Charles Amos is a PhD student in political philosophy alongside working in the haulage industry. He writes The Musing Individualist Substack in his spare time.
The government recently announced that only learner drivers will be allowed to book their driving tests, meaning, an effective price cap of £62 on weekdays and £75 on evenings and weekends. This is aimed at cracking down on driving instructors and professional touts mass purchasing driving tests and then reselling them at a profit. Stopping this profit-making is supposed to end exploitation, uphold fairness, and ensure only genuine needs are met. This change to driving tests will not help the genuinely needy, its ambition to fairness is irrelevant, and, the exploitation mentioned is overstated at best to non-existent. Ultimately, price caps don’t work – and a driving test price cap is no different.
At the moment the waiting time for a driving test is six months and as a result many young learners keen to get on the road are paying between £200 to £300 to get a test booked sooner; a large mark up on the £62 weekday price the DVSA officially charges. According to the government’s press release a proper price cap will ensure ‘tests go to the people who genuinely need them.’ This is dubious.
The people who are willing to pay up to £300 are clearly desperate to get behind the wheel, perhaps because there are no buses to their work; they genuinely need a driving test. By capping the price on the secondary market at zero, the primary market price cap alone will operate, resultantly, someone who only wants a license for leisure travel and would only pay up to £80 for a test might get one instead of a job seeker who seriously values one at £300. Consumer surplus here is reduced by £120!
Now, it might be argued that with touts allowed rich kids who live in cities with no need for a car can crowd out needy poor people via bidding more than the latter can. Sure. No system is perfect. But at least under a booking system with a secondary market there is some means to demonstrate willingness to pay which roughly tracks need. Certainly, the future system where there will be a scrabble to book tests at 6am on a Monday morning is not prioritising need either; indeed, it just favours early risers and those with very fast internet connections. This is clearly not the fairness which the road minster, Simon Lightwood, desires. Regardless, fairness, understood as everyone having the same chance at getting something, is not intrinsically valuable anyway. Not everyone has the same chance of being able to afford a Bentley, but it is not unfair some have Bentleys and others do not, or, at least, it is not wrong.
The most powerful argument in favour of the effective price cap is everyone has an equal right to drive if competent, so, everyone should have an equal chance to realise that right where a scarcity of tests is present. Touts, then, in denying people this equal chance, and, making a profit, are taking unjust advantage of people, i.e. exploiting them. Thus: to stop exploitation, touts must be banned.
Two points can be made against this argument. First, it would not stop learners who are supposed to a have a right to a driving test from selling such a right onto others, e.g., professional touts; this is currently against the rules. Second, it is more important that those people seriously disadvantaged by the curtailment of their freedom get a test than a strict equality of chances to get one is upheld. And, as we have established, having a secondary market is a decent, though not perfect, means to identify those who will likely be seriously disadvantaged.
Just as an effective price cap of zero in the secondary market should not be imposed due to the economic inefficiency it creates, the price cap in the primary market ought to be abolished too, as this would allow for higher prices and an equilibrium to be reached. Plus, higher prices would make driving test centres more profitable and hence encourage their expansion. Not being able to drive can be a major bottleneck to young people getting into work, and, with youth unemployment at 16 per cent, it’s costless supply side reforms like these which are simply no brainers. But, of course, despite talk about prioritising economic growth, Labour is not likely to countenance them because of their inherent suspicion of markets as creators of unfairness. What a shame.
Charles Amos is a PhD student in political philosophy alongside working in the haulage industry. He writes The Musing Individualist Substack in his spare time.
The government recently announced that only learner drivers will be allowed to book their driving tests, meaning, an effective price cap of £62 on weekdays and £75 on evenings and weekends. This is aimed at cracking down on driving instructors and professional touts mass purchasing driving tests and then reselling them at a profit. Stopping this profit-making is supposed to end exploitation, uphold fairness, and ensure only genuine needs are met. This change to driving tests will not help the genuinely needy, its ambition to fairness is irrelevant, and, the exploitation mentioned is overstated at best to non-existent. Ultimately, price caps don’t work – and a driving test price cap is no different.
At the moment the waiting time for a driving test is six months and as a result many young learners keen to get on the road are paying between £200 to £300 to get a test booked sooner; a large mark up on the £62 weekday price the DVSA officially charges. According to the government’s press release a proper price cap will ensure ‘tests go to the people who genuinely need them.’ This is dubious.
The people who are willing to pay up to £300 are clearly desperate to get behind the wheel, perhaps because there are no buses to their work; they genuinely need a driving test. By capping the price on the secondary market at zero, the primary market price cap alone will operate, resultantly, someone who only wants a license for leisure travel and would only pay up to £80 for a test might get one instead of a job seeker who seriously values one at £300. Consumer surplus here is reduced by £120!
Now, it might be argued that with touts allowed rich kids who live in cities with no need for a car can crowd out needy poor people via bidding more than the latter can. Sure. No system is perfect. But at least under a booking system with a secondary market there is some means to demonstrate willingness to pay which roughly tracks need. Certainly, the future system where there will be a scrabble to book tests at 6am on a Monday morning is not prioritising need either; indeed, it just favours early risers and those with very fast internet connections. This is clearly not the fairness which the road minster, Simon Lightwood, desires. Regardless, fairness, understood as everyone having the same chance at getting something, is not intrinsically valuable anyway. Not everyone has the same chance of being able to afford a Bentley, but it is not unfair some have Bentleys and others do not, or, at least, it is not wrong.
The most powerful argument in favour of the effective price cap is everyone has an equal right to drive if competent, so, everyone should have an equal chance to realise that right where a scarcity of tests is present. Touts, then, in denying people this equal chance, and, making a profit, are taking unjust advantage of people, i.e. exploiting them. Thus: to stop exploitation, touts must be banned.
Two points can be made against this argument. First, it would not stop learners who are supposed to a have a right to a driving test from selling such a right onto others, e.g., professional touts; this is currently against the rules. Second, it is more important that those people seriously disadvantaged by the curtailment of their freedom get a test than a strict equality of chances to get one is upheld. And, as we have established, having a secondary market is a decent, though not perfect, means to identify those who will likely be seriously disadvantaged.
Just as an effective price cap of zero in the secondary market should not be imposed due to the economic inefficiency it creates, the price cap in the primary market ought to be abolished too, as this would allow for higher prices and an equilibrium to be reached. Plus, higher prices would make driving test centres more profitable and hence encourage their expansion. Not being able to drive can be a major bottleneck to young people getting into work, and, with youth unemployment at 16 per cent, it’s costless supply side reforms like these which are simply no brainers. But, of course, despite talk about prioritising economic growth, Labour is not likely to countenance them because of their inherent suspicion of markets as creators of unfairness. What a shame.