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.