Easy Street

DMVs pioneered online government and now the agencies and their constituents are reaping the rewards.

by / August 1, 2001
Once considered the epitome of slow-moving government bureaucracy, motor vehicle departments were among the first state agencies to move real transactions online. Now their efforts are paying off.

Online services in leading states have begun to capture a significant share of the routine citizen-to-government business handled by motor vehicle agencies. And officials say growing use of electronic transactions is shrinking lines in DMV offices, lowering transaction costs and vastly improving public satisfaction with one of governments most maligned institutions.

"One reason jurisdictions are really pushing for this is because DMVs tend to get a pretty bad rap," said Renee Eastman, e-government coordinator for the American Association of Motor Vehicle Administrators (AAMVA). "They have been extremely aggressive in trying to get citizens to do services online."

A study released in May by Accenture shows online services rapidly becoming the norm at motor vehicle agencies across the nation. Agencies in 30 states offered at least one online service as of January 2001, more than doubling the previous years findings, according to the IT consulting firm. Almost 30 percent of state motor vehicle agencies offered multiple electronic services, up from just 8 percent the year before, the study added.

"I think the timing certainly is right [for online services]," said Rob Berton, managing partner of Accentures government practice. "People are demanding them, and the technology is there to support them. All of that is coming together."

Drivers in many states appear to be giving electronic services a warm reception. In Virginia, for example, nearly a quarter of eligible citizens now opt to renew their drivers licenses via the Internet. In Massachusetts, more than 15 percent of drivers renew their vehicle registration online. And in Arizona, about 17 percent of all specialty license plate purchases flow through the Web.

Penny Martucci, assistant division director of competitive government partnerships for the Arizona Department of Transportations Motor Vehicle Division, said electronic services, offered to Arizona drivers since late 1997, have played a key role in reducing the time citizens spend in the divisions offices. "In the early 90s we had two- to three-hour wait times for walk-in customers," she said. "Now the average wait and transaction time in the offices totals about 25 minutes."

Furthermore, the agency estimates each online transaction costs about $5 to process, less than half the overhead of a traditional office visit.

Whats Available?
Among the currently available services, online vehicle registration renewals - offered in 26 states according to AAMVA - are by far the most common. These applications also tend to draw some of the heaviest user traffic, with some attracting tens of thousands of users each month. The Massachusetts Registry of Motor Vehicles processed 33,282 online registration renewals in April, while Arizona received 21,878 registration renewals during the same period.

Online drivers license renewals are gaining popularity as well. AAMVA data shows eight states currently offer these services, and similar applications are under construction in several other jurisdictions. One of the most successful examples comes from Virginia, where the states Department of Motor Vehicles is processing 7,000 of these transactions per month, or about 22 percent of all license renewals. Similarly, Floridas Department of Highway Safety and Motor Vehicles began renewing drivers licenses online last summer and currently processes about 5,000 of them per month.

In addition, at least 14 states now allow citizens to perform address changes online, AAMVA said. Several agencies reported steady traffic through these applications. In Virginia, for example, an average of 4,000 drivers update their address information online each month, and monthly transactions through Massachusetts online address-change service neared 9,000 this spring.

A similar service in Arizona processed 6,674 electronic address changes in April - just one month after its introduction. Martucci said the convenience of online transactions encourages drivers to bring address information up to date. "People are saying they love the opportunity to do the online address change. They may have moved a couple of years ago, but never felt like going into an office to change it."

Quick Results
Rapid user acceptance of Arizonas address-change application is typical of many online offerings. Agencies say citizens often flock to online motor vehicle services once they become available.

For instance, the Florida Department of Highway Safety and Motor Vehicles processed fewer than 300 online registration renewals in January, the first month of operation for its system, said spokesman Bob Sanchez. In April, the number of monthly transactions surpassed 6,000. Likewise, Michigan saw its yearly total for online registration renewals grow from 69,229 transactions in fiscal 1999 to nearly 148,000 in fiscal 2000, according to AAMVA data.

The interactive nature of online services, many of which include e-mail feedback options and electronic survey forms, also means agencies quickly hear what citizens like and dislike about new offerings. "In 30 days you know what the acceptance is because you see the usage and you see the comments coming in," said Berton.

Martucci said Arizona currently is fine-tuning its address-change application based on user comments. Designing the system was complicated by the fact that Arizona drivers may have a residential address, a mailing address and an address where their vehicle is stored, she said. "We felt there would be some confusion when we put the address change out, but we didnt know how to change it. Feedback from customers gave us insight into what changes to make."

And for motor vehicle agencies, better known for generating customer complaints than praise, the strongly positive response to online transactions is a breath of fresh air. "[Users] just cant believe that a government agency would be so forward thinking," said Martucci, noting that online user surveys show a 99.5-percent approval rating for her departments Web services.

Boosting Business
With current online customers satisfied, motor vehicle agencies are now attempting to draw more citizens to their sites. Some have turned up the volume on promotional efforts or cut the cost of Web transactions.

In Massachusetts, an advertising blitz that began late last year has helped push the states total online motor vehicle transactions to nearly 50,000 per month. "We did a campaign where we put posters in the subway. We also handed out leaflets at one of the toll bridges," said Larry McConnell, CIO for the Massachusetts Registry of Motor Vehicles. "Almost everything we push out of our building has the URL on it."

Additional charges for online transactions - sometimes called convenience fees - also appear to be losing favor. A growing number of motor vehicle officials say the fees discourage use of Web applications and contradict the message that electronic services boost government efficiency.

Arizonas Motor Vehicle Division eliminated a $6.95 convenience fee on registration renewals in 1998 and saw its number of monthly transactions grow from 5,000 to 13,000, Martucci said. Under legislation passed this year, the state also will drop a $2 convenience fee for duplicate drivers licenses purchased online. Florida is following suit, according to Sanchez. This summer the state eliminated a $3 convenience fee charged for online registration renewals.

Several other states offer citizens discounts on Web transactions. Massachusetts has given drivers a $5 discount for renewing vehicle registrations online since opening its Web service in 1996. Virginia took the same approach when it began offering online drivers license renewals in late 1999, giving citizens a $1 break for using the Web service.

The move to eliminate extra charges on Web transactions also extends to credit card fees. Virginia and Massachusetts have long absorbed the processing fee charged by credit card providers when citizens pay with plastic. And other agencies that currently pass on those fees to citizens are now seeking ways to pick up the tab themselves, according to Accentures Berton.

Minnesotas motor vehicle agency charges credit card users a 1.9-percent processing fee, but it also offers a popular Automated Clearing House (ACH) option that eliminates the surcharge by electronically deducting funds from a customers checking account, said Becky Mechtel, communications coordinator for the Driver and Vehicle Services Division of the Minnesota Department of Public Safety. Of 66,000 Internet vehicle registration renewals processed by the agency since last October, more than half were paid using the ACH method, Mechtel said.

ACH users must provide the agency with checking account information similar to the data required for initiating direct payroll deposit with an employer. The agency deals directly with the customers bank to complete the transaction, avoiding processing fees. However, the option does carry a risk of bounced checks or incorrectly entered account information, said Mechtel. Therefore, the agency delays mailing of license tags for several days in ACH transactions to allow payment to clear.

Although incorrect checking account information may be somewhat more common with Web transactions than mailed renewals, neither bounced checks nor bad account data have been a serious problem for the agency, Mechtel said. And all license tags purchased online reach citizens within 10 days, regardless of the payment method they choose, she added.

Still to Come
If motor vehicle agencies have been quick to Web-enable basic transactions, theyve moved more slowly on services that demand deeper integration. Berton said most agencies have yet to tightly weave Web services into existing business processes. Accentures study said the introduction of services that automatically e-mail citizens when vehicle registrations or drivers licenses must be renewed will be one sign of maturing electronic vehicle services.

Berton acknowledged that some motor vehicle transactions - particularly those requiring vision tests or specific forms of identification - are a long way from moving completely online. But even those tasks may benefit from a hybrid approach. For example, citizens may one day complete the paperwork for complex transactions online, then travel to the local motor vehicle office to be photographed or to present the identification needed to complete the task, according to Berton.

Jurisdictions also are considering alternative methods for conducting vision tests. "Theyre saying, Why not have optometrists do that? Why do people need to come to some central location, when youve got a whole network of providers that you can leverage?" Berton said.

New Mexicos Motor Vehicle Division hopes to solve the vision test issue by allowing citizens to test themselves on a home PC. The agency is piloting PC-based vision testing software in several of its field offices, and it eventually intends to offer an official version of the test online, said Paul Mann, the agencys information services manager.

Citizens can sample the online test at the agencys Web site . Currently the online test, developed by VisionRx, is informational only, but it does give users an idea of how well theyll perform on the departments official test. Besides the standard measure of visual acuity, the application tests visual fields, color vision and contrast sensitivity.

Efforts like these may signal that motor vehicle agencies are poised to tackle more complex undertakings.
"I think theyve been very smart. Agencies are picking the low-hanging fruit first, and some of the more difficult transactions - those that require more end-to-end integration - are yet to come," Berton said. "Its kind of liking putting your toe in the water. These agencies are getting very confident and they are ready to move on."
Steve Towns

Steve Towns is the former editor of Government Technology, and former executive editor for e.Republic Inc., publisher of GOVERNING, Government TechnologyPublic CIO and Emergency Management magazines. He has more than 20 years of writing and editing experience at newspapers and magazines, including more than 15 years of covering technology in the state and local government market. Steve now serves as the Deputy Chief Content Officer for e.Republic.