Here's an absolutely hideous story out of Alabama about cash-strapped towns, contract probation systems, and massive abuse of power. The basic story is that you can get fined for a lot of minor violations of traffic rules and such. And you can get additional fines for not paying the fines you have on time. In a traditional conception of the purpose of this setup, the point of the fines is compliance.
The rule that people who are caught driving without a license need to pay a fine is supposed to halt illegal driving, not be a source of revenue.
But some towns have started to farm the fines out to private firms, who promise the usual combination of efficiency gains and campaign contributions. This totally flips the script around to a situation where suddenly noncompliance is profitable, as it leads to escalating fines and human tragedy:
Three years ago, Gina Ray, who is now 31 and unemployed, was fined $179 for speeding. She failed to show up at court (she says the ticket bore the wrong date), so her license was revoked. When she was next pulled over, she was, of course, driving without a license. By then her fees added up to more than $1,500. Unable to pay, she was handed over to a private probation company and jailed— charged an additional fee for each day behind bars.
As with prisons, the basic issue here is that while you can contract out your criminal justice functions to a private company, there's just no such thing as a private criminal justice system. It's not like an airline or a parcel delivery company that could be run by the state or could be run by private shareholders. At the end of the day, a prison or a probation system is inherently all about the private coercive authority of the state. It's hard to make these institutions work well, but turning them into profit centers involves not even trying to accomplish the goals of a probation system.