Hacker News new | comments | show | ask | jobs | submit login
Outbox vs. USPS: How the Post Office Killed Digital Mail (insidesources.com)
275 points by ilamont on Apr 29, 2014 | hide | past | web | favorite | 161 comments



Anti-Post Office hatchet job:

> So having worked on the Hill they knew of the USPS’s well-documented inefficiencies. As they describe it, they “knew that the USPS would not be able to work out its own problems, so perhaps naively, we hoped to partner with USPS to provide an alternative to the physical delivery of postal mail to a subset of users, hoping this would spur further innovation and cost savings.”

The Post Office is insanely efficient. The only reason it has budget problems is because Congress causes the budget problems. http://thinkprogress.org/economy/2011/09/28/330524/postal-no...


Are you sure about that? It seems like there is nothing 'insanely efficient' about physically sending paper across the country when the recipient has indicated that no, you actually don't need to do that.

It's like the USPS has an insanely optimized implementation but inefficient algorithm for delivering mail. Change the algorithm and you can throw all your micro optimizations out the window.

The important quote from the article is this one:

> ‘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.‘

This sure makes it sound like the USPS isn't so much a 'public good' as it is a private, tax payer funded business whose primary business model is advertising.


I don't think you understand how junk mail works. There are a few hundred companies in the US who print junk mail. They are located in the cities that the junk mail will eventually be delivered in. They receive huge discounts to pre-sort the mail by zip code and palletize it in such a way as to cleanly slip into the USPS's system at the last possible logistic point. It might cost a regular human being $0.49 to send a letter. A presort mailer might pay $0.12 or $0.09 or $0.07 (or less) to send a letter. But that's because the USPS provides only the last mile rather than cross-country transport.

The reason this revenue stream is so important to the USPS is logistics, overhead vs marginal cost. As long as you're delivering a couple of pieces of mail to each house every day you can price those items marginally. Average Mail Per Address (AMPA) needs to be at least 3-5 for the USPS's pricing to work. If everyone opted out of junk mail AMPA would drop into a range more like 0.5-1.5 and then there's proportionally much less in the way of marginal cost and it's all the overhead of driving/walking from one address to the next. And then the USPS has to change all the pricing to go up by 200% or more and that'll never fly in Congress.

The other problem is that reducing the mail volume by 50%-90% would result in massive layoffs of workers (which won't look good for Congress) and it would reduce influence and power for those in charge of things. Few people ever willingly accept their diminishing importance.

I'm not in favor of the USPS continuing to assault my mailbox with junk mail. But I don't think there's any hope of things getting fixed until they have such an awful year that mail stops for a while and Congress reforms their mandate. I give it maybe 20% odds of happening in the next decade.


How long has the USPS been an ad-supported company?


I am not sure exactly. I would imagine that by the 1970s or 1980s it was. I used to work for a different mail forwarding company than either Outbox or Earthclass Mail and worked on an internal version of the mail imaging/OCR/barcoding/etc machine.

The papers that I read detailed the efforts of folks to make OCR software primarily for the USPS for mail sorting machines. The earliest papers I saw were early 80s. You can read more about the history of mail sorting here: http://en.wikipedia.org/wiki/Mail_sorter

I would tend to assume that the advances in mail sorting roughly coincided with bulk mailing but I can't point the causation arrow. It could be that bulk mailing really took off and the USPS got swamped and then people started making mail sorting machines. Or it could be that people invented the machines, the USPS then rolled them out and then you saw presort discounts and then bulk mailing took off. I'm not sure which.


Brilliant insights -- both you and GP.

The USPS is the original ad-supported service where you are the customer. Mind blown.


You meant "you are the product".


Wait, so we're faced with all this spam just because Congress won't let USPS charge $1.50 to send a letter?


Even if Congress LET the USPS charge $1.50 per letter that doesn't guarantee that they would stop the dramatic discounts for presorted mail.

If Congress MANDATED that the USPS charge $1.50 per letter with no discounts the deluge of junk mail would be vastly reduced. When the price goes up 10x the volume would go down dramatically. Maybe only 5x or maybe 50x. It probably wouldn't be linear. But it absolutely would go down.

Even better is that what little junk mail you got might actually be useful because at the $1.50 price the company would have to be statistically pretty damn sure you're interested.


> It seems like there is nothing 'insanely efficient' about physically sending paper across the country when the recipient has indicated that no, you actually don't need to do that.

Forwarding is a negligible percentage of USPS's total mail volume. Like other commenters have mentioned, it's only designed for temporary use while you get settled at a new address.

USPS has machines that read the handwritten addresses on a label, and prints a barcode. The barcode has information that other machines use to bin mail by delivery address, in the order that the mail will be delivered. It's pretty amazing how the system works.


‘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.‘

That, in my opinion, is the key takeaway here. The Post Office does not serve the American public; it serves an oligarchal group of junk-mailers.

Maybe we should tell the Post Office to go to them to cover their next shortfall, instead of jacking the price of first-class postage stamps again.


There are other benefits. It's a federal crime to tamper with US Postal mail or private mailboxes. It's also a federal crime to commit fraud by using the USPS.

It's somewhat like fax, there are differential legal protections in place that make it a preferred service for certain scenarios.


USPS is not taxpayer funded.


According to this it had an 8.5 Billion dollar shortfall in 2010. If they aren't taking tax payer dollars already, it seems like they soon will be.

http://en.wikipedia.org/wiki/United_States_Postal_Service#Re...


Congress caused this shortfall by enforcing insane pension funding requirements. This is not an operational issue with the service, just a legislative issue.


Congress caused the budget problems by forcing the USPS to move their obligations onto their balance sheet.

See previous discussion on this topic:

https://news.ycombinator.com/item?id=6710232#up_6710602


There's even more to it. Business is good for the USPS as more people shop online. They carry a lot of packages for FedEx and UPS to places they won't go. Their pensions are overfunded by billions. This source estimates $82 billion. The article is from 2011, but the process to reclaim the money is ongoing.

http://www.pionline.com/article/20110627/PRINT/306279976/usp...


“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 article blows right past this like it's insignificant. Junk mailers sort their own mail, drop ship it to the local BMC, and pay the post office for the privilege. This subsidizes the regular mail. If you can get rid of junk mail with a mouse click, it's not worth it.

The post office getting upset about ways to prevent junk mail from being delivered is just like a website complaining about Adblock.


>The post office getting upset about ways to prevent junk mail from being delivered is just like a website complaining about Adblock.

That's the thing, though; some websites will let me pay them directly for an ad-free experience. The post office won't.

I would be happy to pay the post office $5 a month just to say "resident doesn't live here" I'm always afraid a check or bill or something will get tangled up in the 'penny saver' - hell, you could probably get me to pay more for more sophisticated filters, but even $5/month has got to be a hell of a lot more than what the bulk mailers are paying to get into my inbox.

And it's probably an even bigger win; I'm not the sort of person who reads the penny saver; the post office is making more money /and/ saving the penny saver people money if they let me pay them not to deliver said periodical.

The fremium "Pay me money, or watch ads and the advertisers will pay me, your choice" model is an old one in internet terms, and one that most people seem to be pretty happy with.


The problem is if too many people opt out then the junk mail business model fails because advertisers won't advertise. It's not the loss revenue from a few houses they case about its the number of addresses the junk mailers can ship to.


Then let the post office charge enough to replace the advertising revenue.

I also suspect your wrong in saying that advertisers will completely give up if the number of deliverable boxes shrink. I mean, sure, they will want to pay proportionally less, but I suspect post office revenue from advertisers would decline smoothly with the rise in revenue from the paid opt-outs, assuming you got the price right.

My understanding is that fourth-class "to resident" mail is usually targeted at the most price sensitive customers; people for whom clipping coupons is often a good use of time. Exactly the people who are unlikely to pay money to sort their mailbox.

Most of the higher-end mail, like those goddamn pre-approval notices from AmEx, are lovingly personalized, and ship out 'pre-sorted first class' or something. I'm only talking about opting out of the fourth class "penny saver" type junk.


You might be surprised to learn this but third class mail (junk mail) generates more revenue than first class mail. Not only that but first class mail is decreasing revenues each year.

That being said, the problem is that third class mail is a lot more revenue than most people realize. For example $5/mth is not enough to cover the loss revenues. In fact I would suspect that $20-$50/mth is not enough. Think how much mail you get on a daily basis, multiplied by x amount times 30 days. You're probably looking at closer to $100/mth...


>That being said, the problem is that third class mail is a lot more revenue than most people realize. For example $5/mth is not enough to cover the loss revenues. In fact I would suspect that $20-$50/mth is not enough. Think how much mail you get on a daily basis, multiplied by x amount times 30 days. You're probably looking at closer to $100/mth...

I find that hard to believe.

Think about it for a moment. How much do you think the coupon vendors actually make per customer? Even (or maybe even especially) the type of person who clips coupons isn't going to spend that kind of money on discount toilet paper and 'invest in mail-order gold' scams or whatever is being flogged. The people targeted by that garbage don't have a lot of money to begin with.

$1,200 per year per postal customer would indicate that postal spam results in nearly an order of magnitude more revenue per user than google, who makes on the order of $130/user/year.

Yeah, I doubt very much that the post office is getting $1,200 per year in advertising revenue per user.

references:

http://www.businessinsider.com/googles-ad-revenue-per-user-2...


This is a problem why? Fuck'em.


Probably just me, but the line about 400 junk mailers being our customers seemed like a stretch of a comment from someone in the position of being postmaster general. I have trouble believing he or she would say that to these guys and not just give some other explanation.


I don't have trouble believing it. People in positions of power like that often tremendously underestimate their danger of exposure. Often to flaunt their power or crush opposition, they will overplay their hands.

Look at the photos that Congressman Anthony Weiner sent on his cell phone. You'd think that a repeated error in judgement like that would be damned near impossible... but there you have it.


It's more than that - it's that I find it hard to believe that the Postmaster only considers junk mailers his or her customers - and doesn't pay any attention to anything else. So I don't doubt the arrogance, I doubt that they would have said something that excluded the ordinary consumer.


Based on my experience of working in the "junk mail" businesses I agree with you - the USPS had disdain for ALL customers, not just junk mailers. The certainly did not try to help in any way. I cannot imagine this quote being true. I want to defend them but cannot - postal mail is in secular decline but will survive as where you live will always be a useful key to your identity. Just get ready for change (and will take bigger ideas than Outbox to do it)


The interesting thing here to me is how people get captured by business models.

The post office started out as an important public service. "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds." The post office is mentioned in the US Constitution because at the time it was immensely important.

But after enough time in bed with the junk mailers, they've abandoned all but a pretense of that. And it shows. They shifted from serving American citizens as a duty to serving American citizens on a platter. It happened inch by inch, I'm sure, but now they're trapped.

Let that be a lesson to anybody who's starting a business: choose your business model wisely, because over time it will win out over everything else.


The USPS is still important. For example, no private carrier has a Constitutional mandate to serve all Americans. They are essential for rural communities: for example, if you need medication but there's no pharmacy nearby, the USPS will deliver it to your house even if UPS and FedEx won't.

Also, the USPS kicks everyone's ass in time and cost when it comes to delivering small packages. For a 12-oz package from NY to SF, USPS delivers in 3 days for about $2 while FedEx and UPS start at ~5 days and $10.


I've also never had USPS hold a package because it got to me too quickly, and I've absolutely had commercial carriers do that to maintain artificial separation between service tiers.


Don't conflate the Universal Service Obligation with door-to-door delivery; my dad has to go to the post office to pick up his mail. Of course, he lives on the Big Island of Hawai'i so it's a small price to pay.


USPS delivers in 3 days for about $2

This sounded much lower than anything I've paid recently. I just tried pricing this on the USPS website and got $3.94.

http://postcalc.usps.com/MailServices.aspx?m=6&p=0&o=12&dz=9...

Arguably a bargain, but considerably more than $2.

Separately, I disagree with your implication that the USPS has an obligation to deliver to your house. Do you know what the exact law or statute is?

I'm familiar with several places where this is not true, where Fedex and UPS will deliver to the door but USPS will not. Some of these are very rural ranches in the Southwest, but others are just small towns that do not offer delivery services and instead hold all mail at the post office.


> For a 12-oz package from NY to SF, USPS delivers in 3 days for about $2 while FedEx and UPS start at ~5 days and $10.

The price comparisons aren't fair. UPS and FedEx either turn a profit or go out of business. You can see this when you compare the two groups on tracking, customer service, innovation in logistics, etc. If a business depends on paying customers who have choice, despite the disadvantages they have when compared to the USPS, they find ways to improve their services and cut costs.

Meanwhile, the USPS can tap on the government's shoulder and artificially remain in business.


I'm an American citizen, and I get a tremendous amount of utility from the post office - and it's increased pretty much every year in recent memory.


Sure. Veal calves are well cared for. And I'm sure some inclination to service remains. But when it comes down to a conflict between what you need and what the junk mailers need, you'll lose.

Personally, I get less and less value from the post office. 90% of my physical mail goes immediately in to the recycle bin. At least here, they're bad at delivering packages. And my local post offices are depressing experiences: long lines, dispirited workers, grim surroundings.


I've had friendly service recently in DC, NC, NJ and VA, and flat-rate Priority mail has utterly changed my interaction with shipping things, to the point that I now no longer even have a good idea where the nearest FedEx or UPS is, and would actively prefer my packages come via USPS.


Many many people in large cities would prefer USPS for all package delivery. USPS tends to have keys to apartment building vestibules, allowing them to leave packages in secured areas instead of on a stoop.


And this would have prevented the insidious theft of a large box of Girl Scout cookies, many years ago, when I lived in Boston.


Other businesses are also not required to pre-fund their pensions and few other businesses are not required to go to congress for a price increase.

The cost of mail has not kept up with inflation, there are some very expensive routes available for 49 cents, and they are one of the very few government services expected to be revenue neutral.

Thus, junk mail.


Other businesses are also not required to pre-fund their pensions...

Which has got to be the biggest scam that management and the union bosses have ever colluded to inflict on workers. "Sure, we'll pay you after you retire, just trust us! Also please don't ask too many questions about where the money's going to come from." The exceptions to this scenario occur when the workers in question are really important to Congress, e.g. auto workers' pensions were "bailed out".


Precisely.

Every business with a pension promise/agreement should be required by law to maintain the monies to properly fund them. Anything else is criminal negligence and/or conspiracy to commit multiple felonies via theft.


The post office getting upset about ways to prevent junk mail from being delivered is just like a website complaining about Adblock.

Yeah, they're both the paid subsidies that allow you to use a service for the price you currently do.


Except I can choose to not visit an ad supported website, yet I cannot stop getting postal mail. I get literally zero benefit from postal mail deliveries (it's all, 100%, junk) and am forced to pay serious money every month to drop off ~30lbs of postal mail at my town's recycling center. Whatever service they claim to provide would be better done by UPS and FedEx for a lower overall cost to the recipient. Let the junk mailers all go out of business.


in germany you get paid if you bring paper to commercial recycling centres. virtually nobody does it though, because the regular municipal waste disposal picks it up for free. and yes, it really is free, you only pay for disposal of unsorted waste, which goes in a different bin.


You get a pound a day of junk mail? That's absurd.


Maybe just put the mail in the trash if you don't wanna pay the recycling cost; just saved you "serious money."


> Junk mailers sort their own mail, drop ship it to the local BMC, and pay the post office for the privilege. This subsidizes the regular mail.

Actually, some evidence shows quite the opposite, that first class mail costs are subsidizing the junk, because the price paid for junk is less than the savings by having the junk dealers do the auto-sorting and drop shipping.

See:

Title: Junk Mail's Endless Summer URL: http://www.huffingtonpost.com/todd-paglia/junk-mails-endless.... Quote: "Our standard postage subsidizes junk mail. "

Title: Why Do We Subsidize Junk Mail? URL: http://shuthimup.mitzenmacher.net/?p=252 Quote: "So why do we pay 45 cents to mail a first-class letter while direct-mail advertisers pay only 18.5 cents? Can you say “crony capitalism?” Can you say “union busting?” This amounts to nothing more than a very costly subsidy given to the direct-mail industry, at the expense of first-class mailers,"

Title: Snail Mail Spam Subsidies Stuttering Towards A Stop URL: http://blogs.the-american-interest.com/wrm/2011/09/08/snail-.... Quote: "the USPS loses billions of dollars each year so that advertisers can send out billions of pieces of spam at below market costs."


first link: 404 second link: site unavailable third link: 404


Corrected links (here because HN is no longer allowing edits to the original):

Junk Mail's Endless Summer: http://www.huffingtonpost.com/todd-paglia/junk-mails-endless...

Second link, seems to simply have disappeared.

Snail Mail Spam Subsidies Stuttering Towards A Stop: http://www.the-american-interest.com/wrm/2011/09/08/snail-ma...

Found another link in searching for the new URL's of these three: Subsidizing Junk Mail in the Great Recession: http://www.huffingtonpost.com/todd-paglia/subsidizing-junk-m...


It seems the underlying assumption to advertisers here is that junk mail has a higher conversion rate than junk email. And that may very well be the case - anecdotally, you'll have more eyeball-time on that colorful supermarket ad lying on your counter than you will on an email-like message that you'll immediately delete. And additionally, there's the coupon use case which allocates existing customers' interest to overstocked items. Coupons can go digital, of course, and you can surface ads in a Gmail-like interface, but there's a chicken-and-egg problem: until the average shopper replaces their entire remember-to-go-shopping workflow with a digital one, there will still be utility from physically delivered coupons and advertisements. I'd even argue that at a national scale, junk mail promotes consumer spending (vs. saving) in an economically significant way by alerting people to limited-time offers.

So even if the Post Office were to operate digitization and digital delivery themselves, and access all of the revenue from hosting digital advertisements, if the assumptions above are correct, it would be the "same slice of a smaller pie," since conversions could drop in aggregate. They serve an orthogonal segment of the advertising market from the Googles of the world; it would be like leaving your own perfectly-huge sandbox untended to go play in another kid's, and only get a small corner of it. Even if they weren't federally mandated to have the capacity to deliver mail to any address, it wouldn't be in their interest business-wise UNLESS those assumptions above are changed dramatically.


They don't completely ignore it. It is mentioned at least two other times, including in the final paragraph of the article:

> USPS declined to provide further comment, or respond to these questions, of any kind, despite repeated requests. USPS did not dispute Evan’s recollection of their USPS meeting in DC and did not comment on whether junk mailers are the Post Office’s customers versus average Americans.


I mean that they completely ignore discussing the claim on its merits, and just use it without context to paint USPS as a bunch of Luddite rent-seeking goons, as with Uber and taxi laws, or AirBnB and hotel laws.


It's become "the silicon valley model" for public policy it seems. Appeal to your audience's sense that they are definitely smarter then everyone else, to try and effect stupid changes in public policy in sectors they (and possibly [the general form of] you) don't really understand.

Hell, LightPeak tried to do this with RF Engineering when they wanted permission to obliterate things like satellite SOS communications by using spectrum they knowingly acquired as satellite use only for terrestrial transmissions.


Does anyone have more-or-less precise numbers for how much the post office is subsidized via junk mail? How much would a stamp cost otherwise, or otherwise how much would the shortfall be?


Do you have a source on that? I've always heard the opposite, that we subsidize the junk mailers.


Well, we pay them our time and attention, but the system wouldn't work if its biggest service operated at a loss:

http://www.nytimes.com/2012/09/20/business/seeking-revenue-p...


That article states that 48% of all mail, or 84B pieces, is junk mail and corresponds to $17B in revenue (works out to 20 cents a piece). Seems to indicate that most revenue comes from non-junk mail. Also, it states nothing about profitability. The USPS as a whole operates at a loss, why couldn't junk mailing be operating at a loss?


>The USPS as a whole operates at a loss, why couldn't junk mailing be operating at a loss?

Because there's no earthly reason to take a loss on advertising?

What you're not accounting for here is the cost to pick up individual envelopes from your house, and the cost of dropping a presorted bundle shipped to the BMC into the truck.


Much of how the USPS operates, including how much they charge and what services they offer to other businesses, is mandated by Congress. They don't have any choice.


And much of what congress mandates is purchased by the junk mailers.


The reason the USPS operates at a loss is a combination of core inefficiencies that have nothing to do with the product [e.g. They trust their largest mailers to pay them accurately then threaten them with fines, rather than calculating the amounts at the start. The requirement to deliver to unprofitable rural addresses].


Like anything along these lines, you can construct a lot of different narratives.

Most USPS revenue does come from First Class mail (though it's declining). Furthermore, "standard" mail seems to have a smaller contribution to profits than it does to revenue. http://about.usps.com/news/national-releases/2012/pr12_0217p...

However, allocating costs is a cost accounting exercise that depends partly on how you treat fixed costs. If you assume that most of the costs associated with first class mail are going to happen anyway, then everything you get from standard mail is pure gravy. Of course, there are some costs associated with actually delivering junk mail (and periodicals) but it probably doesn't have a huge effect on how many post offices you have, existing pension benefits, and so forth. In fact, according to the prior link: "Labor costs, which are approximately 80% of total costs, create a fixed cost structure which is not readily scalable in response to changes in volume and revenue."


Yes, I understand all this which is why I was hoping there was a good study or something done on the matter. Junk mail accounts for 48% of all mail volume, but only 26% of revenue. What would be the effect of increasing the cost of junk mail until its volume decreased by half? You'd see a 24% decrease in mail volume, but less than a 13% decrease in revenue. Would this decrease in volume facilitate cutting "fixed costs" like labor? Or are the costs truly fixed? If so, is that for business reasons or due to congressional mandates or what?


That is incorrect.

http://online.wsj.com/news/articles/SB1000142405297020461250... "Overall, the postal service says it makes money on advertising mail—but it could make more."

The only category of mail it loses money on is things like Magazines & Catalogs which are not 'junk mail'.

However, it isn't like an Ad Company complaining about AdBlock...standard mail: "The postal service said in fiscal 2010 standard mail covered nearly one and a half times its cost."

People complain about the advertising mail because it is cheaper...but it is cheaper since they don't have to sort it, send it to specific, individuals, etc. The cheap price is due to the underlying costs for the USPS being different. Sorting mail and collecting it on an individual basis [rather than in bulk and being delivered] is not magically free somehow.


"Contributing to the agency's record $8.5 billion shortfall in fiscal year 2010 was a loss of $1.7 billion on several mail products that didn't cover costs, including advertising-mail flat packages—typically catalogs—advertising-mail parcels, and the separate category of periodicals, according to the Postal Regulatory Commission."

"The postal service said in fiscal 2010 standard mail covered nearly one and a half times its cost ... Advertising mail had higher volumes but brought in $17.3 billion, or only 26% of total revenue, due to hefty discounts and lower rates."

So only a few types of mail generate a loss, and it is a loss of $1.7B, and advertising mail generates a profit of $5.7B, yet as a whole USPS operates at a loss of $8.5B. This doesn't leave me with much faith in their self-assessment of the profitability of specific types of mail.


The USPS's profitability problems are purely political and a few process issues. [e.g. The asking people to pay their rate, rather than billing which reverses the normal method of a transaction]

This doesn't include forced money losers as well created by government controls on the USPS [e.g. rural delivery that loses money regardless of what is being delivered and the private corporations refuse to engage in it but instead hand it off to the USPS for the last mile in many cases].

The sad fact is, if the USPS had a level playing field with UPS or Fedex, it would be profitable as soon as the process changes, etc could be put in place. It isn't allowed to do that.

http://www.fool.com/investing/general/2013/03/04/how-the-pos... "That 75-year pre-funding mandate adds substantially to the post office's losses. This is a requirement that no other government agency, let alone a private company, must face. In short, the USPS is paying for people who aren't even employees yet -- in fact, may not even be born yet!

And the USPS has been a model for prudent squirreling. As of Feb. 2012, it had more than $326 billion in assets in its retirement fund, good for covering 91% of future pension and health-care liabilities. In fact, on its pensions, the USPS is more than 100% funded, compared to 42% at the government and 80% at the average Fortune 1000 company. In health-care pre-funding, the USPS stands at 49%, which sounds not so good until you understand that the government doesn't pre-fund at all and that just 38% of Fortune 1000 companies do, at just a median 37% rate. The USPS does better than almost everyone."

Why can't they just raise rates to make postage profitable in the 'bad' categories things: "Now, admittedly just raising postage is an overly simplistic solution, but it gets to a basic truth: lack of sales. Rates are overseen by the Postal Regulatory Commission (PRC), and prices must not rise faster than inflation. A postage stamp has increased just 12% in six years. That's another way that the USPS's mandate to operate like a business is stymied by overseers. Another major type of mail, bulk rate (ads), receives big discounts in exchange for pre-sorting mail, and could withstand higher postage, since they receive much more value than what USPS saves from pre-sorting. Fix: Allow USPS to price correctly.

...

The effects are huge -- costing USPS billions. And new services, it's estimated, could increase sales by nearly $10 billion annually, potentially covering the earnings gap. But Congress would have to agree to those changes after already tolling the USPS bell. In its latest annual report, USPS begs Congress, in the most obsequious bureaucratese possible, to let it raise revenue. The odds look slim."

Other ways they are hamstrung to generate more business: And when USPS tried to take advantage of web shopping? As Elaine Kamarck at Harvard's Kennedy School of Government explains. "But parcel shipments were generated by large organizations and the USPS was not allowed to negotiate discounts and thus lost business. It was forbidden by law from lowering prices to get more business. This resulted in the entirely incredible situation in the 1990s where the United States government negotiated an agreement for the delivery of U.S. government package services with Fed Ex because the USPS was not allowed to negotiate for lower prices!"


Does any of this relate to my original question of whether or not junk mail subsidizes regular mail?


My responses are directly to the comments they were in response to. So that comment was in response to:

> So only a few types of mail generate a loss, and it is a loss of $1.7B, and advertising mail generates a profit of $5.7B, yet as a whole USPS operates at a loss of $8.5B. This doesn't leave me with much faith in their self-assessment of the profitability of specific types of mail.

Because you switched from 'is X subsidized' to 'well...if X is profitable, it must be because they cannot perform accurate accounting'.

They are both profitable categories of mail and neither are 'subsidized'. The 'subsidized categories' are those that are losing money.


Actually worked in the field for a couple of years, starting off addressing and sorting mail, and working my way up to being an intermediary between logistics and USPS:)


What's wrong with this story is that Outbox didn't want to do the one thing that would keep it in business: make its customers fill out a form that allows a third party to accept mail on their behalf. There are plenty of businesses digitizing mail right now -- travelingmailbox.com, earthclassmail.com, amongst others. Why Outbox.com refused to go this route and instead decided to go out of business was their decision. There was a workaround (http://travelingmailbox.com/usps-form-1583-ca) -- they just opted not to take it. That's not the USPS's fault.


If I'm reading the article correctly, they did this from the very start:

"It was around this point that they became vulnerable by their own success. The local Austin, TX and San Francisco, CA Post Offices allowed individuals to sign forwarding contracts to have their mail forwarded to Outbox with the intention of it being opened and scanned – without these agreements Outbox’s market model wouldn’t be possible. In practice there are many types of forwarding contracts that the Post Office allows, so these contracts were not necessarily unusual. Further, there were no reports of complaints by customers. These were all customers who wanted their mail to be forwarded, opened and scanned by Outbox."


This paragraph is referring to mail forwarding, not mail agency; this is just the simple form used to divert your mail to another destination, and which is only supposed to be used temporarily. The form that is required to have someone else receive mail on your behalf is a much more "complex" form in that it requires you to sign it with a notary public and then dispatch to various parties in multiple copies, rather than just stopping at your local post office branch.


Consider that the forward approach was basically trying to dump the cost of rerouting the mail - which was expensive enough that it ate Outbox's runway - onto the USPS.


There are 2 problems with using mail forwarding.

1. It can take up to a month or two for mail to switch over in USPS routing 2. It can only be used for short periods of time (consumers have to renew once a year) 3. It's a terrible user experience and obviously Outbox focused on that immensely


Since I came to US, I've been thinking about actually using one of those. These providers seem much cheaper than their equivalents in Europe. Does anyone here have experience with any of those providers?


I use Earthclassmail extensively. It can be expensive.

However, it provides some incredibly valuable services. Mail scanning is great, but check deposit is better. However, it's only worth it if you really need a US address, move a lot, or have enough mail or check volume to justify $80/month.


I assume you write that $80/month off as a business expense, correct?


I live on 3 continents and my life would't be possible without https://www.postscanmail.com/ Much cheaper then Earth Class Mail.


Yea, but they give you a PO Box, which can be troublesome for certain purposes.


Virtual Post Mail has a street address and is much cheaper.


I have a street address in Anaheim CA


I use VirtualPostMail. I'm on the cheapest plan, $10/month, plus an average of maybe $5 for forwarding certain things. I don't get much mail, though.


I presumed this story was going to be about the USPS monopoly on first-class mail and would involve an armed raid to shut down competition, as has happened in the past.

"The monopoly is well enforced. The USPS can conduct searches and seizures if it suspects citizens of contravening its monopoly. For example, in 1993, armed postal inspectors entered the headquarters of Equifax Inc. in Atlanta. The postal inspectors demanded to know if all the mail sent by Equifax through Federal Express was indeed "extremely urgent," as mandated by the Postal Service's criteria for suspension of the Private Express Statutes. Equifax paid the Postal Service a fine of $30,000. The Postal Service reportedly collected $521,000 for similar fines from twenty-one mailers between 1991 and 1994."

http://www.aei.org/papers/economics/opportunities-for-antico...


I call BS on this article. We're not getting the full story. (Using a throwaway account since I'm travelling, and on a public computer; this article pissed me off so much that I had to respond right away)

Background: I used to work for a research lab which got a majority of its funding from USPS. Worked there for ~10 years. Interacted with the USPS engineering folks in Merrifield, VA very closely. I can assure you: the USPS has some very good engineers (in the true "engineer" sense of the word). None of them would call digital "a fad". Not one.

Now, to the article: "but the American citizens aren’t our customers—about 400 junk mailers are our customers." .... wrong! No postal employee will call it "junk mail". They all call it "bulk mail". I know, because I was corrected myself. :-)

"Digital is a fad"... wrong again. At one time, the USPS was the largest user of Linux; all of their mail sorting machines were running OCR on Linux boxes (they also were a huge SGI shop, with racks and racks of Octanes and O2s). Today, when mail cannot be sorted automatically, its image is sent to a remote data-entry site, where operators enter the address by hand. See the fluorescent barcode at the back? That's used to tag the mail and barcode it later, all digitally.

And finally: we, in our research lab, actually had proposed this "Outbox" style electronic mail forwarding to them back in 1998 or 1999 (the Internet was new). I don't remember the details, but there were some legal issues surrounding it that prevented it from taking off. Remember: the USPS is governed by laws (passed by Congress) that were written around the time of Ben Franklin. Fun fact: the average speed of letter sorting by hand (800 pcs/hour) was established by Ben himself, and is still the target for manual sorting.

Plus: I doubt the PMG would become personally involved in such small nonsense.

I know everyone wants to make fun of USPS; but for the price, they do a phenomenal job. People want them to compete with "the market", but don't realize that the USPS' hands are tied: they can't raise rates without approval from the Postal Rate Commission; they can't close post offices that have no customers; etc. etc. After the Civil War, when Congress wanted to give the veterans jobs, where did it send them? To the Post Office! I've heard (rumor) that even today, the USPS cannot use your discharge status against you for a job.


They drop junk at my house every day without any easy way to opt out. Do they deserve scorn? Absolutely.


Apparently, they drop bulk at your door every day. Not junk.


> I don't remember the details, but there were some legal issues surrounding it that prevented it from taking off. Remember: the USPS is governed by laws [...]

Right. Any other private company that would claim a monopoly on first-class mail would be shut down. Not the government!


I was reading with great interest until I came to the heading about "disruption" at DC. Defending "ask later" practices is neither disruptive in the proper sense, nor particularly ethical.

The reporting here attempts to paint a picture of a slow, outdated USPS (and they surely are, to some extent) by way of obviously false comments ("digital is a fad"? Really? I'm supposed to believe someone at the USPS actually said this, in context? Let's critique the USPS, but let's not fabricate silly positions.)

Too bad, really, it sounds like a great idea and excellent technology, but marred by a shameful ideology.


There was so much praise thrown at "disruption" in this article I could barly finish it. I'm not going to make some statement about "news writers" in general, but I'm suprised that this one latched onto such a transparently gross talking-point. It's public face is delivering end users better interactions with the world around them, typcially through technology. An obviously laudable goal, but one that doesn't require disruption nor does disruption neccisarily provide.


  "digital is a fad"? Really? I'm supposed to believe 
  someone at the USPS actually said this, in context?
I agree it's unbelievably that anyone would say digital is a fad, but digitisation of physical postal mail might be a fad; it'll last as a market only as long as recipients want their letters digitally, but senders insist on sending physical mail.

Haven't all the senders caught up already? All my bills etc are electronic these days, and very few people send letters in the age of e-mail. Amazon purchases I don't want digitised. Maybe christmas and birthday cards?


This sounds much more likely, and would as you say, be a completely accurate statement.

Mail that can be digitized will eventually be digitized by its senders, whereas stuff that can't, well, that isn't changing.

I know in Australia the bulk of the mail I receive these days is ebay orders from overseas - my bills are digital, my statements are digital. The physical things that go in regular envelopes tend are stuff like new credit cards or registered mail like my passport of things.

So yeah, it does seem like an implicitly shrinking space.


What's strange is, USPS actually seems to be aware of such services and perhaps endorses them. When I signed up for Virtual Post Mail, and proceeded to setup a mail forward on the USPS website, I got this message:

> Our records indicate that this address is a commercial mail receiving agency (CMRA). If you are forwarding your mail to a CMRA, please enter your private mailbox number (PMB) below.

So what did Outbox do to upset USPS?

Becuase what I fear is that my mail scanning service will suffer the same fate as Outbox, and suddenly leave me without a way to get mail. I don't live in the US anymore, but I'm still a citizen, I still pay taxes, and I still own property there. Without mail scanning there is no feasible way for someone in my position to receive my mail. How is the water company going to let me know that my bill is past due? How is the city going to let me know that my property taxes have changed? This isn't just a nuissance, this makes it impossible for me to do business in my own country.


"So what did Outbox do to upset USPS?"

Adopted a "laws are for other people" business model.


You have a contract with a third party to receive your mail. I don't think they care about that.

Sounds like Outbox wanted to divert mail being delivered to one physical address to another for individuals.


I don't think that the point at which the mail is diverted is the issue here.

The article leads me to believe that the USPS took issue with mass-unsubscribing from junk-mail, not with having mail diverted before reaching the addressee.


The article was written from the POV of the guy who blew through alot of investor money on an idea that wasn't really thought through.

The USPS has a legal obligation to provide universal service to every physical address. They unsuccessfully tried to hack around it, while ignoring the multitude of solutions available to do so in a real (but perhaps inconvenient to them) way.


I may be being too naive, but what's to stop a startup like outbox from opening up a digital version of Mailboxes Etc?

Instead of forwarding mail from current addresses or physically picking up mail from peoples' mailboxes, they'd get a new address managed by the digitization service.


I was thinking the same thing as I read the article, they MUST have had that idea, right? There must have been something preventing that model from working, why else would they try something as insane as "undelivering" mail.


It's just like a PO box. You can use it for most casual things but the hassles aren't worth it for services that require proof of physical address like driver's license, bank accounts, mortgages etc. Also using non-physical address for personal transactions raises your fraud score. E.g. your credit card goes to a PO and you ask vendors to ship to your physical address that may not even be in the same zip code or city.

The true benefit of a service like Outbox is that I don't miss important paperwork like auto registration and home insurance renewals. But the more important the service, the more stringent the requirements of proving you live at the physical address on file. I own a rental property and it is a pain to make sure all the bills and paperwork related to the property come to my primary residence. Yet I keep finding mail from different companies going to the rental address even though I have set the Billing / Contact address to my primary residence. Companies just do a "SELECT address, city, state, zip" when doing a mail merge, which usually brings up the physical address instead of the billing / contact address.


Earth Class Mail does this. They offer real street addresses as opposed to "PO boxes", so you don't run into a lot of the issues you are describing. The only thing that occasionally is a problem (but like, once in a blue moon, and usually related to buying a new iPhone) is the issue with "having a physical good sent to an address other than my billing address". However, while I've usually been able to just temporarily change my upstream AT&T address for just the day to make my order, ECM also solves this problem: you can have physical packages delivered to your ECM street address and then have the product forwarded or even go pick it up in person the same day (I live two hours away from ECM, so I'm unlikely to do this often, but I technically can in a pinch).

I have my ECM address on my drivers license (I didn't even ask the DMV to do this for me: I simply listed ECM as my mailing address, and that's the address that their policy puts on the card; I verified with them afterwards there was no mistake or misunderstanding), and have had no issues with moving my bank accounts and credit cards to my ECM service. The only people who know my physical address are utilities (though my bills actually do get sent correctly to ECM), health insurance (as the pricing is dependent on your location), and the US government (voting registration and DMV filing, though neither ever sends mail to anything but ECM).

That all said, your specific use case is somewhat different: you need the utilities to also send you bills, and they are some of the few people who actually care about having your physical address. But it isn't like Outbox could really solve this in a sane way for you either... that would involve them going through the mail of the people who are renting from you, only once every three days (so assuming your renters didn't reap the mail first), and pulling just the mail being delivered to "you" as opposed to them. If I were renting from you I'd frankly find that kind of sketch. For what misterbwong and forgottenpass are talking about, however: ECM is specifically the service they are looking for ;P.


Sure, there are hassles with using a PO box, I've had one 8 of the last 10 years. I think you're overestimating the hurdle they pose in day to day life and to the service Outbox could provide.

I occasionally have to use my physical address, but since my most recent move haven't had provided proof of my current address to anybody nor received a single piece of post there. The one item I could use to prove my address has left my safe deposit box exactly once in all 16 months, but the DMV was OK with a PO Box on my drivers license and didn't scan the lease (like they did when I used my old place as the address).

It would be a limitation to the services that Outbox could provide with a PO Box system but practically speaking the vast majority of mail for the vast majority of users is a very good start. Just because the USPS isn't handing you your ideal business model on a silver platter, that's not a reason to give up is it?


The goal is to have all mail which the USPS would deliver to your address redirected. This includes advertisements. Upstream forwarding still results in the USPS putting junk into your local mailbox.


Can you not opt-out of it?

In Australia a simple "No Junk Mail" sign on the mailbox makes it illegal to deliver junk mail. Mail that has gone through Australia Post that is individually addressed is legal (however now must include a way of opting out).

I imagine it might be a little different however seeing as most of the junk mail here is delivered by 15 year olds walking the block as opposed to the postal service.


It already exists?


http://thinkprogress.org/economy/2011/09/28/330524/postal-no...

There's a reason why the post office is going broke, and it's not necessarily bungling on their part. Blame Congress for this one.

I'm kind of shocked with how stark the PMG was though.


I really doubt that these chaps talk to the PMG. He has a lot bigger fish to fry than talk to 2 tech dweebs.


If someone wants a service like this, in my opinion Earth Class Mail is a better alternative. They are not in any way "hip" or "web 2.0" and they would never in a million years talk about "disrupting" some established legal regime: but frankly, I'm not just "ok" with that, that makes me ecstatic. I thereby see this "how the post office killed digital mail", a dream I've been successfully living now for years through one of their "less disruptive" competitors, and can do nothing but laugh.

Instead, Earth Class Mail is a service that has been in business since 2006 and they operate within the existing legal framework of mail: they are effectively the kind of service that is required to live in an RV, where a third-party receives your mail on your behalf. To make this work, you sign forms from the post office that you send to Earth Class Mail, which are then kept on file to demonstrate they can legally open your mail. Maybe Outbox used the same process, maybe they didn't, but this article made it sound like Outbox is responsible for this legal framework: wrong, the ability to assign "open my mail" rights has existed for a long time.

Rather than having to have cars driving around attempting to "undeliver" your mail with some ludicrous three-day delay as Outbox did (at extreme cost to the service that calls into question whether their business model would even succeed, a fact mentioned in this article linked today, and limiting them to only even being able to think about operating in high-density regions of the country), you simply have your mail delivered to them. You can initially set this up with your local post office as you work on "moving" to ECM, and you can even do it temporarily if you just want to try it out (the post office will happily forward mail for as little as 15 days: again, this is a use case they actively support).

But frankly it is so amazingly relaxing once you "commit" and outsource your physical address. I have a lot of friends that move every couple years, and the idea that they have to change their address at the same time is silly: that is the most stressful moment to be trying to move mail delivery and you can't usually overlap the old and new addresses to buffer mistakes. In the most extreme situations, people who are traveling a lot (for whatever reason; maybe they have a job that requires them to be in random locations for weeks on end a lot, or maybe they are just kind of nomadic and stay with friends a lot as they travel the country) will tell you to send things to their current location. Outbox sort of helped with this, but the three-day delay sounded really irritating: ECM just solves this problem outright; you don't even need a real physical address at all.

Indeed, I seriously have now switched to using my Earth Class Mail address for everything: my drivers license even has that address on it (and yes, I verified with the people at the California DMV that there was no issue with this, and they technically do have my physical address on file; but their policy is to print the mailing address of the driver on the card), which makes it really easy for me to never get into an argument with anyone about what my address is: I effectively now live at Earth Class Mail in Los Angeles. The only people who know my real address are the US government (DMV and voting registration, though they happily send my voting materials to ECM), the power/cable/phone services to my apartment (again, bills go to ECM), and my health insurance company (they base pricing on where you physically reside).

They offer multiple locations around the country, so you can get an address vaguely near you or opt for one that "looks good" for your purpose (maybe you want your startup to look like it has an office in San Francisco, for example). With some of the addresses they are legitimate "street addresses" that can receive packages on your behalf, and you can either have the package forwarded to you or you can go pick it up from them if you need it now and live near enough to the location. (Though, with packages, I normally just one-off deliver those to my apartment.) (I wonder if you can have them open the package and take a picture of the contents... I never asked ;P.)


Do you have any financial accounts (such as Fidelity in the US) set up using this address? How do you handle situations when their "compliance" department says "we have flagged your address as being a mailbox-type-service" and demand a physical address? Do you just give your physical address instead?


I use my VirtualPostMail address for just about everything (except the DMV, homeowners/auto insurance, and voter registration) and haven't had any problems so far. Now that I think about it, my health insurance doesn't know my real address. I should probably fix that...

It does help that my virtual address is in the same state as my real address, so things that depend on states work correctly. Without that, I'd probably have to give my real address to more places and encounter more confusion.

The most annoying thing in general is having to fill in separate billing and shipping addresses whenever I buy something online, because of course my billing address is the virtual address. I've had a couple of stores require a phone call to complete an order with separate billing/shipping addresses.


As this has not (yet?) happened to me, I cannot really tell you how I handle the situation: I presume I would give them a physical address instead and keep them as one of the few people who know where I live. As it stands, my health insurance provider knows where I live because they truly care (premiums are different in different locations). I believe I remember my bank actually putting my ECM address down as my physical residence because that was the address on my drivers license.

To be clear: I have no issue telling people my physical address; I'm not trying to hide from people ;P. I just don't want to have to think about updating addresses ever, and I really don't want to receive mail at my physical address. Most providers that do ask for physical addresses also ask for a mailing address, and almost no one mails to the wrong address. I don't mind having my physical address with my bank, as long as they aren't sending me critical mail here.

In fact, I think about physical mail so infrequently I seriously just don't check it at this point. It seriously just occurred to me that I haven't checked my physical mail in a very long time (well over a month). Let's go check it! ;P (I actually got a little concerned that I'd fail to find my mail key, but thankfully I found it without issue.) BTW: I'm pretty certain my local mail carrier hates bulk mail so much that he just refuses to deliver it to my address now.

    1 piece of mail for someone who doesn't live here
    3 cable service bills (autobilled, waste of paper)
    2 heath insurance bills (I pay these online already)
    1 power bill (keep forgetting to autobill... :()
    1 rental insurance bill (I guess, didn't open it)
    2 lawyer bills (they also e-mail these: *sigh*)
    1 notice from AT&T of their new privacy policy
So far, none of this is mail that I care about: in fact, most of it is mail I wish I could "paperless". I can check these a few times a year and it wouldn't cause me a problem, and it is difficult or impossible for me to not tell them when I move anyway (utilities, insurance, lawyer). No financial data goes to my apartment: as I had said before, I don't even think my bank has my physical address on file anymore, but even if they did I long-ago set them to paperless for my personal banking statements so it doesn't matter.

I also received:

Google Wallet card -- I asked them to send this to me a few days ago, gave them my apartment address as I wanted to get it sooner. I did guess it would arrive in an envelope like this, but it could also have arrived in a package. I also only ordered it "for fun" and so promptly forgot it would arrive here: receiving this in another few months would not be an issue.

Trademark Scams -- I have some things that are trademarked; occasionally, I get official-looking mail that tries to convince me to pay large quantities of money to random companies to "complete" or "secure" my trademark. In this case, I received two messages requesting EUR 970 to get listed in the database ipts-register.com. Fine print: "The registration on our database has not any connection with an official government organization."

So yeah: I don't use physical mail anymore :/.


I've been using a similar service (at USABox.com) since 2006 or so; I forward the US mail I haven't discarded to France when I need it, usually once every couple of months. This was the cheapest option for what I wanted to do, when I chose them... there were already several other options at the time.

No problems with the post office or anyone else.

I admit I don't understand why Outbox didn't fall back to this model rather than shutting down (though obviously it's more of a hassle for customers switching all mail to them); though admittedly they would have competitors.


I also use a service like this on all my bank accounts (4 different bank accounts in the US), companies etc. I do not hide the fact that it is a post box with the bank, I just tell them this fact, so I don't see any issue with this. All the mail is scanned and then forwarded to another location or trashed, whatever I prefer.

I think receiving physical mail is insane.

I do all of this for my US businesses, and it's essential to do it this way as I don't live in the US so I would never be there to collect the mail in any case!

In any case there are lots of alternatives to outbox!


I've been using an ECM competitor[1] for about 3 years and, like saurik, I've not run into this problem with either my banks or the IRS. The USPS does provide that data, but to my knowledge it doesn't come as part of the standard address verification APIs.

1. http://www.virtualpostmail.com


This sounds exactly like what Outbox was described as doing in the article until USPS shut them down. Is there some difference I'm missing? Otherwise Earth Class Mail seems equally vulnerable to being shut down if they become too popular.


ECM gives you a separate mailing address while Outbox picked up/rerouted your mail from your existing address.


I wonder why Outbox didn't go this route?

If USPS declined to honour re-routing rules to Outbox, then why not just give customers an 'address' at an Outbox depot? USPS would have no choice but to deliver to Outbox (with no other address available), and it would also cut down on spam which isn't directly addressed to the customer.

Seems like a much more sensible solution than 'undelivering' mail.


The article states that they initially tried to do this with mail forwarding contracts, but those really aren't designed for this kind of use case (more on this in another one of my comments[1]). To accept mail on behalf of someone else requires a much more complex signup process: you have to get a special form from the postoffice signed in the presence of a notary public and then send that in physical copies to various parties; to get mail forwarded is much simpler. Earth Class Mail tries to help you with this, but as a happy user I honestly had kept putting off signing up due to it: I imagine these services could easily have many more customers if they didn't need such a "hard" form.

[1] https://news.ycombinator.com/item?id=7668877

I imagine, then, that it primarily comes down to this attempt to minimize the perceived pain of the signup process: specifically, the idea that you have to move all of your mail senders to a new address is really off-putting to potential customers; it is effectively like moving from your current home "to" the other provider. I was myself a little against doing this at first, and in fact only came around when I finally physically moved to a new apartment and realized "omg, this is so annoying, and I am not even certain I like my new place, so maybe I'll move again in a few years... I'm going to do this once to ECM instead and maybe then I won't have to do this for another decade".

At that point you first look at mail forwarding, and then fall back to "undeliver" while you attempt to argue people into submission that mail forwarding should let you do what you want, or try to get the government to pay you to replace their existing service with yours ;P. But to try to say "our service is so easy: all you do is contact anyone who ever sends you mail, and have them all send mail to us instead! then, if you ever get tired of paying us to receive your mail, you get to do this all over again!" is a really difficult sell, especially for a "hip" "web 2.0" company. I almost want to say they had no other option but the path they took (and no other option than the resulting failure).


To be even more explicit than tlrobinson's answer, they were trying to do long-term forwarding contracts before "falling back" to the painful "undeliver" model. The issue is that the USPS forwarding services are only meant to be used temporarily: they involve a cost to the USPS, and the longest contract you normally can obtain caps out at one year; by default I think you only get six months, in fact. They are really designed for two use cases: "I've moved permanently, but need some time to change all of my upstream addresses" and "I'm temporarily stationed at a different location, but will be back at my house within a month or two". ECM doesn't rely on the USPS in this fashion: your mail is delivered directly to them. I thereby would not be at all worried about the USPS getting angry at them: this article had simply not really highlighted the true point of contention involved.

What's really silly, frankly, about Outbox is that they clearly didn't do any due diligence before trying to start that company: somewhere around 2007/2008 is when I was first interested in getting a service like this for my mail. At the time, I thought "hey, maybe I could just forward my mail to this service". I saw you could forward mail, but it seemed like it was for temporary use. My response was not "well, let's see how long I can get away with this": I called the USPS, and within the hour of talking to various people, I was forwarded to the office of the Postmaster General. Now, I didn't talk to "the man himself", but I talked to one of his assistants. I seriously think I started this call path using 1-800-ASK-USPS, the phone number my friends and I would tell jokes to each other about how awesome it would be if the USPS were willing to answer entirely random questions ;P.

I explained my use case, and they explained to me that they were not able to offer this service for me, told me the reasons they did offer forwarding, explained why my use case did not fall into this, and was willing to brainstorm with me other options. I actually remember them suggesting hiring a personal assistant to undeliver my mail ;P. In the end, I finally decided (though I didn't get around to it for a long time later) to just "commit" and move all of my mail to ECM and forsake my address: frankly, this was the better option for me. I can see how this creates "market friction", though, for a service that is trying to "convert everyone" like Outbox. I thereby understand why a "hip" "web 2.0" company is instead going to look for something really really easy, like doing the mail forwarding path. What I don't understand is the "disruptive" attitude, however, towards getting what you want.

In this case, rather than call the USPS like I did as a mere user in 2008, they seemed to have just started signing up customers with mail forwarding for their new business idea. Well, that kind of sucks: the USPS doesn't want to offer that service. Now, some might think "those meanies don't want to do this" and paint a picture of corruption and bribery, implicating services like bulk mail as the cause of the problem, but if we try to think from the USPS's perspective for a moment: they are designed around this goal of moving mail to the address on the envelope... 99.99999% of their customers need that service, not a service that uses addresses as routing codes to redirect mail to some company. Their mail forwarding infrastructure is thereby expensive to use and maintain: why should Outbox get to use that service for free to make their business easier to operate?

So, yeah: I don't think anyone is concerned about the service ECM is offering. They seem to be offering a service that has been supported in some fashion for many decades now (again, it is reasonably equivalent to services that collected mail for people who lived in RVs, traveling the country without any kind of fixed or firm address), they aren't adding cost to the USPS in the way Outbox was, and they don't seem to have ever "made an enemy of the USPS" as Outbox seemed to consider core to their mission statement. I mean, even in their dying throws, they seem to feel like a Derek Khanna hatchet job against the Postmaster General is an appropriate next step... I will claim that this is a kind of "disruptive" attitude that makes it very difficult to actually "disrupt" anything ;P maybe there was some way to work with the USPS, maybe involving paying the USPS (as opposed to licensing stuff to the USPS, as if it had inherent value) would have worked for them? It sounds like they didn't even really try to go in that direction :/.


This sums it up well. Outbox clearly didn't do their due diligence and seemed to just hope for the best without thinking through the logical implications of how the one entity they depended on would react.

I think this poorly-written hack job article is also a nice cover for a failed business model.

And just to drive home the point, here's a comment I made a year ago about the (un-) feasibility of their business model:

https://news.ycombinator.com/item?id=5822869

Now it's true that these economics came after the Post Office "forced them" to do house-to-house "undelivery", but failing to anticipate these contingencies is simply a lack of adequate planning.


I think the founder thought his White House connections would take care of everything. Live by the bureaucracy, die by the bureaucracy.


As a business, it's pretty easy to have your mail (and packages) delivered to a "private post office" but that becomes your official mailing address and you notify the senders that you've had an address change.


This. Earth Class Mail is an amazing service. It has none of the disruptiveness, but is simply useful and "just works".

There was a show pilot on them on Mojo TV (now defunct?) - http://www.mojohd.com/mojoseries/startupjunkies/about.jsf


As a fellow Earth Class Mail customer, really glad to see this. I, for one, am afraid that they'll one day shut down because they're not "hip" enough or are not "growth hacking."

But I sure hope not. They provide a very reliable service for me while I'm spending the years travelling abroad.

FWIW, the trick to how their service works legally is USPS Form 1583 ("Application for Delivery of Mail Through Agent".) This means that you still technically need another address for USPS itself to know as your "real" address, even if mail actually gets delivered to ECM or another service. To be clear, no mail forwarding takes place, my mail goes directly to ECM.


having seen the price increases as a user over the past four years, I can't imagine them shutting down for any reason. they should be sleeping on a bed of cash (I hope)


Sounds like a great service, and I really want something like this. But I'm not on the road for long enough stretches for it to make sense. It's basically twice as expensive as my PO box just to throw everything away, and $1.50 a pop to scan doesn't work considering the amount of things I get and don't mind scanning while watching TV.


ECM is not the only player in this space; someone else here (HN user spacehome) was evaluating a service called Mailbox Forwarding (started in 2010, still years before Outbox) that has lower pricing that maybe you would find a better price-to-value?

http://www.mailboxforwarding.com/pricing.php


I've had a good experience with Virtual Post Mail ( http://virtualpostmail.com/ ) - And they have a $10/month plan with 5 free scans and $1 each after that.


I'm in the market for one of these services, but Earth Class Mail seems rather pricey. If you don't mind me asking, why did you pick Earth Class Mail over cheaper providers like Mailbox Forwarding (mailboxforwarding.com)?


I use ECM because they will automatically deposit received checks into your bank account.

For consultants/contractors/freelancers, this is heaven. We can be away from home for weeks on end, and we don't have to worry about when client checks come in.


Primarily, Mailbox Forwarding did not exist when I was first looking into this kind of service; and when I got serious and finally decided to move to such a service, Mailbox Forwarding had only just launched, so I probably would not have considered them (the last thing I need is to switch to a service just to have them go out of business a year later).

That said, I decided to take the time just now to evaluate this service vs ECM. To start with, ECM feels like a more "established" option, having existed for just over twice as long; it also has many more locations, and the fact that it is more expensive is reassuring to me: they have managed to operate this business at a higher margin shows solidity.

On features, I use ECM for both my personal mail and for my business; with business mail I have multiple recipients (as mail might come to one of my business partners at the company's address), and we all have separate logins to view mail. (In practice, though, we don't really ever use these features, and I'm the only person who checks the mail.)

ECM is definitely more expensive than Mailbox Forwarding, though: to get the exact service I want (which involves a street address in Los Angeles) I'd need to pay $30/mo with Mailbox Forwarding and $50/mo with ECM. But frankly, $20/mo is not the kind of difference I am going to spend time optimizing: that's like one day of one server on Amazon EC2.

I then have to wonder "is there some difference in how they run their business that helps account for the price difference", and in fact Earth Class Mail offers tech support with live people, both over the phone and in person. If you have an issue with Mailbox Forwarding you must use an online ticket system, and then get an answer a couple days later.

https://www.earthclassmail.com/Contact

http://www.mailboxforwarding.com/support/knowledgebase.php?a...

FWIW, I am really not trying to say to anyone "ECM is the best competitor in this space", just "ECM is a much better option than Outbox ever seemed to be". When I first saw Outbox I was surprised anyone paid any attention to it at all: it wasn't a drastically new idea, and there were tons of competitors that seemed to be working off a better model.

Even now I'm somewhat surprised: people are responding to this article here on HN talking about how they are confused as to why Outbox didn't just offer an address to which people could deliver, and expect that there must be some reason they didn't do that as otherwise it seems obvious... well, that's what other companies were doing for a long time before? ;P


How well does this work for packages?

Especially in the case when I ask for something to be shipped via UPS, and they "outsource" is to the USPS for the last part of the delivery?


If you get a real street address from ECM AFAIK it doesn't matter. "Street addresses generally accept items from all carriers. PO Boxes accept items from the USPS only. Check our address page for details." "If you plan to receive mail or parcels from carriers other than USPS, be sure to choose from our addresses that accept all carriers."


Um, the existing industry doesnt use "disruption" negatively because they "don't speak the same language." Theyuse it negatively because you are talking quite literally about disrupting their business and probably putting them out of it.

Not talking about outbox and usps specifically so much as the fetishization of "disruption" the OP author buys into without question, as if the only reason to be scared of "disruptio " is a cultural misunderstanding, you're not with the program. Rather, quite obviously its bad for some existing business interests -- but also it's certainly possible to challenge the religious belief that disruptionof markets always leads to better outcomes for consumers or society as a whole.


No at this point it's used negatively because the silicon valley startup crowd have been using the word constantly for the past 10 years now, in reference to every conceivable sector of industry, which, as this article perfectly highlights, they frequently don't understand in the slightest.


They didn't think about the corner cases that are part of mail. What do you do with Certified Mail? Registered Mail?

Different classes of mail have different security and other business requirements, and involving some random "disruptive" third party has many potential consequences.

I'm not sure that I understand why this was necessary for the company anyway. I subscribed to a service in 1999 that did this -- you had bills sent to a PO Box and they would scan/PDF everything for you (even ship copies on CD-ROM). They would also pay your bills for you if desired.


"Maintaining a fleet of vehicles to go to every person’s house every day was costing them a fortune"

Funny, that's just what the USPS is constitutionally mandated to do (Article I, Section 8, Clause 7).


No, the USPS is not constitutionally mandated to deliver to your house.

The Post Office Department did not begin delivering mail to city addresses until 1863. Rural Free Delivery did not begin until 1893.

Before free delivery, you went to the Post Office yourself and asked for your mail. ("Caller service" or "General delivery", both of which still exist.)

Since the 1970s, the Postal Service has been delivering to clusterboxes. Grandfathered areas get to keep their individual mailboxes, but new greenfield development must be built with clusterboxes.

If mail volume keeps decreasing, we'll see greater contraction in free delivery. It all depends on how the politics go.


Mandated?

"The Congress shall have Power To . . . establish Post Offices and Post Roads"

The constitution permits congress to establish post offices and post roads, but it certainly does not mandate it.


You do wonder why post offices - everywhere - not just in the US - have not done something with electronic delivery.

If I was Postmaster General I would like to see a post office ISP that only accepted mail from government departments, local authorities, banks, hospitals, doctors, schools and other agencies. From there people could setup a forwarding address - if people wanted to just check their mail from one account, e.g. gmail, they could have the 'important stuff' rolled into it. Or they could setup POP/IMAP.

There could also be a webmail where you would be able to have highest accessibility standards. Clearly the cryptography would have to be in place so only the sender and the recipient could read the mail - a 'virtual envelope'. Naturally there would be tracking tags so they knew if someone had read that 'final demand'.

As a competitive service for banks etc. wanting to send out statements it could work very nicely. Good for trees, too.


The Swedish post does it. They already have a "companies electronically send us a PDF and we print, envelope and mail it to end customers" service, so the idea is that instead of printing it they can just forward it on to your electronic postbox. Not many agencies/companies have signed up to use it (only about 100-200 from the looks of it), so it's still pretty useless to me. http://www.posten.se/sv/Privat/epostboxen/Sidor/home.aspx

There's a separate one run by the Swedish IRS, and I've gotten a few letters from them to it http://minameddelanden.se

There's also a private service, but it also suffers from poor support - I think I've only gotten mail from a credit reporting agency there https://www.kivra.com


Congress prevented it.

The Post Office tried to become a sort of "digital hub" for rural areas (bill paying, faxing, etc.). That got quashed.

Congress is not interested in a good Post Office. Quite the contrary. They want the Post Office to go bankrupt so that they can get their hands on all of the really expensive real estate it is sitting on.


Why not just start with "virtual" PO boxes? Instead of addressing letters to a physical mailbox, people who want to send me mail should address them to some unique identifier that means me the person.

I would then go and tell the post office what address that identifier maps to, and I would never have to worry about forwarding mail when I move or updating my address whenever I buy something. You need the post office involved here so you don't end up shipping packages twice, like with traditional forwarding services.

Once you have THAT infrastructure, creating a service to digitize mail becomes much simpler - whether done by the post office or third parties.


Canada has epost which is a crypto vault to hold bank or gov mail you can give other people access . Nobody here proposed the scheme of this article's opening of all mail though, that's illegal to do without a warrant due to hundreds year old laws. A nice reminder that once upon a time our ancestors rejected state surveillance.


I've seen several people mention Earth Class mail as a working alternative here. I am not sure if even their lowest monthly charge would provide enough value to be worth it for my own use case, but I do have a few questions regarding it for their users..

Do you still have a mailbox at your home? If so, do you still check it regularly? If so, do you still receive bulk mail drops from postal carriers in that mailbox? I'm talking about the ones that typically are addressed to "Current Resident" and such.

Unless you are in a position that you can confidently forgo ever checking that mailbox again, it seems that you would still be receiving those and be forced to deal with them. That would take a lot of the potential out of the service for me.


Can't Outbox just provide me with a c/o address, and I can update my address with anyone who intends to send me mail?


These guys are doing the classic startup shuffle--pick off the profitable people and leave the some chump (aka the government) with the unprofitable ones.

Although, I'm a bit skeptical that they couldn't "undeliver" mail profitably in a city-density area like Austin. Focusing just on businesses and apartment complexes, $640/mo + mileage gets you a person twice a week, for 8 hours a day, at $10 an hour. At $5 per month per subscriber you need to collect about 150 subscribers per month to make your nut.

Really? They couldn't get 150 subscribers serviced by 1 person over 8 hours? Sounds like they didn't control their rollout density or price correctly.

This sounds more like "Waaaaaah, we're only going to be a $20 million company rather than a $2 billion company. I'm going to have to hang my head in shame at the next Skull-and-Bones barbeque. We should shut down."


>the American citizens aren’t our customers—about 400 junk mailers are our customer

Yup, I used to work for one of the country's largest mailers, doing direct mail strategy. Outbox, if it became widespread, would have killed this marketing channel.


This makes no sense. They could have circumvented this by having customers give out their addresses as: Joe Schmo c/o Outbox PO Box whatever Closest Outbox Facility, CA 90210

Sounds like some details are missing here.


I haven't received physical mail where I live in 15 years. I have all my paper bills sent to paytrust, who scans them, and then pays them per automated rules (or allows me to manually approve.) Physical Mail just goes to 650 Castro Street in Mountain View, where I get a re-mail once a month wherever I am in the world.

I lived in an apartment for about 18 months, but never asked for a key to my mailbox as there really was no reason for me to open it.

The only packages I ever need to receive at my place of residence are via FedEx/UPS.


I hate to be that guy but if you popup a dialog as soon as I visit a site, I immediately click the back button.


Fuck the USPS.

Seriously.

Its been obvious for at least a decade that the customers are direct mail advertisers and we're the product and we can't really opt out (I've signed up for a several opt-out services and I still get junk mail).


Seinfeld covered this scenario over a decade ago, complete with visit from Postmaster General: http://youtu.be/JpUqLjjKk4Y?t=3m20s


Can anyone vouch for any similar services in Europe (specifically in the UK)?

I change address fairly regularly, as a student, and it'd be great if I could cut out paper mail entirely.


This is one of the most disingenuous articles I've read in a while. I expected something a bit more subtle from a Yale alumnus.

They believed that their technology could actually save the Post Office money. If consumers started to opt-in to Outbox, or other services like Outbox, then the Post Office could receive the full benefits of the stamped envelope but never have to deliver those packages, which is one of the biggest costs for the Post Office. In fact, if properly implemented, when a customer sends a letter from Austin, TX to Alaska, if the Post Office knew that they weren’t going to receive the letter anyway, then the Post Office could forward the letter from Austin directly to Outbox, and never have to ship the letter across the continent.

This, for example, is just laughably wrong. Marginal cost isn't the bugbear of the USPS; universal service obligations are. As long as there's one person in Alaska who doesn't want to sign up for digital mail (possibly because they can't reliably connect to it in Alaska), then the USPS has to fly planes or sail boats up there to deliver the mail anyway. And as Outbox themselves discovered, moving mail around for individual customers is hideously expensive. It can be made efficient in cities where there is sufficient population density, but something like 1/3 of US addresses are on rural routes and of course delivery to those is more expensive. Even if half the customers on rural routes sign up for a service like Outbox, there's no promise that they'll be the ones farthest away from sorting offices, so mail carriers will need to travel more or less the same routes even if they are serving a lower number of customers, plus all customers will want packages delivered because packages have physical rather than purely informational content. Unfortunately, the profit margin on Package elivery is only about 1/3 that of first class mail delivery, which continues to decline in volume at about the same rate that demand for package delivery increases, leaving the USPS in a now-in situation which requires it to balance the books through cuts rather than investment and growth for the foreseeable future: http://about.usps.com/strategic-planning/five-year-business-...

I loathe junk mail with a passion and it really irritates me that I have no way to opt out from it, that the USPS is required to inefficiently front-load all its fiscal obligations as if they were payable tomorrow, and a whole bunch of other things. But by ignoring the legal operating constraints imposed by Congress on the USPS and the resulting necessity of dealing with bulk mailers, the author is doing his readers a huge disservice by offering trite solutions to knotty problems, essentially arguing that the USPS should pick up the costs of mail forwarding on behalf of a service which reduces the utility (and thus revenue) of the USPS's largest income stream (bulk delivery).

In 2014 Derek was selected for Forbes' top 30 under 30 list for law and policy and as a 2014 Global Leader of Tomorrow, for thought leadership and activism on NSA surveillance and innovation policy.

I'm pretty sure that if the USPS had been offering to open, scan, digitally archive, and destroy your physical mail for the last decade as Derek says they should have been, he'd be writing a similarly indignant rant about big government overreach and the crowding out of private competitors, regardless of assurances about strict siloing or privacy controls.


What a WASTE.


Don't Ever Antagonize The Horn


Did these guys really think a government monopoly that has operated the same way for over 200 years was going to change their procedures to accommodate their startup idea?


I was able to get a package sent across the country in three days, delivered to someone's door, and watch its progress online for $5.60 in 1814?


Well, it would take 3 months and your would get your progress by telegraph, but otherwise, yes.


This is such bull. How could any postal service in good conscience (or legally for that matter) co-operate with a service which consists of opening other people's mail?

Any postal service should deliver mail to the addressee, unopened and unchanged. Any deals that put that mail in the hands of third parties should be a no-go to start with.

And they also shouldn't be offering this themselves. Closed envelopes stay closed. If that means postal services are not profitable, so be it. That was never the reason they existed in the first place.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: