Paul Bedford’s Road Ahead

I am encouraged that someone of the intellectual stature and reputation of Paul Bedford has the courage to put his name to the advocacy of road tolling.

Most complaints about this idea center on three areas:

Over taxation. No one ever wants to pay more taxes. Fuel taxes have largely gone to the general fund and governments now struggle to explain that the fuel tax is no longer adequate in volume or in structure (it is insensitive to congestion). While no one would argue that Canadian citizens are under-taxed, it is clear that Canadian motoring is mis-taxed. In other words, the wrong thing is taxed (fuel instead of road use) and the wrong people are paying some of the tax via property taxes and sales taxes. We who favor road tolls are asking for fairness and effectiveness by way of tax shifting. Would such a shift leave every motorist neutral with respect to taxation? Likely not. Some who can change travel times or modes will be better off, some who cannot or will not may be worse off. Will most citizens be better off on the whole? Absolutely. Every transit user, every cyclist, every pedestrian, every motorist who still travels in peak hours, every worker who would be permitted more telework, every citizen who breathes air. The way to be certain that motorists are not overtaxed is to remove or rebate fuel taxes if we expect acceptance of wide area road tolling.

Privacy. There is an automatic assumption that the use of satellite tolling automatically implies tracking or monitoring of motorists. This is based on the Hollywood assumption that journey data is sent from the vehicle to a central location for processing. Some systems can operate this way and such systems can be hacked. But few governments contemplating the use of GPS data would permit this. It is almost universally denounced in the EU and as we in North America get closer to using such systems (we are currently only at the stage of economic and social theory), you can be sure no trip data will be allowed to leave the vehicle. The expected solution is one of (a) payment at the vehicle with a smart card (full anonymity) or (b) movement of billing-data only from the vehicle to a payment center. Mandated, third party audits would be used to ensure this. So while absolute privacy can be provided technically, legislation must also be in place to prevent the use of location data from tolling devices to be used in any way except to settle tolling charges and to severely discourage hacking, including culpability on the part of any private operator who was hacked and can be found negligent based on regular security audits.

Government Trust. Many anti-tolling commentators seem not to trust that governments will use the revenues fairly or properly. Others are of the opinion that governments would themselves ignore privacy constraints. I am not an apologist for government trustworthiness, but there are other routes to ensure constraints regarding revenue use and privacy abuse. I also think the “government distrust card” is overplayed and that the real underlying issue is simple entitlement: “I am entitled to free road use, as were my forefathers” and “I am entitled to go where I want and with whom I want when I want without being observed.” Such commentators as these may be are simply dishonest. Free road use is an oxymoron to anyone experiencing frequent congestion. And the freedom to go when, where and with whom I want can be guaranteed in legislation, enabled in technology, audited in practice, and challenged in court. The day we cannot to that, we have a bigger problem than funding transportation.

There are a few other objections, such as we should just increase the gas tax, or we should build more roads, but these are simply amateur misunderstandings. The real issues that governments must address and that Mr. Bedford must face are the entrenched and real perceptions regarding tax-burden and privacy. If these can be addressed in a manner that a majority believe, then the distrust argument will abate and the natural intelligence of the market will prevail.

We are at the stage where a critical mass are able to see that pricing is coming. Our governments need to move toward education regarding tax-shifting (yes, we will need to remove or rebate some existing taxes), and must also promote privacy legislation specific to location information collected for road pricing. That foundation legislation is in place in Canada and in Ontario for over a decade. This legislation should be reviewed to ensure that we can use GPS for tolling and to ensure that said use cannot admit abuse.

Smart Mobility Metering

New technology often needs new vocabulary.

Once upon a time the toll booth was it. One day they started to be replaced by coin counters which were then replaced by Electronic Toll Collection (ETC) which is now being replaced by Open Road Tolling (ORT). The difference between ETC and ORT is that for ETC you have to slow down and be channeled into a lane to have your transponder read, but for ORT you can rip through at speed and if you don’t have a transponder you’re license plate will be read and you can pay a little later and likely a little more.

If you’ve been paying attention you know that something new is afoot – a way to meter your use of the road without those big metal monster-gantries reading your transponder (“tag” if you are European). This new technology uses GPS and a bunch of other techno-magic to provide satellite-based tolling, or GPS-based tolling. At Skymeter we call this class of highly-reliable GPS, Financial-grade GPS (FGPS), since it can produce evidentiary quality trip records in the event a motorist wishes to confirm or refute whether a certain trip was taken exactly as billed.

FGPS enables tolling anywhere – or better still everywhere – and that makes it the key to eventually ending the gas tax. (The gas-tax has several major problems: it cannot manage congestion, it is already diminished by fuel efficiency, and it will soon become further diminished by alternate fuels including the hybrid and the all-electric vehicle. It has other problems, but let's go with these for now.)

More interesting is the fact that FGPS permits the variation of tolls by place (roadway or area), time of day, day of week and type of vehicle. This introduces a way to protect the environment by tolling differentially by vehicle emission class, a way to reduce congestion by charging more during peak hours, and a far fairer way to fund roads than raising property or sales taxes.

In addition to all that fairness and greenness, FGPS enables automated parking payment and pay-as-you-drive insurance. These get high marks for convenience and yet more fairness. Pay-as-you-drive insurance also reduces congestion and increases road safety.

Even better, it is possible to reward drivers (say, with parking credits) when they do not use their vehicles during peak hours. So they’d pay lower tolls AND receive a reward.

Altogether these capabilities combine to form what we call Smart Mobility Metering, which is analogous to smart electricity metering or water metering and other simple supply-and-demand payment variation.

AND all of this is provided in a manner that keeps the vehicle and driver ID anonymous. We think that is equally smart.