The State of Texas Department of Motor Vehicles ("DMV") charges $5.00 "to maintain a secure, real-time database of information on persons to whom temporary buyers' tags are issued." Transportation Code Sec. 503.0631
4.4 million vehicles are sold each year in Texas. At $5.00 for each tag, these sales generate approximately $20 million for the DMV and the State of Texas. According to the Transportation Code (see the above paragraph), this revenue is to "maintain....a database."
Tags On Demand, offers the same services to the dealers for $1.50. This fee would include supplies that are not currently included with the $5.00 fee paid to the State.
These materials are superior in that they are water-proof, plastic-free and environmentally friendly.
Before the creation of the DMV in 2009, and for the five years preceding, Tags On Demand maintained the database for its auto dealership clients for 70% less than the current $5.00 charge.
Tags On Demand can still offer these services--both the materials and database maintenance--at $1.50. However, the DMV does not allow access to the numbers that will be assigned to each tag. Since the DMV is in charge of the database, no tags can be issued without first accessing these numbers. Herein lies the problem of the effective monopoly described in the previous post.
