Chocolate and Gold Coins

Friday, December 02, 2005

Queues and the Government

In the previous post, I talked about the long queue for a visa. But it isn’t just the Indian Consulate that makes people wait in a long queue. Basically queues are a common feature of many government agencies that serve customers. But in the private sector, there is seldom any queue. It is curious that there is a completely different perspective of what constitutes an efficient queue in government and in the private sector, and this explains why your trip to a government agency can often be an ordeal.

Actually the worst queue I have been in over the last couple of years (I cannot really remember before that) is the one at the Department of Motor Vehicles here in Virginia. The wait time can easily stretch for three hours.

In the private sector, companies have to compete so they figure out something very quickly: customer wait time costs you a customer. If customers have a choice, they will not wait, or they will pay quite a bit to avoid a wait. So if the wages of the server are less than the value of time for customers, it doesn’t pay to make customers ever wait. If servers occasionally wait for customers, this is acceptable; you can have them do something in the meantime. Even if the value of wait time for a customer is about the same as the server’s wages, it makes little sense to allow the queue to extend beyond a few minutes because then you can hire another server and guarantee he will keep busy.

You might see a long queue at a few private businesses, but only when it makes a little sense. For example, the queue for the roller coaster is always long but I believe that it helps build anticipation plus if the unfortunate father had to ride the roller coaster ten times in an hour, he would never ever come back to the amusement park. And parks are getting smarter about avoiding queues and allowing customers to wait in ways that allow them to shop around and do other fun activities.

The government thinks about a queue in a different way. They don’t worry about losing customers. They do worry about explicit costs like the wages of employees. If the government accountants see that the cost per customer served goes up, that agency will get dinged. So the government learns that to be “efficient” and to keep costs down, they need to make certain all of their servers are perpetually busy. This means that the customer always waits.

Obviously, the government is forgetting something here: the opportunity cost of customer wait time. Most customers, if given a choice, would gladly pay to avoid a long wait. I would have paid at least $50, maybe $100 to avoid the long queue at the Indian Consulate. This cost never enters into the government accountants’ calculations. It could easily double or triple the cost of a government service, (actually the visa was not cheap, it was $180 for the three of us, but the high cost doesn’t pay for service).

I think that government could greatly improve their operations by offering more options. There should always be a “no wait – expedite” option. Even if it costs more, some people would prefer this to waiting.

4 Comments:

  • You nailed it !

    Government lines are the worst. Last year we were standing in line for my fiancee's Social Security Card, and it took us 4 hours. The government workers were frankly pathetic. I think there is a huge chunk of population that do not possess the skills or the initiative to do any kind of work.

    For them a government job is the final chance.

    The story was the same at the DMV a couple of months later, again for her learner's permit.

    I think it has a lot to do with non accountability in government offices, especially when it has to do with customer service. It also does not help that all of the people there are hispanic or african american and they have a big chip on their shoulders, especially when dealing with other minorities.

    There should be a forum or a way that citizens can rate the service they received from a customer service rep at a govt. agency. That would get them workign for their salary !!

    By Anonymous arZan, at 11:04 AM  

  • Hi Arzan
    That is too bad that your fiancee had to wait so long. I remember my wife's green card was quite an ordeal (that was many years ago - she is now a citizen).

    By Blogger Michael Higgins, at 11:52 AM  

  • One possible reason why Govt. cannot (does not) charge to expedite the service is strong inclination to appear to treat all citizens equally. I mean, by rule, they do not want to appear to (they may but not officially( give special service to rich people!

    By Blogger Ashish Gupta, at 2:28 PM  

  • Hi Ashish
    Actually the US government does have a few services that can be expedited for a charge, and passports are one of them. You are probably right that some people might object to such a option for some silly reason or another but there really is nothing to object to. It is offered to everyone, so it is completely fair. The poor get cheap service and the rich (and the procrastinators) pay extra, what could be more fair?

    Actually, the people who would use the expedite service would not necessarily be wealthy. It would be of especially value to people who are in an emergency, like the family that left on a flight the next day and didn't have their visa. If you have paid $4000 for tickets and need to be on a flight, you would think nothing of spending another $400 to ensure you get your visas on time.

    Also, the extra money paid for the expedite service pays for extra servers. This, in effect, takes those in the expedite service out of the ordinary queue, which speeds up service for everyone.

    By Blogger Michael Higgins, at 5:53 AM  

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