DMV is one government department ripe for privatization/decentralization. We already have every high school giving driver’s ed and plenty of private driving schools. Just let them give the final tests and issue the licenses, then register the licenses they issue with the state.
The state can then just do spot checks to make sure they are validating peoples’ identities and testing properly, and if they fail, they lose the privilege of issuing licenses.
Then Kansas City is ahead of the curve because they already contract out the DMV Office to private business.