26 November 2012

This poor guy must think he's in Snow Crash

Not Always right | Leaving The Country Is Fined By Us

(I work at the Dutch version of the DMV. We get a lot of calls by people trying to get a fine waived. In most cases we can’t, and in some cases we can give the customer some slack.)

Me: “This is [name]. How can I be of service?”

Customer: “Yes, I want to complain about your service, and I want you to remove me out of your system!”

(I’m a bit confused; since we are a government-controlled agency, it is a bit strange for someone to ‘cancel their subscription’ with us.)

Me: “What issue are you having with us?

Customer: “I got fined because I didn’t get my car inspected in time for my MOT!”

(Note: Translated into English, ‘MOT’ is our Periodic Vehicle Inspection. Normally, we send out reminders as a courtesy, but we cannot be held responsible if a customer forgets to get their MOT done. This customer in particular did not have an MOT for about 9 months.)

Me: “Ma’am, I am going to try to repeat what you are saying so I know that I understand correctly. You want us to ‘cancel’ your ‘subscription’ to us, a government-controlled agency to which you, as a person living inside the country itself, are responsible to abide the laws on which owning a car are set?”

Customer: “Yes, I want you to remove me from your system! I wish to go to your competitor!”

Me: “Miss, with all due respect. I first of all do understand the discomfort of getting a fine for these kinds of laws. But don’t you agree that moving to a different country is a bit drastic, just because you do not want to get fined for your car?”

Customer: *continues ranting*

Me: “Miss, again, with all due respect, I do apologize for letting you feel like this. However, we have laws to which you, me and everyone needs to abide to. How unfair the fine may seem, I cannot undo it and I cannot take you out of our system.”

Customer: “Why not?!”

Me: “Because that would be considered a criminal offense. It would also involve you, leaving our country and living abroad. We do not have a competitor. I wish I had other news for you, so I’m truly sorry.”

Customer: “F*** you!”
"We do not have a competitor." Yeah. That's the problem right there.

My fondest wish is that I can show this story to my grandkids in 50 years and they'll think the DMV worker is the crazy one for supporting a state that doesn't contract this kind of thing out to multiple providers.


  1. If they contracted it out to multiple providers, there would be no MOT reminder and no human customer service rep.

    Well, there would be, for a couple years, when small mom & pop DMVs flourish. After that, they'd all be rolled up into Time-Warner-Microsoft-McDonalds DMV and suddenly a driver's licence costs $95.99/month and there's nothing you can do about it because they've used their substantial lobbying muscle to entrench their monopoly.

  2. And you're inserting that that lobbying-backed monopoly would be worse than the monopoly we already have, backed by cops and soldiers and tax collectors and prison wardens? Why would one monopoly be capable of extracting more from consumers than another?

    As a lemma, you're also concluding that competition is a bad and in fact unnecessary method of organizing production, since it just leads to monopoly anyway. I've got to say that doesn't make a lot of sense to me, but if that's what you want to believe then be my guest.

  3. PS Note that even in your example, it's only through the abuse of power by a government that the corporation can extract rents. It's always been my experience that governments create more anti-competitive situations than they solve, but as I said above, continue to believe what you want.

  4. How are the privatizing companies supposed to make a profit? The DMV is a perfect example of a government organization: paid for by taxes, it quite literally only uses the bare necessary funding it needs. Hand it to a private company, they're not going to run it out of the charity of their hearts, they're gonna want to make a profit, and that means charging you money-- more money than you pay in taxes, to be sure, since the government's DMV isn't profit-motivated.

    Complaining about the government's "monopoly" on the DMV is like complaining about their "monopoly" on road repairs or fire departments. It's a charity!

  5. "[The DMV] quite literally only uses the bare necessary funding it needs."

    That's interesting public economy you've got there. What makes you think they operate as efficiently as possible? What endowed the state budget committee with the wisdom to recognize the exact appropriate price for operating a DMV?

    There are actually plenty of examples of both private fire departments and private road repairs, both historically and currently. For example, private fire fighting firms will be hired by insurance companies in the West to protect properties they have policies on from forest fires.

    I think you also are forgetting that having a government pay for a service does not mean that they must also be in charge of providing a service. Let me sketch a situation which might be partway between the government monopoly we have now and the (slightly comedic) anarchocapitalist model of Snow Crash.

    A state currently pays $X out of its treasury to operate their DMV. They contract with several groups for a limited time period to operate the DMV facilities, providing the same services they do now: track vehicle registrations, issue and collect license plates, administer driving exams, etc. (I'll not that the latter is already done by private driving schools in some places.) The private contractors are paid, say, $X-k dollars total. They are also paid in proportion to how many customers they have served from the total. You'd need to sit down with some mechanism design folks to work out the details.

    The state wins because their budget is now $k lower. The contractors win because they are the residual claimants on any amount of money if expenses are below $X-k. This gives them proper incentive to run the place efficiently, and to serve the most customers with the most satisfaction, since customers can switch to a DMV location operated by a competitor. The citizens win since they now have multiple organizations competing with each other to keep them happy.

    The guy in the original story above could switch to a DMV firm that sent out more numerous notices about renewals, for instance. My county DMV offices are only open from 9:30 to 4:30. I'd bet some firms would find it profitable to be open earlier or later, or on Sundays.

    You could do the same thing with road repairs. Assign each stretch of road to a contractor. Pay them based on how many miles they cover. Judge them based on how quickly they repair potholes, the average quality of their roads, the amount of time lanes have been closed to traffic, etc. Firms that do worse in this measure will have their allotment of road-miles shrunk, costing them revenue. Those that do well will see their allotment increased. You could even periodically auction off rights to road segments to allow new entrants into the market. Just because the state is involved in paying doesn't mean the state DPW needs to be in charge of carrying out the operations.

  6. Do you have any actual experience with working with contractors? If they cut costs temporarily during the pre-Time-Warner phase, they'll do so by cutting corners like a fractal. Hope you don't mind getting your spine broken by someone who shouldn't be behind the wheel of a car, because the DMV hired Jose Garcia to do the drivers tests for $1 an hour. Oh, and all the info you give them is gonna be sold to Mark Zuckerberg, you can count on that.

    And that's all before Time-Warner kicks in. Enjoy paying double digits every month for your license, Mr. Galt.

  7. I do have experience with it, yes. And it's apparently a very different experience than you've had. I could take time to try and explain why I disagree with you, but it's pretty clear -- from your name-calling if nothing else -- that that won't be a productive conversation.


    PS I would encourage you to think about the definition of a natural monopoly. While cable operators are often upheld as a common example of such, they are not the general rule of all markets, rather they are an exception prevailing in certain specific conditions. "But Time-Warner!" is not as strong of an argument as you seem to think.

    PPS I already pay highly for my license, as does everyone else, licensed or not. It's just hidden in income, property and sales taxes rather than being linked more transparently to the service I'm receiving.