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Privatize Driver Licensing June 27, 2008

Posted by federalist in Regulation, Transportation.

Why is government in the business of licensing drivers?  The public certainly has a compelling interest in ensuring that only individuals capable of safely operating dangerous machinery are allowed to do so in public.  Government licensing of vehicle operators is one way of pursuing this goal.  But it is by no means the only way.  It is not self-evident that governments should be particularly good at setting criteria for what constitutes competency in operating machinery, or that governments should they be particularly efficient in certifying individuals in accordance with those criteria.  Anyone who has interacted with a Department of Motor Vehicles or driven on America’s roads can attest to that.

Some competent young people are ineligible to get licenses just because of their age. Many elderly and infirm citizens retain their licenses even as their faculties decline to the point that they pose a clear danger to others.  People who have proven to be dangerous drivers can often stay on the road by gaming arbitrary “point” schedules and the mix of courts and bureaucracy responsible for administering these systems.

We already have a parallel and private driver licensing system called “insurance.”  In this system the government merely requires that car owners secure insurance (or post bond) against damage their cars could inflict during operation.  Insurance companies have a far more nuanced system for assessing the risk and competence of each driver they insure.

Why maintain a licensing system when we could just depend on private insurers to determine who should be allowed to drive?  Government need only require that every driver be insured.  Insurance requirements should be substantial — given the amount of damage that a vehicle can cause I would think $100,000 in liability insurance would be a bare minimum.

If a corporation or individual is willing to put that amount of money on the line with an individual driver, they will do a much better job than the government in ensuring that the driver is safe and competent.  And you’ll never have to go the the DMV again!


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