From Golden Fleece® to Gold Star: How the California DMV Cut Red Tape and Improved Customer Satisfaction

The California Department of Motor Vehicles (DMV) has long had a reputation for embodying inefficient government bureaucracy. The agency was rife with waste and inefficiencies, a condition that earned it the California Golden Fleece® Award in 2019, a project of the Independent Institute aimed at investigating and reforming the worst examples of government failure, misallocated resources, and bureaucracy in California’s state and local governments.

The report, Driving Californians Crazy: The Department of Motor Vehicles Wins Dishonor of California Golden Fleece® Award for Its Incompetence and Poor Customer Service by Lawrence J. McQuillan, was published in 2019. In the following years, DMV operations improved significantly by implementing many of the recommendations in the Independent Institute’s 2019 report. The current operations of the DMV have even been a pleasant surprise to customers. A recent commentary in the Sacramento Bee highlights how going to the DMV, a process that once was dreadworthy, has now become much easier, with “minimal red tape.”

Before the California DMV’s recent transformation, the department was a mess. Wait times were beyond reasonable, with some customers standing in line for five to six hours. Nearly one-third of DMV employees did not show up for work on time. One employee slept on the job for years with no disciplinary action. In 2018, the DMV mismanaged 23,000 voter registrations. In the same year, the Department of Homeland Security revealed that the DMV failed to properly comply with federal REAL ID regulations when it issued nearly 2.5 million REAL IDs.

To combat those issues and more, McQuillan’s report recommended that the DMV: (1) bring in new leadership, (2) move DMV functions offsite and work with private partners, (3) contract out the management of DMV branches to the private sector, and (4) use available private sector technology.

In July 2019, Steve Gordon was selected to be the new director of the DMV, an individual with an extensive background in technology and the private sector. A recent Stanford case study of Gordon’s leadership has highlighted the many ways he has been able to streamline DMV’s operations during his tenure. Gordon began his new position with “boots on the ground,” ultimately visiting all 180 DMV locations and putting more than 50,000 miles on his car. Not only did his new leadership supercharge the reform effort, but Gordon’s implementation of private sector technology, such as “document-recognition capabilities, machine vision, and optical character recognition (OCR) technology,” helped to speed up the REAL ID process, saving customers the immense hassle of presenting physical documents at DMV offices.

Many of the standard DMV functions have been made so efficient that they can be done without drivers visiting a brick-and-mortar DMV location, further improving the customer experience. Driver’s license renewals, driver’s license replacements, vehicle registrations, and other critical functions can now all be accomplished online. The DMV has doubled the number of online services it offers. Overall, customer satisfaction rankings have increased from 2.5/5.0 in 2018 to 4.25/5.0 in 2024.

Of course, improvements can still be made. The DMV could still benefit from outsourcing management and other activities, such as driver’s tests, to the private sector, capturing further efficiency gains. Questions also remain. For example, given that most essential DMV services can now be done online, do taxpayers still need to finance 180 brick-and-mortar offices around the state? Perhaps those locations should be consolidated to streamline the process even further and minimize inefficient uses of taxpayer resources.

The California DMV is a rare example of governmental red tape and inefficient bureaucracy being cut dramatically, improving the overall customer experience by applying entrepreneurial thinking and private sector technology. The Independent Institute helped lead the way through its California Golden Fleece Awards by providing objective analysis and impactful recommendations.