As I said before, the free market has a really hard time dealing with undifferentiable products and services. Imagine a commodities market for cellphone time.
Garbage just happens to be one of those weird ones that we all need, and in most places the government takes care of. Ditto for electricity, water, sewage, natural gas, roads, and snow removal.
None of those examples make sense using the 5 company system. Like I said, we’d have 5 lines running to each neighbourhood. 5 gas lines, waterlines, sewage lines.
I was stuck behind a city bus this afternoon waiting to turn right, and it gave me a LOT of time to consider: what if there were 5 independent bus companies offering public transport. They’d all be running on the same major routes, making the same stops, and I’d get to wait behind 5 of them. It’s actually a fun thought experiment. I imagine companies would team up with major destinations like malls, so one company would have exclusive rights to stop there, everyone else would have to stop down the street and take an overpriced shuttle bus. They’d all go for the most profitable routes and times, so service would drop off in less used areas. Good times.
I’m not really sure how to frame your argument or a response to it. When I think of government waste I think of my tax money not being efficiently spent which is a function of return on investment. When I buy groceries I don’t think of the redundancy of having 5 grocery stores in the community I go to. In fact I actually drive past a store that is considered to be within walking distance of my house.
