May 14, 2003

Austrian Economics in American Retail, Part II

State Coercion Every 4,000 Miles

I am glad the State of Colorado does not mandate oil changes. Under the Tenth Amendment, they are perhaps protected from Federal mandates. Anyway, out here the wilds of the free market dictate where and when a car owner lubes. There is a mandated fee for disposal, of course, but I still get to choose whom I give it to.

I give it to the Great American Tire Center. They offer a reasonable price, good service and a comfortable waiting area. Coffee and bottled water is complimentary. There is a nice sofa, color TV with Satellite, Nintendo Game Boys®, newspapers – these people have gone to great lengths to make you happy while you wait.

On a couple of occasions, I have changed my oil on the same day I get my emissions test. For those lucky enough not to know, Colorado mandates an emissions test for every vehicle when it is sold or every two years. A newer vehicle is okay for four years but if you sell it three months in, it will need to be tested (and tested again in two years, still 21 months before the new sticker would have expired).

I don’t know about the efficacy of these tests. I cannot believe that there is a net gain if you factor in the extra mileage people drive to get the test, the fuel burned during the test, and the economic friction that causes people not to buy/sell vehicles to avoid this. But I’ll set aside efficacy. I’ll pretend I believe. The trouble is that the State replaced a simple test offered everywhere with an exhaustive (Hey, I didn’t go for the pun last week) dynamic load test. One, state sanctioned vendor offers this test, Clean Air Colorado (CAC).

The test takes about as long as an oil change and is similar in complexity and cost. Given the similarities, please allow me to contrast the experience. The tire shop is a mile away, in a strip mall with groceries, fast food, coffee, and other service and retail. CAC is 15 miles away, I am not making this up, right past the jail and the airport in an industrial park that is difficult to find. There is nothing within five miles.

The good people at CAC do not take credit cards. You may write a check or pay cash. There are ATMs five miles away if you forget this. How long would an oil change service survive without this basic customer convenience?

The lines and the wait are longer at CAC but even a short wait would seem interminable in the waiting areas provided. I have little doubt the holding cells down the street aren’t nicer. There are a few cheap plastic and wire chairs, but not enough for the people waiting; and a couple of them are usually broken.

Satellite TV with a remote on the table? No, that would be the tire place. Here there is no table, there is a 13” TV mounted on the wall, set to Jerry Springer, with the volume blaringly loud. Free coffee, juice? No. Each lane has its own waiting area with neither vending machines nor restrooms -- these are centralized. Of course, they are also dilapidated and inconvenient.

I could go on – every two years I do go on – but you get the idea. CAC is under zero competitive pressure to provide amenities. If you wish to drive in the Denver/Boulder area, you must do this. The oil change providers must compete for your business. They don’t give out juice to play Mother, they want you back.

CAC is a private company but it operates as a State supported monopoly. The level of service and professionalism there is very good. The firm is staffed with good people, although when you watch them gun the engine of your already shaking car on the Dyno, it’s hard to be sympathetic. It’s not the staff that is bad, it’s the State coercion, it’s the State monopoly

Every two years, I see this as a metaphor for all the State monopolies. I’d like to see Great American Schools, I’d like to see the Great American Department of Motor Vehicles and I live in fear that some people I know want to institute Clean Air Colorado Hospitals. Privatization is messy but it works.

Last week: Austrian Economics in American Retail

Next week: Austrian Economics in The Drive Thru

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