On the Road to Privatization

Private, for-profit companies like Sears Authorized Driving School, Inc., teach thousands of students to drive each year.

April 1, 1998 marked the end of the state’s mandate compelling public schools to offer driver’s education to their students, and some Michigan school districts are already moving toward privatization.

From 1955 until this year, the state of Michigan directed school districts to provide driver’s education. While districts may now opt not to offer driver’s education, they may still receive the state per-pupil subsidy, which was $73.33 in fiscal year 1996-1997, if they choose to remain in the business of teaching teenagers how to drive.

Privatization can free schools from the costly and onerous task of providing a largely unnecessary program. For example, Michigan’s largest private driver training school, Sears Authorized Driving School, Inc., alone teaches nearly 9,000 teenagers how to drive each year. The Sears school operates in 18 locations throughout the state, employing 60 Department of Education-certified instructors.

Parents and students use private schools like Sears for a variety of reasons. One is that most public schools offer driver’s education classes only in the summer, whereas privately run driving schools will teach students just as soon as the law permits. This fact alone makes private training highly attractive to teenagers eager to earn their licenses before summer vacation begins. Private driver’s training companies in Michigan charge between $200 and $325 for an intensive three week course that can be designed around a student’s schedule.

Another reason parents and students prefer private driver’s education courses is quality. The competitive pressures of the marketplace move entrepreneurs to provide the best service to their customers at the lowest price, or risk going out of business. Competition thus ensures higher quality services by providing entrepreneurs with incentives to be both innovative and responsive to the needs of their consumers. By contrast, the tax-subsidized public school courses lack such incentives.

Privatization can free schools from the costly and onerous task of providing a largely unnecessary program.

Privatizing driver education courses also saves money. The Southfield school district plans to discontinue its driver education program, which last year cost taxpayers $63,486. Likewise, elimination of driver education in the Grand Ledge district near Lansing is expected to save $50,000 of school tax money annually. Grand Ledge’s sister districts of Waverly and East Lansing may follow suit by shedding their student driving programs as well.

Schools in Jackson, West Bloomfield, and Hazel Park are taking a different approach. They plan to charge tuition in order to defray part of the cost of their driver’s education programs. Other schools are considering contracting out with private driver training firms such as ABC Driving Schools in Detroit.

Even some entrepreneurial teachers are getting into the act. Roger Harkness of Onsted schools, for instance, has started his own private firm to provide driver training to students. Grand Ledge’s former driver education teacher Tandy Preston is already training student drivers at his new private business.

As tighter budgets force more Michigan school districts to find ways of saving money, privatization of driver education programs will become an increasingly attractive alternative. The trend is clear: privatization is driving governments to higher quality services and greater savings.