Road-user technology offers U.S. states alternative to the gas tax

If America is to combat climate change, congestion and dwindling revenues for its roads, it needs to welcome new models of road-user charging.

Americans drive. In fact, they covered more than 3.2 trillion miles — on more than four million miles worth of roads in one year alone. In addition to people, over 70 percent of the nation’s goods journey across the United States’ road network every year. This transportation system is foundational to the livelihoods of millions of citizens and the broader economy.

Today, roads are largely paid for through the gas tax. These revenues, taken by federal, state and local government at the pump, are redistributed nationally to support the maintenance and operation of roads and mass-transit systems.

Gas tax receipts have fallen in recent years as some turn to hybrid and electric vehicles that consume less gas or none at all. In a country where more than 43 percent of public roadways are in “poor or mediocre” condition¹, revenue generated from the gas tax can no longer keep pace with the investment needed to maintain the nation’s transportation system. A recent study forecasts that by 2031 less than half of transportation will continue to be funded by the gas tax, compared to what is available in the Highway Trust Fund today.²

With growing imperatives to cut congestion and greenhouse gas emissions caused by transportation, a new approach to funding our transportation system is required.

Charging drivers per mile

Advanced technology, coupled with the urgency of securing long-term funding models and incentives to bring the trillion-dollar Infrastructure Investment and Jobs Act (IIJA) to action, have come together to create fertile ground for rapid growth. The IIJA has provisions for research, technology and innovation. It also includes funding for a national pilot on user fees per mile driven.

Oregon, recognizing the future solvency issues of relying on the gas tax, launched the nation’s first road usage charge system in 2015, Oregon Department of Transportation stated: “This new funding model weans us off fossil fuels using a modern, technology-based solution that combats climate change while assessing drivers fairly for their road use.”¹

Several states nationwide, from California to Utah and Virginia, have also developed road usage charge pilots that count the miles traveled and assess a driver’s fee per mile utilizing a variety of technologies. Drivers upload their data through a selection of systems, from pay-as-you-go using GPS, to quarterly post-pay facilitated by information uploaded from the car. There are also non-automated approaches such as submitting a photo of an odometer reading.

Adoption challenges and benefits

Technology alone will not be sufficient to drive a widespread adoption of new funding models. Setting up programs nationwide takes cooperation and planning in the deployment of infrastructure and technology, as well as support from drivers and other influential groups.

The first significant challenge is consumer acceptance. The gas tax is currently hidden from sight as drivers pay at the pump. For most, its existence is either unknown or long forgotten and broadly uncontentious. A per-mile charge brings the cost of road use into plain sight in the form of an expense linked directly to miles driven. Few new user charges are instantly popular and, in some cases, require legislation to effectively implement. That said, where such alternatives have been introduced, like in Oregon, they have drawn understanding and interest from road users.

Benefits need to be clearly communicated to encourage acceptance of the new system. In many instances, road usage charges can be more equitable than a gas tax, which by its nature collects more revenue from people driving older, less fuel-efficient vehicles than those in newer hybrid models.

Technology’s role

Today, more than 91 percent of vehicles sold are connected. LTE/5G connectivity enables data collection around distances traveled, locations, driving behavior and other information. Using this embedded connectivity to participate in a road user charge program will necessitate answers to many questions, including who the data belongs to and what they are able to do with it. Does the data in the car belong to the driver? Or to the car manufacturer or software companies who might then be able to extract further value from it?

Data distribution to third parties is the subject of some commercial sensitivity and drivers need to be convinced that it is a worthwhile trade-off to provide their information in return for better service. Oregon Department of Transportation is again leading the way by piloting a process to evaluate how connected vehicles can participate in the road usage charge program.

Given that tolling enterprises are equipped with new technologies to detect vehicles, infrastructure capable of interacting with vehicle telematics systems, and a significant history and business structure to manage financial transactions and customer services, they could also be a significant participant in the deployment of a road usage charge program. At present, several studies and pilots are looking to integrate tolling and road usage charging to enable standards that support data sharing between systems. In fact, the Society of Automotive Engineers has developed a standard “that identifies the communications interface between road user, connected vehicle and tolling service provider to support road-user charging.”²

Policy and incentives can drive behavior change

Utilizing technology that interacts directly with drivers, several states are also engaging road usage charge programs to encourage change. Congestion and air pollution, for example, can be remedied by dynamic charging which can help manage demand and encourage travel during non-congested periods or carpooling. Road usage charge program technologies could build on a model deployed in Tennessee where an app-based program pays people per mile traveled in carpools or on transit. An additional benefit of these programs could be more equitably delivering mobility-related assistance, such as reduced fees for qualified individuals.

Today, both Utah and Oregon provide incentives in their programs, in some cases highlighting environmental benefits, and in both emphasizing the fair and equitable approach that road usage charging brings to funding the transportation system. In Oregon participants using combustion engines earn fuel-tax credits. In Utah, where the program is only for electric vehicles at present, a 1 cent per-mile charge replaces a flat vehicle registration, with the state promising: “You’ll never pay more in the program, but you may pay less.”

Global expertise

Keeping America moving encompasses challenges from climate justice to social equity, feasibility to public outreach and so much in between. Our extensive global experience in tolling and user-fee practice, policy development and implementation, as well as our physical and digital design integration, enable us to accompany our public authorities and partners on this essential innovation journey.

We’re working with transportation authorities and other key partners around the world to stimulate action. We’ve helped facilitate cordon pricing in London, visitor toll tags in Florida, and recently helped to deploy express lanes and user fee infrastructure on the vital route between San Francisco Airport and Silicon Valley. Today, we’re working with California to deploy its latest road charging pilot, facilitating actual payments between road users and the state. As designers and deployers of world-class user payment systems, we’re using technology to build and fund the smarter, safer and more efficient transportation systems of the future enabling a climate-friendly tomorrow.

[1] https://www.oregon.gov/odot/programs/pages/orego.aspx

[2] https://www.sae.org/standards/content/j3217/r/