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How the USPS Killed Digital Mail

An anonymous reader writes "In 2013, a startup called Outbox drew a lot of attention for its ambitious goal: digitizing everybody's snail mail. It was a nice dream; no more walking down your driveway six days a week to clear out the useless junk it contained. But less than a year later, Outbox shut down. This article explains how the United States Postal Service swiftly crushed their plan to make mail better. The founders were summoned to a meeting with the Postmaster General, who told them. 'We have a misunderstanding. You disrupt my service and we will never work with you. You mentioned making the service better for our customers; but the American citizens aren't our customers—about 400 junk mailers are our customers. Your service hurts our ability to serve those customers.' The USPS's Chief of Digital Strategy said Outbox's business model 'will never work anyway. Digital is a fad.' The USPS wouldn't work with Outbox to forward customers' mail, and that eventually destroyed the business."

34 of 338 comments (clear)

  1. Incomplete by binarylarry · · Score: 5, Funny

    They left out the part where the Postmaster General had SEAL Team Six round up the executive team, waterboard them and remand them to the guantanamo detention center where they could learn the error of their ways.

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    1. Re:Incomplete by binarylarry · · Score: 5, Insightful

      OH so I guess all of that DIDN'T happen.

      Thanks Ralph!

      --
      Mod me down, my New Earth Global Warmingist friends!
    2. Re:Incomplete by Anonymous Coward · · Score: 3, Informative

      I'm betting that it didn't happen, nor did what was in the summary happen. I'm not saying it is a complete lie, but I suspect a great deal of creative license was taken while paraphrasing.

    3. Re:Incomplete by LynnwoodRooster · · Score: 4, Informative

      The USPS is, in fact, a Government agency:

      "The United States Postal Service (USPS), also known as the Post Office and U.S. Mail, is an independent agency of the United States federal government responsible for providing postal service in the United States. It is one of the few government agencies explicitly authorized by the United States Constitution. The USPS traces its roots to 1775 during the Second Continental Congress, where Benjamin Franklin was appointed the first postmaster general. The cabinet-level Post Office Department was created in 1792 from Franklin's operation and transformed into its current form in 1971 under the Postal Reorganization Act."

      Required by the US Constitution, and a cabinet-level post back in 1792. Spun off as an independent GOVERNMENT agency in 1972.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    4. Re:Incomplete by afidel · · Score: 4, Insightful

      And yet Congress gets to set their budget and give them unrealistic unfunded mandates that no business or government agency could hope to achieve (ie funding retirement for workers not yet born).

      --
      There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
    5. Re:Incomplete by Predius · · Score: 3, Interesting

      Not entirely true. While they don't collect funds collected via taxes, they also don't PAY taxes on many things, like say property taxes for their offices, sorting facilities, etc. So they indirectly are Government funded, at the state and municipality level.

    6. Re:Incomplete by Anonymous Coward · · Score: 5, Insightful

      While they don't collect funds collected via taxes, they also don't PAY taxes on many things

      See, they aren't that different from other big corporations, after all.

    7. Re:Incomplete by fibonacci8 · · Score: 4, Insightful

      Not entirely true. While they don't collect funds collected via taxes, they also don't PAY taxes on many things, like say property taxes for their offices, sorting facilities, etc. So they indirectly are Government funded, at the state and municipality level.

      So they're funded in the same way religious groups and non-profit organizations are funded by the government.

      --
      Inheritance is the sincerest form of nepotism.
    8. Re:Incomplete by Anonymous Coward · · Score: 5, Funny

      "Looks like a duck, quacks like a duck.."

      Yeah, be careful with that one. Could be a Cormorant. Buddy of mine found out the hard way and had to pay a hefty fine. Just sayin' ...

    9. Re:Incomplete by AthanasiusKircher · · Score: 3, Insightful

      Much closer to the truth is that the government has massively slashed taxes on the mega-wealthy without dropping its spending nearly enough to pay for the overwhelming cut. If taxes on the wealthy simply returned to the levels we had in the 1960s, the deficit would go massively negative, and the debt would be paid off in approximately two decades.

      I guess you haven't heard of the Laffer curve then, eh?

      Are you really naive enough about macroeconomics to believe that you could simply switch from the current tax brackets up to 90% or whatever taxation of the wealthiest, with everything else in the economy just remaining exactly the same, so we could pay off the debt? Changing economic policy on such a huge scale simply cannot let everything else remain exactly the same.

      Basic principle of the Laffer curve: If you tax at 0% interest rate, you'll get no government revenue, obviously. If you take at 100% interest rate, you'll get no tax revenue, because people will have no incentive to work and/or people will move out of the country to avoid taxes. So, at some point between 0% and 100%, there is a point where you get maximum revenue.

      You see, when you decrease tax rates below 100%, you leave more money in the private economy. That additional money goes into whatever rich people do with it -- most don't simply bury all of it under their mattress. Often, a lot of it gets invested. Those investments earn more money. And that additional money then gets taxed as more income -- hence additional government revenue. If rich people invest in companies, those companies might hire more employees, and those employees earn wages, which then can be taxed, for more government revenue. So, at least in some cases, leaving more money in the pockets of the rich will ultimately result in more tax revenue, not less.

      Now, there are plenty of people who will debate the effects of tax breaks for the rich, and whether that money ends up "trickling down" to help middle class and poor people or not. But we don't need to debate Reaganomics here, because that's not the question. The question is not whether tax breaks help poor people, but whether tax raises will actually bring in more government revenue in the form of taxes.

      And the answer is that maximum revenue probably lies somewhere in the middle. It's definitely less than 100%, but more than 0%, obviously. It's probably greater than our current tax liability for wealthy people (though some would disagree with that). But it's probably less than the 90% tax rate or whatever it was in the 1960s.

      If you did increase taxes to that rate, you might be able to maintain some sort of revenue for a couple years, but it would drop off as rich people pulled back on investments, sent money into other countries or various tax shelters, etc.

      And anyways... you really don't want to just suddenly pay off all the national debt. Trust me. Again, go read a macroeconomics textbook. I know that there's a lot of the mindset out there that we need to run our country like you'd balance your home checkbook, but your home checkbook doesn't issue sovereign currency, it can't force people to use its currency as legal tender, and it can't force people to pay it back in the form of taxes.

      The point is: when the government goes into deficit, it increases the base money supply (referred to variously as M0 or MB). Basically, the government "spends" money and that money shows up in the private economy as "currency." Central banks lend out that money. Other banks lend out that money. Rich people invest that money. Credit gets built on credit, which gets built on credit -- but it's all built on top of the base money supply.

      If you start a massive debt reduction, you'll suck huge amounts of base money supply out of the economy. The only way for the private econom

  2. Obligatory by jhstuckey · · Score: 5, Informative

    Do you like golf, Mr. Kramer?

  3. Their business model sucked by CrimsonAvenger · · Score: 5, Insightful

    Frankly, the idea of a company opening my private mail for me, reading it, scanning it in, then making it available to me bugs the crap out of me.

    Were these guys trying to get a contract with the NSA? Or did they just want to read my stuff themselves?

    --

    "I do not agree with what you say, but I will defend to the death your right to say it"
    1. Re:Their business model sucked by n1ywb · · Score: 4, Insightful

      I was BEGGING for this service a few years back when I was spending extended periods at sea. I'm sure anybody who goes on extended overseas trips would love it.

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      -73, de n1ywb
      www.n1ywb.com
    2. Re:Their business model sucked by icebike · · Score: 5, Funny

      I was BEGGING for this service a few years back when I was spending extended periods at sea. I'm sure anybody who goes on extended overseas trips would love it.

      Including Mr Snowden.

      --
      Sig Battery depleted. Reverting to safe mode.
    3. Re:Their business model sucked by mschaffer · · Score: 5, Funny

      Some day, he may be able to get the scans via a FOIA request.

    4. Re:Their business model sucked by iroll · · Score: 4, Insightful

      Google "Earth Class Mail."

      These services existed before Outbox and continue to exist now that it's gone. They just don't assume that the USPS wants to facilitate their businesses for free (or at a loss), so you don't see their CEOs being interviewed for hand-wringing articles about how bad the government is.

      I have no doubt that the USPS is run by incompetents, but that doesn't mean they're the only incompetents in this story.

      --
      Repetition does not transform a lie into the truth. - FDR
    5. Re:Their business model sucked by Charliemopps · · Score: 3, Insightful

      Frankly, if I could just find a service that would burn my mail instead of delivering it to my door, I'd be happy. I have to empty the bin into my fireplace every few months and it's irritating.

    6. Re:Their business model sucked by greg1104 · · Score: 4, Informative

      Yeah, the failure of Outbox is barely connected to USPS policy. "their market model needed to scale quickly to become profitable". It didn't. The end. Their big problem was paying for the fleet of vehicles? Wow, no one could ever see that coming.

    7. Re:Their business model sucked by Bing+Tsher+E · · Score: 3, Informative

      All of my paper mail, thankyou. I will decide what is private and what is not.

      Google wannabes can fuck off.

    8. Re:Their business model sucked by stoploss · · Score: 3, Interesting

      Since they are the delivery mechanism, they need to pay attention to the metadata.

      There is a difference betwen your bank, your doctor, or your ISP having information about you and the NSA having this information.

      ...and since the USPS has performed the latter function (providing images of the exterior of literally every piece of mail to other government agencies, since the 1970's), then it seems quite obvious they have transcended their need for the metadata.

      Seriously, this is called the "mail covers program", and you can read the New York Times article about it from last year. Oh, and FYI, each of those square barcodes you see on modern stamps printed by the APC (i.e. that ATM thing in the USPS lobby) has a unique serial code that is tied to your credit card and a picture of you that was taken by the APC. Obviously, that's available to other government agencies too.

      Enjoy the land of the free and the home of the brave!

  4. Re:USPS should offer a subscription service by mythosaz · · Score: 4, Insightful

    Are you willing to pay them more than the combined members of the Direct Marketing Association, who'll crush the USPS like insects if they allow you, the product, to opt out of their service?

    Direct Marketers own the USPS, lock, stock and barrel.

  5. Re:My biggest gripe by the+eric+conspiracy · · Score: 3, Informative

    WRONG.

    USPS does have such a service. It's called click-n-ship.

    https://www.usps.com/business/...

  6. Re:USPS should offer a subscription service by rahvin112 · · Score: 5, Informative

    The postmaster General is right, those 400 junk mailers are paying for the entire system. That letter you send once a year for $.50 doesn't even come close to paying the billions those junk mailers pay that provides the money the USPS needs to have 100K employees and a fleet of vehicles and planes that would dwarf some governments.

    Contrary to what some small government people claim, the USPS is the envy of the world. The overhead is near non-existent and the delivery network is world class in efficiency. Private companies can't come near the efficiency of the post office. The reason we have a system so efficient is that the natural monopoly was recognized and non-profit corporation beholden to government was created. It's a good thing that the post office recognizes that the customers paying the bills are the junk mailers. It's also a good thing that the USPS is overseen by government regulators (except of course congresses attempt to kill the USPS by mandating that they contribute 75 years worth of retirement in 10 years). That government regulations guarantees that it's a crime for anyone to open my mail, and that the courts have precedence putting searching the mail as equivalent to breaking into your house and reading your diary. This "service" would be a field day for the NSA because the digital records would not have the same protection that he physical envelope does.

    If private run companies like UPS were doing first class mail the delivery charge for a first class letter would be several dollars.

  7. You don't need it by mattack2 · · Score: 5, Informative

    You don't need something like this anyway.
    1) get your bills electronically, and/or set them up for automatic payments
    2) use dmachoice.org and optoutprescreen.com to stop virtually all junk mail (former for 'regular' junk mail, latter for the credit card offers). Yes, they're run by the junk mail companies, but they work, and no, I don't work for them.

  8. Re:USPS should offer a subscription service by rahvin112 · · Score: 5, Informative

    The USPS has not received a dime in Tax dollars while I've been alive and that's a long fucking time. That $5 billion dollar loss you heard about last year and trumpeted by the small government pinheads was in fact a fake loss created by congress that had no material affect on their operations. It was a failure to deposit $5 billion into a retirement fund for USPS employees that haven't been born yet.

    Get your facts straight.

  9. Re:USPS should offer a subscription service by afidel · · Score: 4, Insightful

    In 2010 the USPS brought in $17,300 million dollars from standard mail, there were 117.5 million households in 2010 which means the USPS was paid roughly $147 per household to deliver bulk mailings.

    --
    There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
  10. Call the Waaaaaaahhhhmbulance.... by beaverdownunder · · Score: 4, Insightful

    Rather than continuing to bitch about how your darling child idea didn't work out, maybe you should just come up with something else and move on?

    This is getting a bit old...

  11. Re:USPS should offer a subscription service by RabidReindeer · · Score: 3, Funny

    That's a good question. As a start, it would be nice to know the number that the USPS is being paid to deliver junk mail to my house. I'm sure I could beat it for my house alone, I'm sure it comes out to cents per month, but we wouldn't know that without knowing the actual amount.

    In 2010 the USPS brought in $17,300 [npr.org] million dollars from standard mail, there were 117.5 [wikipedia.org] million households in 2010 which means the USPS was paid roughly $147 per household to deliver bulk mailings

    So if the above is correnct and I haven't screwed up the math, that would be about 1225 cents per month?

  12. Re:USPS should offer a subscription service by KermodeBear · · Score: 4, Informative

    I don't know what USPS service you have, but in my experience:

    1. USPS is rarely less expensive sending packages than FedEx or UPS.
    2. USPS has slower delivery times than FedEx or UPS.
    3. USPS has a much higher rate of package damage than FedEx or UPS.
    4. USPS has a generally less helpful and less polite staff in the offices than FedEx or UPS.

    It is inferior in every way. We can talk about delivery of letters to mailboxes, but I'm sure you know that the mailboxes on the side of the road are considered to be property of USPS. It is illegal for anyone other than USPS to deliver a letter, package, or anything else to that mailbox.

    This means that if FedEx or UPS wanted to enter that business they would forced to set up secondary post boxes or deliver directly to the house by foot. I don't know how much this enters into the economics, but god dammit, that's my fucking mailbox.

    I paid for it. I dug the hold. I set the post. I poured the concrete. It's my mailbox. Their dictatorial annexation of the mailbox that came from me is exceptionally douchey and for that alone USPS should be smacked upside the head.

    If you have USPS service so exceptional that you find it to be truly better than all other alternatives, well, great, good for you. It just doesn't seem to mirror the experience that I and everyone else I know has.

    --
    Love sees no species.
  13. Re:BOO FUCKING HOO! by Grishnakh · · Score: 4, Insightful

    I agree completely. Were the founders of this startup really that naive? I could have told them this was a stupid idea years ago. The USPS has two main revenue streams: 1) junk mail, and 2) small packages (they're a big fan of Ebay; they're also working with Amazon now to do Sunday deliveries in some places). They also are a fan of Netflix, and work with them to ship movies faster (the USPS scans the returned movies before Netflix gets them, so Netflix can send your next queued DVD before they get the old one back).

    What ever gave them the idea that the USPS would be in favor of screwing over one of their main customers (the junk mailers)?

    If you don't like junk mail, think about it this way: the junk mailers are keeping the USPS afloat, and basically subsidizing cheap First Class delivery for everyone.

  14. View from the other side by Guppy06 · · Score: 5, Informative

    http://postalnews.com/postalne...

    If nothing else, TFA doesn't sound like a particularly unbiased source.

  15. Re:BOO FUCKING HOO! by FlyingCheese · · Score: 5, Informative

    No it's not. The problem with USPS is that they have to pre-pay pensions 70 years out. No other Government agency or private company needs to do this, that's purely USPS regulation thanks to Congress. That is their main hurdle, not the unions or employees "getting paid too much" (seriously, do you even know any postal workers?).

  16. Re: they lied. businesses have always funded retir by Anonymous Coward · · Score: 5, Interesting

    That is an outright lie. The USPS has NEVER failed to meet retirement fund contributions and has never been in the situation you describe. The reality is Congress required the USPS to PREPAY 75 YEARS worth of retirement over 10 years. They are being forced to put retirement funds in for employees that have NOT even been born and under the assumption that they will grow employment at 3% per annum for those years. This requirement also does NOT allow the USPS to reduce hours, post offices, delivery or increase stamp prices. It's a deliberate attempt to fool idiots like you into thinking the most efficient business in the US is a failure so the people will allow congress to sell the USPS to fedex and ups for major kickbacks to the republicans. Without that utterly stupid retirement prefunding requirement the USPS was in the black almost 100 million dollars last year.

  17. That's not how memory works. by mosb1000 · · Score: 3, Informative

    The problem you're having is that you don't understand how memory works. Your brain isn't a tape-recorder. You remember some of the ideas expressed, and then use those to reconstruct the conversation after the fact. Everything you remember is paraphrased. It's not creative license, nor is it a lie. You simply don't remember the precise details.