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 present system prevalent in USA, the drivers’ quality on the road is monitored and esnured through a system of checks and balances before the actual driving license is issued. In the present system, a test is also taken following a temporary revocation or suspension of the license due to any accident or issuing of a ticket due to negligent driving. Therefore in the existing system, there are significant appraisal and testing costs which are part of the overall system to ensure that only skilled drivers are operating on the road.

The costs associated with continual examination are detailed below:

·         Manpower costs which is deployed for monitoring and ensuring responsible driving.

The quantum of the costs associated with checking and ensuring driver quality is still small as compared to costs due to damage to infrastructure constructed by government and general setup (internal costs) and to other drivers and public (external costs) in case of negligent driving leading to a mishap.

In order to improve overall driver quality without increasing overall system costs, technology intervention through better monitoring via smart sensors, cameras can be used and more frequent recertification of drivers can be done to increase efficiency of the overall system.

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