In the US the process for getting and keeping a driver’s license is as follows:

Question

In the US the process for getting and keeping a driver’s license is as follows:

Study the law Get learner’s permit Practice driving Driver’s test, get license Drive Accident or get a ticket Results (e.g., temporary loss of license) drive accident drive get old and stop driving. In some places there is a test for proficiency at an older age such as 70; in others there is none.

Analyze the above system from the perspective of quality costs. How does this system maintain driver quality (meaning drivers who don’t get into accidents)? What are the prevention and appraisal costs that this system incurs? How do they compare (in magnitude) with internal and external costs? If you were redesigning the system to improve driver quality without raising total system costs, what would you change?

(Note that in this as in many other services, the customers (the drivers) are also part of the production process. So you can call “internal failure costs” the costs borne by the government plus the bad driver. External failure costs are costs that affect other drivers.)

Explanation / Answer

In the stated system, the quality of the drivers on the road is maintained through a system of evaluation before the driving license is awarded. Also following an accident or a temporary suspension of the license, a test is administered to find the suitability to renew the license. Thus in this system, significant testing and appraisal costs are incurred to ensure that only trained and skilled drivers finally get to drive on the road.

The prevention and appraisal costs are incurred through the following:

The magnitude of the appraisal and prevention costs are still lesser than the potential costs that may be incurred to the government infrastructure or the drivers (internal costs) or other drivers and public (external costs) in case of negligent driving leading to a mishap.

In order to improve driver quality without increasing overall costs, one method would be to recertify and revalidate driving skills at a frequency of every two to three years. Also artificial intelligence can be used to track certain drivers and their driving through CCTV cameras and bring them in for regular training and education if their driving is gradually deteriorating and could prove detrimental to others.

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