Higher prices and worse service

It doesn’t surprise me, even if I wasn’t feeling it on my own wallet. A study of price vs. service in the past 10 years of various Danish monopolies that we have to deal with daily has shown yet again that monopolies do not work.

The study shows that postage, train and airport prices have gone through the roof in the past 10 years. The trains have gone up in price by 60% while the amount of trains arriving on time have gone from 92% to 84% in that same period.

Stig Elling director of Star Tours a charter travel agency says the same about Copenhagen Airport. The prices have soared beyond inflation and the service is worse than ever. Long lines and poor baggage handling is the result.

The postal service, which like in many other countries is also a monopoly has seen price increases of about 4,4% annually in according to permitted rates by the government. The managing director of Post Danmark says:

The reason for the increase is that our costs are rising. We are bound by a regulatory system with regards to price that we have to keep below. Which we do. We have taken the price increases permitted as it has been our view that it was necessary for our business.

When asked about their $170 million profit this year, he says that is a good thing to weather problems in the future.

The state railways had a profit of $208 million and the airport $145 million. Now I am all in favor for profits, but if you have a monopoly enforced by law then I’m not so sure. It’s of course best to drop the monopolies all together. But maybe these are the future problems are good Postal director is thinking of. Better to draw blood now while the pig can’t leave and go to the other farm.