RUC: Time for a Better Odometer

The report from the Congressional Budget Office was bad:

“CBO projects annual federal budget deficits to increase steadily, exceeding $2.5 trillion by 2034, assuming current policies continue. Per this scenario, the federal government is projected to borrow an additional $20 trillion over the next decade, the CBO estimates."

The assessment from the Penn Wharton Budget Model was worse:

“The United States has about 20 years to fix this debt/deficit problem—'after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt, whether explicitly or implicitly.'"

And Jeff Davis of the Eno Center for Transportation brought it all home as regards the Highway Trust Fund (HTF).

According to Davis' calculations: "Gas-tax revenue is shrinking at an ever-faster rate now than in previous years. Federal gas tax receipts are now projected to decline from $24 billion this year to less than $18 billion in Fiscal Year 2034."

Long story short, our crumbling highways will continue to crumble if a new HTF funding model isn’t found fast.? The jig is up for the HTF.? It will soon be the end of the road for the familiar gas tax.? Of course, “soon” is relative.

Electrification of transportation may be saving our lives from global warming and climate change, but it is simultaneously digging our fiscal grave – or, at the very least, not so slowly choking out the HTF.? The long-term vision is for widespread adoption of road-use charging (RUC) only currently in use in a handful of jurisdictions today.

RUC is just the glorified tollification of U.S. highways – i.e. universal application of tolling.? Tolls today are collected in a variety of ways including physical transponders, license plate readers, and mobile apps – or a combination of the three.

Transponders are tried and true, more reliable, and cheaper to manage.? License plate reading – which is often used in conjunction with transponder-based systems – is dependent on an easily read and available license plate.? Because of the potential for misreads or “fake” license plates and the need for human intervention, administrative costs are higher.

The Holy Grail of tolling is GPS-based tolling, which could conceivably eliminate the need for a transponder or plate reading but may also raise privacy concerns.? In essence, a connected car or a car connected to a smartphone app could simplify tolling for the transportation industry throughout the world as long as privacy concerns can be resolved.

One of the greatest challenges to widespread road-use charging (RUC) or tolling implementation is the manner of measuring miles and charging citizens.? The conversation now taking place in departments of transportation across the country and at the U.S. DOT is the inaccuracy of automobile odometers.

Based as they are on technology from the Greeks – measuring the rotation of wheels and axles – the current crop of odometers are anywhere from 4% to 10% “off” depending on the age of the car and the care of the tires.? This also means, of course, that speedometers have always been inaccurate – most auto makers will include a fudge factor in their devices to compensate for mechanically-based measurement recording faster speeds as a result of tire wear or pressure variations.

That’s right, all those usage-based or mileage-based insurance applications are based on a “lie” if they are relying on the on-board odometer/speedometer which are practically guaranteed to report faster speeds and greater distances than reality.? (This is why your Waze app and your car's speedometer are not likely to agree.)

Government authorities and citizens have zero tolerance for what will essentially be a taxation scheme based on faulty data. Something must be done.

One of two things must happen.? Either the automotive industry must adopt some sort of new standard for mileage and speed measurement in on-board instrument clusters, most of which are now digital, or shift mileage and speed measurement to GPS-enhanced on-board apps.

The good news is that none of this – particularly GPS-based tolling - is going to happen quickly.? This is a years-long process which will require prototyping and testing.? The reality is that car makers are likely to move more quickly in this direction than tolling authorities, which are notoriously slow to change.

Adoption of universal GPS-based tolling for RUC purposes will also require 15 states that currently have no road tolls to create this infrastructure from scratch.? For the 35 states that already have tolling there are multiple often incompatible tolling systems.

One company that currently works with all tolling authorities nationwide and has been testing GPS-based tolling is Verra Mobility.? In fact, Verra Mobility provides toll payment as well as titling and registration services for all rental car companies, which means Verra is not only interacting with all existing tolling authorities the company also has tied to all 50 state-level motor vehicle departments.? Verra’s tolling services are also used by most leading fleet operators.

Verra is currently working with auto makers to integrate toll payment with existing connected vehicle systems.? The promise of enabling GPS-based tolling via connected car systems could vastly simplify existing toll collections while setting the stage for a future likely to be defined by more widespread road-use charging.

Integrated toll payments will have the collateral effect of introducing more accurate speed and distance measurements in cars.? This, in turn, will be beneficial for more accurate assessments of battery range and performance as well as the state of tire wear.? Our electrified transportation future will benefit from being built on the firm foundation of properly measured speed and distance and GPS-enhanced location data and, presumably, an anonymized collection process.

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