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Comment by troupo | Hacker News Reader

> Every instance I know of monopolies being broken up has been good for customers.

Sometimes breaking government monopolies may lead to worse outcomes. In Europe breaking transportation monopolies (especially rail transport) lead to decades-long worsening of services in some countries. Because instead of one company managing everything you now have one company owning moving stock, one company owning rails, one company offering repair services, one company... And all of them delegating and re-assigning blame.

But these situations are more of an exception

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Also everything related to privatisation. Often, short-term gains (cash for the current government) results in later higher prices for customers. Basically, a lot of stuff in UK.

Rail is fundamentally expensive, though. Compared to hiring a driver to drive a coach on a road, where you can get your coach and your driver so easily, keeping rail running is a nightmare of expense, and the skills are not common and the unions are strong, so labour problems are massive as well. If you think the state-run railways were good, you must have only ridden them in the 1950s, when there was still an empire to fund government stuff, and far fewer people in the country to consume it.

> Sometimes breaking government monopolies may lead to worse outcomes.

if the gov't monopoly was receiving tax payer subsidy, then breaking it up means the taxpayer gets back the cost of the subsidy, and the service being provided returned to private funding model.

If you only consider the outcome as the cost paid for service by the end user, then this looks bad - after all, cost was raised. But you have to also consider the savings in the subsidy that is no longer paid.

It's not black and white. Personally, i would prefer a model of "user pays", as it aligns incentives the most.

> the service being provided returned to private funding model.

They never do. They keep receiving substantial government subsidies.

> If you only consider the outcome as the cost paid for service by the end user, then this looks bad

No. I view it as "prices went up, service levels have gone down: delays, breakdowns, staff shortages have increased"

> Personally, i would prefer a model of "user pays", as it aligns incentives the most.

Then there would be no public transport, as its costs are prohibitive

> If you only consider the outcome as the cost paid for service by the end user, then this looks bad - after all, cost was raised. But you have to also consider the savings in the subsidy that is no longer paid.

You've got to consider other costs as well - higher road use means direct costs, direct deaths, and pollution. Some things simply aren't easy to isolate the effects of and bill an individual for; some things are natural monopolies, some things are economic lighthouses, and we shouldn't be afraid of administrating things via governments in the many cases where a true free market simply isn't a viable option.

> Personally, i would prefer a model of "user pays", as it aligns incentives the most.

We don't demand that highways generate direct profits/revenue outside of limited application of toll roads, would you also want every road to be pay-per-mile?

> Personally, i would prefer a model of "user pays", as it aligns incentives the most.

If you are willing to pay 100€ for a 1h train ride, that is.

Subsidies allow public transport for everyone.

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