How Skymeter got started

I am often asked where the idea for Skymeter came from.

The idea occurred first in the spring of 2002. I was speeding mindlessly and got a ticket. That how I get all speeding tickets since I turned 35. I imagined a device that was loaded with speeds by road segment that bleeped when I was going over by an enforceable margin. A private, automatic back-seat driver that would work even when my wife was not with me. Within 2 weeks, I had concluded that the number of people who speed mindlessly and would be interested to purchase this device would be minuscule.

By then I had received a parking ticket on Queen Street East after leaving my lunch guest at a restaurant to feed my meter. I was maybe a minute late (the clock on the meter was fast). I was soon hooked on the idea of a parking meter that completely wiped out current parking payment management practices, including tickets. This was simply for convenience.

This parking ticket deeply set the idea that the way governments manage payment services for parking was wasteful and needlessly adversarial. It would take me another two years to find out how really abysmal the whole of parking management was - especially in North America.

While working with a colleague in the fall of 2002 to understand how well a modified (moving average) Garmin positioning device with added store and forward might act as a parking meter, he commented: "why not use this for road pricing?" I was frankly surprised at the idea. He pointed out that Europeans were poised to do this, and when I looked into it that evening, found that the London Congestion Charge was due to start early in 2003 by deploying a hideous complex and expensive system, that would have me leave Toronto were it to be deployed here. I immediately started to design a system that would do both parking and road pricing. I renamed my IT consulting company to Applied Location Corporation and called my product Skymeter.

In October of 2003, I met the first of many transportation economists I would befriend. He taught me two things: pay-as-you-drive insurance was a third and critical vehicular payment service and road pricing was essentially agreed among transport economists and likely inevitable. His advice was to concentrate on the technological enablers and not to worry about explaining the necessity of road pricing.

In 2004, I applied for a patent for a three-in-one payment services system for road-pricing, parking-payment and pay-as-you-drive insurance. Skymeter Corporation was formed in late 2006 based on all of the R+D done by Applied Location to that point.

Blogs on the Dutch decision to proceed

Robin Chase: Holland first city with distance tax (its a charge, not a tax!)
Clean Break: Dutch pursue idea of cross-country road pricing
Greg Mankiw: Netherlands joins the Pigou Club
Worldchanging: Netherlands Plans Massive Road-Pricing Scheme
Stephen Rees: The Dutch Introduce Road Pricing
Centurean2: Oppression Watch: Road Pricing In The Netherlands
Financial Times: Dutch propose full-scale road pricing system

This one ended on an odd note: "Getting the technology right could prove challenging. Germany’s lorry-charging scheme was delayed as the satellite system that it chose became confused by tall buildings."

That system used technology from well over five years ago and is no longer a problem. The technology to be used in Holland will be at least a two full generations ahead of that earlier technology.

even a car-review magazine: Road charging going Dutch
AutoCar: Holland launches road-charging

One of the comments on this last one is interesting:

"This kinda worries me because if it does actually work the British government would introduce it in our country, only to make a complete hash of it."

This tells me there is at least one Brit who thinks it might work, but assumes his government can't figure it out. I assumed that no one made that kind of subtle distinction in Britain anymore, and that like Peter Roberts "no" has no flavors.

and according to the Dutch Ministry of Transport, Public Works and Water Management --- GNSS Road Pricing will be used.

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When you read a lot of articles, reports and blogs and browse the comments to many of these, you can sort all of them into one of four intellectual camps:
Conspiracy (Governments are greedy or incompetent)
Status Quo (Just increase the gas tax!)
Panic (Charge vehicle mile traveled ASAP; tends to happen in US mostly)
Market (Charge distance by time and place of consumption)

Will Green Innovations in Canada benefit Canadian Investors?

Skymeter has been named among Corporate Knights' Next 10 Emerging Leaders list for 2009. This is a ‘cleantech’ list.

According Alia McMullen of the National Post ("Startups to Watch", Financial Post 2009.11.23), Skymeter’s CEO, Kamal Hassan is looking to raise money offshore.

On the same page of the same issue of the Financial Post, Rick Spence opens his article (“VCs are looking for great ideas”), with “Equity financing has never been easy to source in Canada. But now it's getting worse.”

Make sense to you?

Privacy will dictate the architecture of GNSS road-use metering systems

One of the protests most frequently offered for not wanting to use positioning satellites to toll our roads is the assumption that cars will be tracked and the perception of considerable loss of privacy that would entail. Any journalist will tell you this. While it is technically possible to build such a repugnant system, few would tolerate it.

It can be argued that it is neither useful nor sensible to build such systems that way. But there are two perfect reasons this will not happen. First, in most countries, such a system would be so unacceptable to drivers that it would be boycotted or vandalized to an extent that it would become unreliable and perhaps even inoperable as a financial system. Second, most of these same countries are in the process of adopting policies that will not permit tracking of private vehicles, using road pricing data for any purpose other than intended, or retaining such data once payment is settled, which in the case of a prepaid account would be instantaneous.

The International Working Group on Data Protection in Telecommunications (IWGDPT) has been addressing this for some time. Founded in 1983 in the framework of the International Conference of Data Protection and Privacy Commissioners, the IWGDPT formulates recommendations to improve the protection of privacy in telecommunications. The Sofia Memorandum, issued at the 45th meeting of the WG in March 2009 directs its guidance toward road pricing.

The WG made the following

"recommendations designed to protect the privacy of drivers and owners of vehicles:

• The anonymity of the driver can and should be preserved by using the so-called smart client or anonymous proxy approaches that keep personal data of the drivers under their sole control and do not require off-board location record-keeping.
• Road pricing systems can and should be designed so that the detailed trip data are fully and permanently deleted from the system after the charges have been settled in order to prevent the creation of movement profiles or the potential for function-creep.
• Processing of personal data for other purposes (e.g. pay-as you drive insurance or behavioral-based marketing), should only be possible with clear and unambiguous consent from the individual.
• In terms of enforcement, the system should not ascertain the identity of the driver or owner of a vehicle unless there is evidence that the driver has committed something which is defined as a violation of the road pricing system."
  

Miroslav Marc, member of ISO/CEN standardization committees dealing with road use charging, explains: “IWGDPT opinions are not legally binding nor is that intended. They are formal recommendations. The Sofia Memorandum, however, is not just a European document, but an international one, since IWGDPT members come from around the world. The weight of these recommendations is reflected in the respect for the institutions that adopted them.”

Privacy Commissioners in several countries have indicated that they will promote these recommendations. Natasa Pirc Musar, the Slovene Information Commissioner, issued a similar opinion, prior to the IWGDPT guidance, stressing that data can only be used for the purposes stated and must be managed according to the criticality of the need (“principle of proportionality”). Her opinion: Personal data (including location data) is to remain exclusively under the surveillance of the user.

Marc also pointed out that “Peter Hustinx, European Data Protection Supervisor (EDPS), issued his opinion on the European Commission's proposed plan to accelerate and coordinate the deployment of ITS in road transportation in Europe based on guidance of the Sofia Memorandum.”

In paragraph 45 under Safeguards for the use of location tools for the provision of ITS location-based services, The EDPS states:

"The use of location technologies is particularly intrusive from a privacy viewpoint… As was stressed by the Article 29 Working Party, the processing of location data is a particularly sensitive matter involving the key issue of the freedom to move anonymously, and which requires the implementation of specific safeguards in order to prevent surveillance of individuals and misuse of the data."

It is doubtful that any country will permit GNSS telematics that do not provide extreme privacy protection, even anonymity – i.e., likely disallowing methods to permit location data to leave the vehicle without driver/owner control. Brazil’s Federal Government (Seventh Circuit Federal CIVIL ACTION PUBLIC Autos) recently made it illegal to mandate tracking-enabled telematics.

All of this means that thin-class telematics (that forward location information to a data centre for processing) for road-user charging will likely have little market excepting possibly for commercial vehicles. The task, now, for road-use telematics designers is to make fat devices (that determine a bill on-board) cheaper.

Foot in mouth is not DesRosiers’

In a Globe article 2009.11.17, Jennifer Pritchett offered a neutral-to-positive story on the technology to address the pending shift from fuel taxes to road-use-charges. The 20 comments were 60% pro road-pricing, 40% against.

Analyst Dennis DesRosiers of DesRosiers Automotive Consultants Inc. offered what other readers thought was a negative, almost calloused comment. It was so badly received that he managed to have it removed, leaving only copies in other’s comments.

"These kinds of [road tolling] technologies make [transportation] more efficient, I don't deny that, but if governments collectively want to protect the 900,000 to one million jobs in the automotive industry, they also have to accept that we need more vehicles, not less ... I'm against road pricing… We need consumers to drive more, not less."

I read his full original, it was brutally honest. His comment was lambasted by a couple of others. But DesRosiers is in every way correct. He has a right to an opinion that it should not be done (in fact he agrees it would be effective). His critical point, however, was “if governments collectively want to protect the 900,000 to one million jobs in the automotive industry…”

DesRosiers is on to something. He's uncovered the REAL problem. It is not “privacy”. It is not “equity for the poor”. It is not “because we already pay fuel tax”. It is not even that about a third of readers don’t understand market economics, which DesRosiers clearly does. The problem DesRosiers points to is that the government is tripping over itself. The Ministry of Energy is promising that Ontario Power Generation will be ready with the electricity for the presumably-pending electric vehicle. The Ministry of Industry is promising (and investing) in saving automotive jobs. The Ministry of Revenue refuses to raise gas tax. The Ministry of Transportation is refusing to toll roads, while insisting that Metrolinx figure out the missing $38B to fix our egregious transportation (cars, transit and bikes) system.

Fleet electrification plus government money artificially pumping out more and more cars will accelerate the pressure on our roads -- both lack of funding due to the withering gas-tax and congestion as a consequence of the government's DesRosierian Economics. And on my car radio this morning, as I waited for three light changes to get through one intersection, I listened to a report that Canada has its greatest debt ever and another story about global warming.

Who are the biggest losers in all this? You are. You are stuck in filth and traffic whether on bus, bike or car because government Ministries are uncoordinated and isolated from each other, each with their own bacon to save. And which Ministry loses for lack of coordination? They all do.

If you want to use your car ten years from now, you should ask for road pricing to reduce congestion. If you want to use transit 10 years from now you should ask for road pricing to double your service. If you want to use a bike 10 years from now you should ask for road pricing to open up room for bikeways. If you want to telework 10 years from now you should ask for road pricing so your employer can better justify your not spending time and money to drive to the office (your employer respects your money, but discounts your time). If you want a greener city 10 years from now you should ask for road pricing that varies by engine type.

And, if you really hate government so much, you should ask for road pricing, and then never drive again. If you really think it is all a big tax grab, why not just starve them out?

Accessibility vs mobility

Sometimes a short film is better that a blog. Jane Jacobs talked about removing road space making traffic disappear back in the 60s. That's 50 years ago.

The anthropologist and the road pricer

At a recent road-pricing conference here in Toronto, after hearing some eight presentations about congestion-pricing and road-pricing, a woman stood up to express a concern that we were overly focused on only one small issue. That we ought to look at broader issues of planning and sprawl - the really big contextual issues that threaten us.

I followed her comment by asserting that road pricing was in fact the keystone to most of these things and that solving this will open up enormous possibilities throughout her list of broader concerns. In fact, I assert that many of these things she was concerned with are symptoms of the wrong economic model for paying for roads.

I spoke with her afterward - Professor Judith Nagata, with the Anthropology Department at York University. She introduced me to David Owen's book, Green Metropolis. It looks promising.

Changing the we pay for using cars will be one of the most important shifts of the 21st century. At least as important as Henry Ford's assembly line. It has engineering, transportation, urban planning, economic, public health, livability, safety, social equity, sociological, employment, commercial, transit, military, geo-political, climate change, and many other implications. It is not surprising that an anthropologist would take an interest.

More Big Brother Errata

This morning, the Globe and Mail printed a story about Skymeter that left out a critical detail.

Road-use metering technology (such as Skymeter's) is constrained to be "Location Anonymous", by compliance with the Sofia Memorandum from the International Working Group for Data Protection in Telecommunications (IWGDPT). Location data are not permitted to exit the vehicle. All charges owed are calculated on-board and only the billing data may be forwarded from the device. It is in fact more private than E-ZPass or 407 transponders and cameras. We are forced by law to NOT provide or permit a method to "see" where a vehicle is. To do this reliably while blocking fraud and tampering forms the bulk of our innovation over the past seven years. Unfortunately, this fact is never passed on by journalists. We are not sure why. Perhaps because such privacy protection is good news. There is no Big Brother. There is only paying for what you use.

OECD is Not New to Road Pricing

The recent OECD report about Toronto, that only a few of us can read since it is unavailable to non-accredited journalists until 2010, has generated a mini-furor among Toronto's free-road driverazzi, who think their gas-tax pays for Toronto's potholes (I mean roads) and are all sure the gummint will take their money but not fix anything.

To the OECD's credit, they defended Road Pricing awhile back in January 2002.

Contrary to some sceptical voices in the car lobby, road pricing is not an attack on car use, but rather a way of enhancing it. If there is an enemy of the car industry, it is inefficient congestion.

Why does the OECD see what we resist?

2009.11.10 Today, the Globe’s Brian Fenlon and Post’s Natalie Alcoba reports some sharp criticism for Toronto from the Organization for Economic Co-operation and Development (from a report commissioned by the City). Bravo! Someone to tell us like it is!

But why do we need to pay an external body to tell us we have “one of the highest rates of car use among cities in the organization's 30 member countries” and that “the Toronto region should consider measures such as toll lanes, local fuel and parking taxes, and a Singapore-style congestion charge in which roads in the city centre and major routes such as the 400-series highways would be subject to fees that vary according to peak hours”? We know this, don’t we? Or perhaps like a case of a person in the next cubicle with a body odor problem, we need someone else to deliver the message.


The Globe article reports one of the OECD’s findings as “our region lags on innovation indicators such as patents, citations, high-tech employment and entrepreneurship… Governments should invest in more initiatives like Toronto's MaRS Discovery District.”

Now that cuts a bit close. A firm called Skymeter is in MaRS. They have developed several patents there. In fact those patents permit Ontario to solve the aforementioned “congestion charge” that would allow road-use fees to vary according to peak hours and well as cleaning up our parking problem. They have entrepreneurs and hire high-tech staff. I am one of them. And some 15 countries and cities are studying this Canadian-innovated and Canadian-made technology. Only innovations like Skymeter’s can prove the OECD wrong.

A CBC report.
And another.

OCED review.
Another OECD review.

They’re not getting it

Earlier in November 2009, I was a guest on a talk-TV show, Goldhawk Live (Rogers). The host Dale Goldhawk, posed the question: “Road tolls: are you for or against?”

There were two live guests, myself, an advocate of pricing all road-use at the marginal rate needed to manage congestion, and Jim Kenzie, a respected and awarded automotive journalist and car racer. Mr Kenzie is not an advocate of road tolling.

Mr Goldhawk also pre-arranged two phone in-guests: Marty Collier a local transport consultant and long-time road pricing advocate who runs an annual conference here in Toronto, and Economics Professor Harry Kitchen, author of "Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives," (2008).

Clearly, the guest deck was stacked three to one against Mr Kenzie.

When asked to explain the new-generation tolling technology, I briefly explained that it metered all road use and parking use, compared that use to an internal database of charging information for the purpose of road tolling, parking payment and pay-as-you-go insurance. I explained that location information was not permitted to leave the vehicle and that the device I had brought to the show shielded privacy to conform with international data privacy standards, which demand that location data not leave the vehicle.

Mr Kenzie’s position was the usual “we already pay way too many taxes, this is just more government intrusion that is no different than ‘big brother’ ”. He also pointed out that automotive emissions were so little that they should not be considered further in the global warming issue. Then he said that gas tax should absolutely be raised, contradicting his comment re “way too many taxes” only a minute before.

My position was that all roads should be tolled at a few cents per kilometer to replace fuel tax and to manage congestion and emissions. That long trips should pay more than short trips, and that peak-hour trips would cost more than non-peak-hour trips. I also criticized tolling “just the Don Valley and the Gardiner” as that forced people commuting from East and North East to pay (for example) $8 subsidizing those using the 401 and 427 (for free) coming from the North West. (I did not have a chance to describe the mess this would make of traffic on parallel streets and arteries.)

Mr Collier’s position was that road tolling (as well as pay-as-you-go insurance) was important for people to become conscious of the costs of their travel choices, that pay-as-you-go transportation sent ‘pricing signals’ to commuters, some of whom would make better choices thereby benefiting everyone, including those who continued driving on now-less-congested roads. (While this is an accurate description of the use of tax structures to influence choice – another example is tobacco taxes – this seemed to go over the head of at least one caller who resorted to describing Mr Collier as a “ding-dong”.)

Prof. Kitchen pointed out that he has been a long-time advocate of road pricing and that road tolls are increasingly critical to transportation funding. He says this with some authority, since he is one of a handful of respected Canadian academics that have written extensively on the subject.

By my recollection, the callers were split about 50/50, and a concurrent web-poll was 64% pro road-tolling, a surprising result since prior to a road pricing deployment, a population is usually about 30-40% pro-pricing.

What did you say?

Several of the callers agreed with Kenzie by repeating the usual: “I don't like tolling – just raise the gas-tax”. About this, I make two observations. First, more and more drivers are recognizing that there is a funding problem. A minority blames it on political conspirators who misspend; others, aware that the gas tax has not been raised in years, can understand why the problem is real.

Second, few people are able to grasp two key issues: (a) the fuel tax does not address congestion (Collier’s “pricing signals”) and (b) that increasing engine efficiency robs the tax base – i.e., green driving hurts road funding. The perfect illustration was a caller about ¾ through the show, who was explaining why raising the gas tax was the answer. I interrupting and said: “yes, but I have an all-electric car. How long are you willing to subsidize me?” He paused and said: “Oh, well, that's a different matter. Maybe your system will be needed for that.”

I was taken off-guard by Kenzie’s response to that: “The problem is all these efficiency standards. The government should force all vehicles to get 10 miles to the gallon or less”. I hesitated to point out that such a step would multiply fuel costs per kilometer by about 250% whereas the road tolls that Collier, Kitchen, and I are describing would cause an effective per kilometer increase of 20-30%. I suspect that Kenzie did not mean what he said, knowing it was absurd. Rather I sensed that he realized that the diversification of power plants and the specter of low-cost, self-generated electricity mooted all his arguments, and that he probably spoke more in anger than in jest.

I do not think that most people have the time or patience for arguments about pricing signals and using taxes to flatten peak-hour travel. But I do think drivers of internal combustion engines will start to ask for a new, altered or complementary tax-structure for greener vehicles as soon as fleet electrification reaches, say, 5 or 6%. Crediting politicians with greater than average intelligence, I think they will see the problem at 3 or 4%.

Why? Because a 3% drop in vehicle miles travel bankrupted the Highway Trust Fund in the US during the recent recession, and has sent the US into a flurry of interest in road-tolling to close this funding gap.