The negative incentives in driver licence testing

My son has had a motorbike and his motorbike learner's licence for the last six months or so. Last week, he attempted the practical driving (riding?) test to move to a restricted motorbike licence. The test cost him $175, paid to the testing agency. The good part was that at least he could do the test riding his own motorbike, which he is familiar with. He was looking forward to the additional freedom that the restricted licence allows.

My son failed the test. Apparently, part of the practical driving test involves being able to maintain stable control of the motorbike while travelling at 100km/h. The person administering the test asked my son to ride along a straight road uphill. My son's 225155cc motorbike can only just maintain 100km/h on a straight flat road. It was never going to be able to do so on an incline, and it didn't. That's why he failed his test (although he also admits he didn't indicate when turning around at the end of a cul-de-sac).

So, now my son will have to attempt the test a second time. Unlike testing to get a car licence, the fee you pay does not include multiple attempts. My son will have to pay again for his next test. And because he may legitimately worry that his motorbike won't get to 100km/h in that part of the test again, he will need to use a bike on loan from the testing agency. The cost for that is $225.

What does this have to do with economics, you ask? I question the incentives here. The agency doing the testing benefits each time a driver fails the test, because the driver will need to sit an additional test at additional cost. That additional test means additional revenue for the testing agency. The agency therefore has an incentive to fail as many drivers as possible, to increase their revenue (and profits). I'm not saying that's what happened for sure in this case, but it's consistent with the incentives that the system creates.

And there are any number of ways that a testing agent can fail a driver. When I was young, I had two friends who both failed their restricted car licence test, because the testing agent leant over, honked the horn and waved to someone walking by. Because this was dangerous and the driver didn't prevent the testing agent from doing it, my friends both failed their test. At the time, we all just thought that it was messed up and that the testing agent was a bit of an ass. But again, it is consistent with the incentives that the system creates.

How could this problem be resolved? To some extent, it is now resolved for car licences. Unlike when I was young, the application fee for a car licence includes two tests (see here). If a driver fails their first test, they can sit a second test for free. With that system, there is little incentive for the testing agent to fail the driver, because having the driver come back for a second test costs the testing agency but provides no additional revenue. The incentive problem is alleviated. What I don't understand is why the system is different for motorbike and heavy vehicle licences, where drivers have to pay for every test.

Incentives matter. People will take advantage of a system that provides them with an avenue for additional gain, and the driver licensing system seems to do that for testing agencies. My son will no doubt pass his next licence test, but at significant extra (and possibly unnecessary, depending on how serious not indicating at the end of a cul-de-sac is viewed) cost. He won't be alone in this experience. Motorbike riders would be significantly better off if the system was changed.