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Originally published Saturday, August 23, 2014 at 5:44 PM

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Innovative driving school hits wall of French regulations

Experts say the struggle of Ornikar’s owners shows how the myriad rules governing driving schools — and other highly regulated businesses — stifle competition and inflate prices in France.


The New York Times

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PARIS — Alexandre Chartier and Benjamin Gaignault work off Apple computers and have no intention of ever using the DVD player tucked in the corner of their office. But French regulations demand that all driving schools have one, so they got one.

Chartier, 28, and his partner, Gaignault, 25, are trying to break into the driving-school business in France, using computer technology to match teachers and students across the country and to offer low-cost rates.

They are not having an easy time. The other driving schools have sued them, saying their innovations break the rules. Their application for an operator’s license for their school, Ornikar, has been met with total silence at the prefecture in Paris. “It seems like the idea is to wait us out until we run out of money,” Gaignault said recently.

Various experts say the pair’s struggle highlights how the myriad rules governing driving schools — and 36 other highly regulated businesses and occupations — stifle competition and inflate prices in France. The rules set up barriers to newcomers, sometimes indirectly.

In the case of driving schools, the government offers only a limited number of exams each year, and those are doled out to the driving schools depending on their success rate the year before. That alone gives the old guard a virtual monopoly, according to Gaspard Koenig, who wrote a book on his (failed) efforts to get a driver’s license in France, despite having graduated from one of the nation’s most elite universities. He got his license in London.

The failure rate for the French driving exam is about 41 percent, the government office for road safety said.

Francis Kramarz, an economist who has studied the French-licensing system, says barriers to getting a license are so high that about 1 million French people who should have licenses have never been able to get them.

“Not having a license has a major impact on employment possibilities,” he said.

It often costs 3,000 euros (about $3,900) to get a license, he said, though others said the average is closer to 1,500 to 2,000 euros.

Would-be drivers register with a driving school. The schools offer instruction in their own classrooms for the written test, and on the road. They also determine when students can take an exam.

A school never has enough exam slots for all of its students, so it picks the best students first. The wait can stretch 18 months or longer. Students are required to take only 20 hours of driving lessons, but most do double that as they wait to be tested.

Under the Ornikar model, students could study for the written test on their own computers. They would be able to take classes from and rate licensed instructors of their choice, making appointments online.

Ornikar students also would be able to take advantage of a rarely used clause in the regulations that allows individuals to sign up for the exam on their own without paying a fee.

Owners of other driving schools are crying foul. Philippe Colombani, head of a union of school owners, UNIC, said Ornikar was breaking rules others had to follow. For instance, he said. the rules dictated a closed-off area for study accessible to people with disabilities. Ornikar, he said, did not have such an area, and its owners’ assertion that headsets would provide privacy was not good enough.

“I have people who spend 8,000 euros on construction to make areas handicapped accessible,” he said. “What do I say to them?”

His first lawsuit against Ornikar failed to shut it down, but Colombani said he would continue and raise other issues, such as whether the use of freelance instructors is permissible.



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