The driving school market - Italy

1.2 The market for driving schools in Italy

In order to obtain a driver's license for a vehicle, it is necessary to take an examination, which consists of a written test and a practical test. The theoretical test can be taken privately or by choosing to continue withenrollment in driving school, attending the relevant classes. In the second scenario, a series of theoretical courses are offered, thanks to which one can practice the quizzes, going to increase the chances of succeeding in the exam. The price of enrollment in the driving school is about ***-*** €, although much depends on the location where it is located. The theory course, on the other hand, costs as much as ***-*** €, including the previously mentioned registration fee.

It is not possible to know the official size of this market in Italy. A reasonable estimate of the size of the driving school market can, however, be provided by taking into account two variables: the average price per person and the number of exams taken. On average, the average costs paid per person consist of the following items:

driving school - theory course: *** € guides: *** €

Thus, it can be inferred that the average cost for driving tests revolves around *** €.[***]

Dwelling on the number of driving tests ...

1.3 Impact of COVID-19

The *,*** Italian driving schools that were open during the pandemic period were severely affected by the lockdowns imposed as a result of the Covid-** outbreak. From the beginning of March to May **, ****, all registration and enrollment for driving courses and license exams were suspended. This exacerbated the already existing difficulties that stemmed from an increase in the VAT tax on B-type licenses at the beginning of the year and the fact that the €*** COVID bonus that is guaranteed to workers and lay-offs were not received. This has meant a lack of liquidity for driving schools and their **,*** employees (***).

The problem has affected both the thousands of users waiting to be able to complete the entire process of obtaining a driver's license and the professional drivers who need to renew their driver qualification card (***), an essential document for driving[***].

As of May **, ****, driving schools have reopened but with different regulations and rules . Of course,mask wearing and social distancing were mandatory and only one student and the driver could be in the car at the same time. In addition, driving schools had to follow certain guidelines:

install, where possible, Plexiglas ventilation screens on three sides of the exam stations; hold extraordinary sanitation ...

1.4 The impact of the Russian-Ukrainian conflict

The outbreak of the Russian-Ukrainian conflict in February **** resulted in a general increase in the consumer price index, among other things. There is also a slight increase in the driving school sector, showing an increase of about * point between January **** and September ****. This means that over a period of ** months consumers faced a * percent increase for this type of service, which is essentially a positive value when compared to the price index increase in other economic sectors.

Consumer price index - driving schools Italy, ****-****, base ****=*** Istat

2.1 Constant question

A driver's license is an administrative authorization useful for obtaining a variety of benefits; specifically, it is noted that there are different types of licenses for as many different means of transportation. In order to obtain the license, it is necessary to take exams and practical lessons, which are useful for learning how to drive the means of transportation. Below is the value of monthly household spending on driving lessons, exams, licenses, and vehicle roadworthiness tests over the past five years; thus, a comparison of average monthly spending over the past few years can be made. It can be seen that this is a strongly thriving sector, so much so that there has been a steady increase over the years, with the only exception in ****(***). Significant growth of **.* percent is seen from **** to **** . Average monthly household expenditure on driving lessons, tests, licenses, and vehicle roadworthiness tests Italy, ****-****, in current &euro Istat Analyzing the demand from the point of view of tests taken over the years, we can see that from **** to **** the demand for this type of market has tended to be very high, with phases of decrease. In fact, in the time range analyzed, there is a first significant ...

2.2 Factors influencing demand

As has been extensively mentioned, a driver's license can only be obtained after taking the exam, which can be taken privately or through driving schools. Choosing to take the license privately offers the following advantages:

lower driving school costs (***); lower driver's license fees (***); autonomous management of study time and quiz exercises.[***]

Despite the advantages stated above, in **** the consumer's choice falls more on driving schools(***).

Examination tests **** Italy, ****, % Patente.it Analyzing the number of exam tests taken privately or through driving schools over the years shows that the choice has always fallen mainly on driving schools.

Examination tests (***) Italy, ****-****, number of exams Patente.it

Another factor determining theincrease or decrease in consumer demand for driving schools is certainly related to the number of candidates who do or do not pass the exams on their first attempt. In ****, the percentage of failed candidates in the driver's licensetheory exam represents a not totally low figure of around ** percent. As for thepractical exam, on the other hand, the percentage of those who failed the exam during the year decreases, standing at around **.**%.

Theoretical and practical exam outcomes Italy, ****, % Patente.it

2.3 Distribution of monthly expenditure

This market is in high demand within the national and European context. In fact, the average monthly expenditure per household for driving lessons, (***) tests, licenses and compulsory roadworthiness technical checks is strongly high in Italy. Specifically, the macro area with the highest value for the expenditure item considered is Central Italy, with a value of €*.** current. This is followed by the North with an expenditure that is *.** percent lower than in Central Italy. The lowest value is recorded in Southern Italy.

2.4 Profile of new drivers

Another interesting aspect that allows for more construction of the dynamics that make up demand is the analysis of consumer type. Below is a useful table to know the nationality of holders of driving licenses issued in **** in Italy.

Licenses issued after the driving test: holders born abroad

Analyzing, on the other hand, the age of holders in ****, it can be seen that the largest number of new license holders belong to the Under** age group (***); the remaining ** percent is made up of the **-** age group and *.* percent by those in the **-** age group.

Licenses issued after driving test: age groups Italy, ****, number of units Patente.it

3.1 Geographical distribution of the market

In **** , there are *,*** active driving schools in the country; analyzing the value of active driving schools by macro-region, it can be seen that the highest number is rooted in Northern Italy, accounting for **.* percent of the total. Center and South account for **.* percent and **.* percent, respectively.

The number of active driving licenses on the Italian territory is a useful indicator for understanding the reason for a given geographic distribution of vehicles by region. In fact, Lombardy represents one of the regions with the largest number of self-drivers (***).[***]

Active driving schools Italy, ****, number of active units Patente.it

Since no updated information is available for **** in the Istat database, the data provided by Patente.it is placed for ****. Specifically, it is noted that the value of active driving schools remained almost relatively constant until ****. **** shows a percentage growth of **.* percent over the previous year. Dwelling, however, on the value of growth by considering the first available value(***), an increase of **.* percent is noted. Active driving schools Italy, ****-****, in units Istat Analyzing the legal form of active driving schools in the national scenario, the form "Individual entrepreneur, freelancer and self-employed" accounts for almost half of the total, gathering **.* percent of the activities. ...

3.2 Compulsory vehicles for driving schools

In the face of EU dictates enacted in ****, each driving school must have the presence of specific vehicles for each type of license in order to ensure practice and examinations. The "presence" of the vehicles can be manifested in various ways, either through ownership by the driving school itself or through availability, i.e., concession by a third party for a fee or not. All the details were set out in Decree ***/****, which has been appropriately updated following regulatory changes at the European level.

According to the decree, the only vehicles that can be made available by a third party are those for the special categories: B*, BE, B** and C*, C*E, D*, D*E but vehicles in categories BE, B** and C*, C*E, D*, D*E must also have dual controls, an obligation that also applies to private drivers.[***]

3.3 Main players in the industry

Based on the value of last year's turnover, an overview of the major players in the industry is proposed.[***]

Autoscuole S.A.L. is a company located in the province of Ravenna, with branches in various municipalities such as Lugo and Bagnacavallo. It offers a range of services including theoretical and practical lessons for obtaining different types of licenses, including nautical licenses, and services related to civil motorization such as transfer of ownership and vehicle registration. The company also offers insurance services through the company Sara Assicurazioni, and is authorized to carry out inspections of motor vehicles, motorcycles and mopeds at its Lugo location. AU.RA. Autoscuola Ravenna is a company with ** locations in the province of Ravenna, offering a variety of courses for obtaining driver's licenses and professional certifications. It offers services such as **-hour driver's license renewal, support for foreigners, courses for the disabled and deaf and dumb, and foreign license conversion. Their locations work synergistically to provide support and advice to clients, with the possibility of transferring classes or the path to a driver's license between locations at no extra cost. Autoscuola Centauro, with more than ** years of experience in the province of Lecco, offers courses for obtaining ...

4.1 Driving school services

A driving school is concerned with training and preparing individuals to obtain a driver's license. It offers theoretical lessons on the principles of driving and the rules of the road, as well as practical driving lessons under the supervision of qualified instructors. Some driving schools also offer specialized courses, such as training for professional licenses or safe driving courses. In addition, they can assist with license renewal and other paperwork related to driving and vehicle maintenance.[***]

The exam is based on passing a theoretical exam and practical training.

Intended to examine all the rules of the Highway Code; The purpose of which is to test the driver's ability to prepare for safe driving and behavior.

Driving schools generally offer group courses to train candidates for the theoretical exam, as well as private driving lessons with an instructor to prepare for the practical part of the exam.

4.2 Types of permits

There are different types of driving licenses, an initial segmentation is possible between two main categories

Lower licenses : for motorcycles and automobiles (***); Higher licenses : for transport vehicles, C* and C for truck drivers and D* and D for bus drivers (***).

We can add the E license, which does not appear as a full-fledged driving license category, but as an extension of existing categories. The letter E after obtaining a lower or higher permit allows the transportation of trailers and semi-trailers[***].

4.3 Total cost: determinants

The price of a driving school subscription is based on two types of services offered-as mentioned earlier, theoretical and practical preparation. In general, theoretical courses require a fixed upfront payment while driving lessons are based on an hourly amount.

Therefore, we can identify two different cost factors: fixed and variable. Fixed costs for obtaining a B license refers to the bureaucratic costs involved in opening the application file at the DMV and the costs for medical examinations. There are two compulsory medical examinations required to obtain a driver's license: a general one, aimed at certifying the individual's state of good health, and a specific one, certifying his or her visual abilities.[***]

These, then, are the fixed expenses to be incurred:

theory and practice exam registration: €**.** (***): two of €** to current account **** and one of €**.** to current account ****; ** € for the medical history certificate issued by the general practitioner; ** € for the eye examination; ** € revenue stamp; */** € for two recent passport photos (***).

Should one take the exam privately, the costs would be:

** € to buy a theory manual ; *** € to take the * mandatory guides; *** € to rent a car with dual controls, suitable for taking the practical exam (***).

On the other hand, in the case of taking the ...

4.4 Car-pooling: obstacle for the driving school market?

Car-pooling is a phenomenon that is spreading strongly in Italy, registering more than thousands of certified trips and helping to reduce the number of cars on the roads (***); this could have an impact on the future of the car industry and the market for driving schools, since if the service comes to be totally efficient, this could disincentivize individuals from licensing themselves. According to a Deloitte survey on carpooling, a substantial percentage of respondents believe that carpooling could be an alternative to car ownership. Italy stands out among the top four countries, with ** percent of respondents agreeing with this statement[***].

Carpooling is considered useful for several reasons:

traffic reduction: helping to reduce the number of vehicles on the road can reduce traffic, especially during rush hour; economic savings: given by sharing fuel costs; environmental benefits: given by reducing the number of vehicles on the road.

Impact of the pandemic on service

The pandemic has greatly affected the development of the corporate car-pooling industry, reducing the possibility of increase in recent years. There are, however, factors that will influence the industry's recovery:

corporateconfidence in this tool (***); public funding measures; need to contain mobility costs for end users.

Corporate Car-pooling Trips Italy, ****-****, ...

5.1 Regulations for driving schools and licensees

The main information regarding this market is contained in Ministerial Decree No. *** dated **/**/****:

art.*of the Decree concerning the activity of driving schools states that: driving schools may carry out, in addition to the activity of teaching driving, as provided for inArt. *** of the Regulations for the Execution of the Highway Code, also all those practices necessary for the attainment of fitness to drive and for the issuance of licenses and documents of qualification and professional qualification, including related certifications and as well as all other practices related to driving licenses, as provided for in Articles *, * and * of Law No. *** of August *, ****.

In ****, the Legislative Decree was slightly amended by Ministerial Decree ** /**/**** , No. **.

Introduction of VAT

As of ****, the Court of Justice of the European Union has ruled that guia school lessons are not included under the heading "School and university teaching" and therefore are not subject to exemption from VAT. Therefore, as of September *, ****, the activity of guia schools and related services are subject to the ordinary VAT regime, i.e., they are always subject to the standard rate (***).

Opening a driving school business

With the introduction ofArticle ** of Legislative Decree No. */****, the restrictions provided until a few years ago ...

5.2 License renewal

Renewing a driver's license is an obligation from which no motorist can exempt himself. Renewal deadlines change according to different age groups; if there are no unusual events that cast doubt on the motorist's ability to drive, it is mandatory to undergo the update:

Type A and B

Every ** years until the age of **; Every * years between the ages of ** and **; Every * years after the age of **; Every * years after age **.

Type C

Every * years up to age **; Every * years between ** and ** years of age; Prohibited after ** years of age.

Type D

Every * years up to age **; Every year between ** and ** years of age; Prohibited after ** years.[***]

OSAS and validity of driving license

Following the approval of European Directive No. ****/**/EU, checks have increased in Italy toward all potential motor vehicle drivers with various disorders and/or suspected OSAS (***). According to the regulatory text, such disorders drastically reduce the ability to pay attention behind the wheel, for which reason there is a reduction in the validity of the driver's license. Specifically:

one year, for drivers of Group * - vehicles of categories C and D; three years, for drivers of group * - vehicles of categories A and B.[***]

Epilepsy and fitness to ...

6.1 Segmentation

• AUTOSCUOLA CENTAURO
• AUTOSCUOLA SAL
• AU.RA S.R.L.
• Furia 1935
• Cooperativa Autoscuole Reggiane