Gamefly asks PRC to hurry up- postage dispute is eating into its profits
In a letter to Postal Regulatory Chairman Ruth Goldway, Gamefly CEO David Hodess has asked the PRC to expedite its consideration of Gamefly’s appeal against the USPS’s alleged discrimination against the company. Gamefly, which rents game DVDs by mail, claims that the USPS gives preferential treatment to Netflix:
I am writing to you to request that the Commission do what it can to expedite its decision in the GameFly complaint proceeding. GameFly frled this complaint nearly two years ago. Before that, GameFly spent 18 months working with the Postal Service in an attempt to resolve informally the issues on which the complaint was based.
I understand that the Commission has competing demands on its resources. Delay in resolving the case, however, is costly to GameFly. At the company’s current volume of approximately 1.2 million shipments per month, the difference between the two-ounce flats rate of $1.05 that GameFly must pay to avoid automated letter processing for most of its DVD mailers, and the one-ounce letter rate of $0.44 that Netflix pays to avoid automated letter processing of return mailers, amounts to about $730,000. This amount represents more than 100% of GameFly’s monthly net income in 2011.
President and CEO