Call me a Taxi

“Up until the early 1970s, funeral homes in rural areas offered their hearses for use as ambulances to transport patients to hospitals.” (Mental Floss)

Vertical integration is the servicing of the same customer across a product lifecycle. For example: a company that builds houses, facilitates the buying transaction, maintains the house, and later facilitates the selling transaction would be a vertically integrated business. Plenty of times vertical integration is entirely reasonable; perhaps a product requires certain expertise or equipment. On the other hand, vertical integration may introduce perverse incentives; in the house example above, the builder may have interests contrary to the home buyer's.

With that in mind, how about owning a hearse that doubles as an ambulance?! This was the case in rural communities up the 1970s. There surely is an argument that this is simply a case of efficiency due to specialized equipment: a hearse is one of a few vehicles that can carry a human lying in the direction of travel; a small town with little use for either an ambulance or hearse would find economy is using one vehicle to do double duty.

But here is where things get dicey: would a hearse driver have an incentive to go slowly to the hospital in hopes that the poor patient might expire, thereby affording him another business opportunity? If the ambulance cum hearse owner also held a funeral home, just think of the possibilities.

I raise the above in hyperbole, as it is unconscionable that one would lack morals to the point of allowing a fellow human to die just to boost revenue. (This could never happen, right?) But the point that vertical integration could have consequences contrary to consumer interests stands. This could be an auto manufacturer that designers its cars so as to only accept higher priced, proprietary OEM components.

A note to my loved ones: if you call an ambulance for me and it looks like a hearse, hail a taxi!

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