Municipal Gas Station Proves Popular in Kentucky

[ksen]

It does sound great if you want to live in a city where there is basically no choice of from who you buy, or what you buy.

Why would that be the case? If the municipally run services are awful there's nothing stopping anyone from opening up a competing business with a better quality product. That's the beauty of the free market, right?

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Nope, that sounds great.

We'd still need the Chinese to make our Obama Phones.

Those guys are getting too expensive. Nepal is where it's at for slave cheap labor.

 

[jonatha]

Somerset has a very small refinery, I believe, probably locally owned.

It wouldn't surprise me in the least if this were a way to prop it up.

After all, Pulaski county can't afford a 70,000 seat football stadium...

 

[Nice Squirrel]

Why would that be the case? If the municipally run services are awful there's nothing stopping anyone from opening up a competing business with a better quality product. That's the beauty of the free market, right?

And that is how these tend to operate, if they run these things poorly the city can always divest of the service.

 

[Bronzeage]

Why would that be the case? If the municipally run services are awful there's nothing stopping anyone from opening up a competing business with a better quality product. That's the beauty of the free market, right?

I suppose that's true, except it might be difficult to compete with a corporation that had the power to grant business and occupation licenses to its competition, while at the same time had the power to seize the property of shareholders who had not made their contributions to the operating fund.

You're just fucking with now, right?

 

[ksen]

Why would that be the case? If the municipally run services are awful there's nothing stopping anyone from opening up a competing business with a better quality product. That's the beauty of the free market, right?

I suppose that's true, except it might be difficult to compete with a corporation that had the power to grant business and occupation licenses to its competition, while at the same time had the power to seize the property of shareholders who had not made their contributions to the operating fund.

You're just fucking with now, right?

No, I'm not fucking with you.

Why would the city refuse occupational licenses and such? I think if they did that they could be taken to court. I think we're just envisaging two different scenarios. You seem to think this will lead to the city basically outlawing every service or business that might compete with them. I have no reason to think that'd be the case.

Whereas I see the city providing a cheaper alternative that may actually be just as good or better than privately provided services but if they're not the private businesses are still there to use. But with the city offering competing services aggressive profit-seeking would hopefully greatly discouraged.

 

[dismal]

In my experience gasoline companies spend a tremendous amount of time and effort in setting the gasoline price. The clerk does not just hang up the number he feels like that day.

That is what I said. They don't set the price. Outside sources do.

You touch on convenience store operations, which opens up a whole new set of issues. Pricing, promotions, staffing, training, optimal facility layout. Etc.

But this place doesn't do that.

It's very hard to make money in the gas retail business without convenience store operations. They will have to burden their gasoline with a much higher level of fixed costs.

And I imagine it will be challenging to acquire gasoline at a competitive price compared to those who have a sophisticated procurement organization and significant more scale and bulk purchasing power.

Oh, and if your pricing policy is "slap a few cents onto whatever you paid for it" you're often going to find you are wildly out of the market on many occasions. And gasoline customer are quite price sensitive. It's hard to offset your largely fixed costs when you aren't selling any gasoline. Even harder without a store. On the other hand there will also be cases where your gas is so cheap you'll sell it out much faster than you anticipated and run dry. Customers don't like gas stations that run dry.

 

[dismal]

WTF people? Cities run all sorts of businesses just fine. This is what happens when you hire smart people and pay them well.

Quick - what are some examples?

 

[Nice Squirrel]

WTF people? Cities run all sorts of businesses just fine. This is what happens when you hire smart people and pay them well.

Quick - what are some examples?

Off the top of my head:
Gas stations,
General Stores
Marinas
Bookstores
Liquor Stores and Bars
Parking ramps
Restaurants
ISPs
Railroads
Hotels
Coffee houses

 

[Bronzeage]

I suppose that's true, except it might be difficult to compete with a corporation that had the power to grant business and occupation licenses to its competition, while at the same time had the power to seize the property of shareholders who had not made their contributions to the operating fund.

You're just fucking with now, right?

No, I'm not fucking with you.

Why would the city refuse occupational licenses and such? I think if they did that they could be taken to court. I think we're just envisaging two different scenarios. You seem to think this will lead to the city basically outlawing every service or business that might compete with them. I have no reason to think that'd be the case.

Whereas I see the city providing a cheaper alternative that may actually be just as good or better than privately provided services but if they're not the private businesses are still there to use. But with the city offering competing services aggressive profit-seeking would hopefully greatly discouraged.

It's easy to brush off the objections, but to do so is to believe people will suddenly do things contrary to human nature. The city might not outlaw every competing business, but they can make it burdensome to open a business. After all, the people's money has been invested in public enterprise, not to mention all the jobs at stake if a private company entered the market. There doesn't have to be any evil intent. The same results can be gained through sincerely altruistic motives.

You are proposing government become Walmart and the creation of a fascist city government. I really can't see an upside, no matter how good a job the city did.

 

[dismal]

Quick - what are some examples?

Off the top of my head:
Gas stations,
General Stores
Marinas
Bookstores
Liquor Stores and Bars
Parking ramps
Restaurants
ISPs
Railroads
Hotels
Coffee houses

I meant examples of businesses run by cities, not examples of businesses.

 

[Loren Pechtel]

As I said, it's easy to piggyback off a larger organization and lose track of the expenses. Is it a significant difference? That would depend upon anyone's definition of significant. The city can use government workers to support the gas station and the cost of their time is not put against the sales of gasoline.

The cost of their time is already in the city budget.

More work needed, more time is needed. It's *NOT* in the budget. This is the sort of thing that I was talking about in wondering if they were accounting for all the costs.

 

[dismal]

The cost of their time is already in the city budget.

More work needed, more time is needed. It's *NOT* in the budget. This is the sort of thing that I was talking about in wondering if they were accounting for all the costs.

Well, for one thing they seem to have a very underutilized and over staffed fueling depot they could shut down. Just give everyone a fleet card they can use at the local RaceTrac.

 

[Keith&Co.]

It's very hard to make money in the gas retail business without convenience store operations.

How does this apply to a gas station opened for the express purpose of breaking even?

They will have to burden their gasoline with a much higher level of fixed costs.

Only if they're trying to make a profit.
How does this apply to this gas station?

And I imagine it will be challenging to acquire gasoline at a competitive price compared to those who have a sophisticated procurement organization and significant more scale and bulk purchasing power.

They're expressly trying to drive the prices of the area convenience stores down to something reasonable. If the convenience stores manage to undersell the city, then everyone wins.
Or even, if they sell at the same price AND offer convenience store operations, they'll probably draw the big share of the market.

Oh, and if your pricing policy is "slap a few cents onto whatever you paid for it" you're often going to find you are wildly out of the market on many occasions.

I think they'd be okay with that.
Seriously, if the convenience stores undersell them...that's their goal.
They win.

And gasoline customer are quite price sensitive.

Which would be why they are going to the city pump right now.

It's hard to offset your largely fixed costs when you aren't selling any gasoline.

Did you even read the article?
If they find themselves in that position, i would guess they'd just pump the gas into municipal trucks.

Even harder without a store.

And yet, that's what they have.

On the other hand there will also be cases where your gas is so cheap you'll sell it out much faster than you anticipated and run dry. Customers don't like gas stations that run dry.

The refinery is local. Not a big logistics hassle, there.
All the guy that runs the place has to do is keep an eye on the amount of gas that's there and anticipate usage.
Like he did when it was a municipal trucks only gas pump.

 

[Keith&Co.]

The cost of their time is already in the city budget.

More work needed, more time is needed.

How much more?
The guys that oversaw the municipal pump now oversee the self-service pump.
What extra work? Maintaining the pumps, like they already had been?
Maintaining the property, like they already had been?
Watching other people pump gas...?

 

[AthenaAwakened]

The citizens of the town like it.

Oh I forgot

What they like doesn't matter.

Carry on

 

[Underseer]

They're charging the price of the gas plus a slight bit to cover their costs, hoping to break even.
To be socialism, as several in the article charge, wouldn't the city pay for X% of a gallon? Going lower than any of the competitors could possibly go?

Anything that involves the government doing anything (other than giving backrubs to rich people and large corporations) counts as socialism. People like you are why we have lost all of our freedoms and now live under a socialist dictatorship! Thanks a lot, freedom-hater! [/conservolibertarian]

 

[Keith&Co.]

Anything that involves the government doing anything (other than giving backrubs to rich people and large corporations) counts as socialism. People like you are why we have lost all of our freedoms and now live under a socialist dictatorship! Thanks a lot, freedom-hater! [/conservolibertarian]

Well, the only reason i have that view of socialism was from living in Britain while i was in the service. Defending freedoms. What branch were you in? [/usual response to anything like that sort of nonsense]

 

[Bronzeage]

The citizens of the town like it.

Oh I forgot

What they like doesn't matter.

Carry on

I would like cheap gas, too. I probably wouldn't like it the city opened a vintage department store and sold things cheaper than me because their sales staff was on the city payroll and the city didn't charge rent.

 

[Nice Squirrel]

Off the top of my head:
Gas stations,
General Stores
Marinas
Bookstores
Liquor Stores and Bars
Parking ramps
Restaurants
ISPs
Railroads
Hotels
Coffee houses

I meant examples of businesses run by cities, not examples of businesses.

That's what I listed. Or would you like to shift the goalposts now?

 

[AthenaAwakened]

The citizens of the town like it.

Oh I forgot

What they like doesn't matter.

Carry on

I would like cheap gas, too. I probably wouldn't like it the city opened a vintage department store and sold things cheaper than me because their sales staff was on the city payroll and the city didn't charge rent.

You wouldn't like it if I underpriced you either

So what is your point?

So long as the sellers follow whatever the rules are this day, what the customers want be damned? And what if the rules change? Customers, also known as citizens, have been known to make such changes.