[bko]

I suppose at the margin they can compete. But there's also a lot of uncertainty when adding a single route can wipe out your entire business. Also private services often pick off the most profitable opportunities leaving the leftovers most undesirable services to the public option. Consider student debt. If you're going to Harvard MBA or Yale law school, there are private options like Sofi that will give you a rate better than federal loans, and that serves as a selection bias and leaves the worst highest risk loans that no private lender would fund to be backed by the government.

Or another example: Google Analytics. It's awful service in many ways, but because they're free and can afford to be free, they captured 80-90% of web analytics. I would not want to compete with GA.