Yes, if we accept your ifs, we conclude that the new business is net negative. This really happens and some new businesses really are net negative (although I think negligible compared to negative externalities). But why think your assumptions are normal? Why think that the fixed cost of the business is larger than the time savings of the closer customers? Why expect no price competition, no price sensitivity?
There is a standard analysis of competition. If you reject it, it would be good to address it, rather than ignoring it. The standard analysis is that competition reduces prices. The first order effect of reducing prices is a transfer from producer surplus to consumer surplus, taken as morally neutral. But the lower price induces more sales, creating increased surplus. The expectation is that the first order neutral effect swamps the second order positive effect, which swamps the fixed costs.
The producer surplus is a rent. It induces rent-seeking. The second company to enter the market is mainly driven by rent-seeking. But by lowering the price they probably produce much more aggregate surplus than they capture. The more competitive the market, the lower the rents and the less new entrants are driven by rent-seeking. Late entrants are driven by the belief that they are more efficient.
The producer surplus is a rent. It induces rent-seeking. One form of that rent-seeking is new entrants, but another form is parasites within the organization, which seem much worse to me. Competition applies discipline which discourages these parasites. If the producers are innovative, you might think that they will make better use of the surplus than the consumers. If you do not expect parasites, maybe it would be better for innovators to capture more wealth. Maybe this was true a century ago, but it seems to me very far from true today. So I think the dispersal of wealth by transferring from producer surplus to consumer wealth is morally good by discouraging parasites within larger firms.
Yes, if we accept your ifs, we conclude that the new business is net negative. This really happens and some new businesses really are net negative (although I think negligible compared to negative externalities). But why think your assumptions are normal? Why think that the fixed cost of the business is larger than the time savings of the closer customers? Why expect no price competition, no price sensitivity?
There is a standard analysis of competition. If you reject it, it would be good to address it, rather than ignoring it. The standard analysis is that competition reduces prices. The first order effect of reducing prices is a transfer from producer surplus to consumer surplus, taken as morally neutral. But the lower price induces more sales, creating increased surplus. The expectation is that the first order neutral effect swamps the second order positive effect, which swamps the fixed costs.
The producer surplus is a rent. It induces rent-seeking. The second company to enter the market is mainly driven by rent-seeking. But by lowering the price they probably produce much more aggregate surplus than they capture. The more competitive the market, the lower the rents and the less new entrants are driven by rent-seeking. Late entrants are driven by the belief that they are more efficient.
The producer surplus is a rent. It induces rent-seeking. One form of that rent-seeking is new entrants, but another form is parasites within the organization, which seem much worse to me. Competition applies discipline which discourages these parasites. If the producers are innovative, you might think that they will make better use of the surplus than the consumers. If you do not expect parasites, maybe it would be better for innovators to capture more wealth. Maybe this was true a century ago, but it seems to me very far from true today. So I think the dispersal of wealth by transferring from producer surplus to consumer wealth is morally good by discouraging parasites within larger firms.