IoT-based metering: Toll systems – What price the road?

Smart Business

IoT-based metering: Toll systems – What price the road?

Toll systems in use around the world are hopelessly stuck in the analog age. By using intelligent IoT-based metering governments might be able to keep pace with rising numbers of vehicles as ride-sharing and electric cars take off.

by Tim Cole

In 2013, the Austrian, German, and Dutch transport ministries agreed to work cooperatively to create a long highway corridor spanning the three nations – from Rotterdam to Vienna – that would test and implement cutting-edge safety and traffic management technologies.

Toll roads go back a long way and have existed for at least the last 2,700 years. Records show that tolls had to be paid by travelers using the Susa–Babylon highway under the Assyrian regime of King Ashurbanipal, who reigned in the 7th century BC. In 14th-century England, some of the most heavily used roads were repaired with money raised from pavage grants, a toll for maintenance or improvement of a road.

In early US history, many individual citizens would maintain nearby stretches of road and collect fees from travelers. Eventually, the toll leviers formed companies to build, improve, and maintain a particular section of roadway, and tolls were collected to finance the enterprise. These private “turnpikes” were soon owned by business corporations that built and maintained new roads for the right to collect fees from travelers. Turnpikes often left an important social and political imprint on the communities that created and supported them, but they seldom turned a profit.

Road pricing is more efficient than the typical indirect ways drivers pay for imposing costs on others, such as through taxes on fuel and on car ownership

There were three important phases of toll road construction in the US: the turnpike era of the eastern states from 1792 to 1845, the plank road boom of 1847 to 1853, and the Far West toll roads between 1850 and 1902. Political sentiment eventually turned against them, and the Federal Road Act of 1916 prevented the use of tolls on highways from receiving government money. The prominence of the toll way model increased further with the rise of the automobile, and many modern toll roads all over the world charge fees for motor vehicles exclusively.

Money for jam

In recent years, tolls have been used as a way to ease traffic jams in inner cities. In 2003 Ken Livingstone, then London’s mayor, introduced a system called the Congestion Charge Zone (CCZ). Motorists pay at least £11.50 a day ($15.56) to drive into the center of town. At first, the system seemed to work wonderfully: the number of cars entering Central London fell by almost a quarter but, since about 2012, the numbers started to creep up again. One reason is that delivery trucks and taxis are clocking up more miles within the zone. Another is the spread of bus lanes reserved for public transport – especially the famous red London double-deckers. Today, more time is being lost to gridlock than before the introduction of the CCZ. According to a report in the business magazine The Economist, the average vehicle speed within the zone fell from 32 kph in 2013 to 28.5 kph in 2016.

As a result, London is currently searching for a more radical solution for congestion control. In January the London Assembly, the city’s governing body, called for municipal authorities to develop a new system of road pricing that varies according to when, where, and for how long a motorist drives in the city.

Inner-city traffic problems: Despite the introduction of congestion charges, London's traffic slows to a horse and buggy crawl at the height of the ironically named rush hour.

Inner-city traffic problems: Despite the introduction of congestion charges, London’s traffic slows to a horse and buggy crawl at the height of the ironically named rush hour.

The idea of selling time on the streets isn’t really new: Singapore already has the world’s most comprehensive road-pricing system which is camera based. It plans to introduce a new GPS-based one in 2020. The system will use built-in global positioning systems in cars as well as smartphone signals to charge motorists more precisely. The Singapore experiment is being carefully watched by other authorities all over the world, with California and Oregon in the US already in trials of similar setups.

As The Economist notes, it’s not just about frayed nerves and lost time on the way home. ”Using prices to ration a scarce resource, such as space on busy roads at busy times, makes sense,” remarked the authors of a recent article on congestion avoidance (Jam Every Day, August 2017). Those who consume goods should pay for them, they argue. And they believe that road pricing is more efficient than the typical indirect ways drivers pay for imposing costs on others, such as through taxes on car ownership and on fuel.

Taxing cars or fuel doesn’t discourage motorists from causing congestion, which increases pollution and crimps productivity by delaying workers and deliveries, disrupting supply chains. Although congestion zones can help, they are blunt instruments. Road use pricing could be adjusted to penalize traffic flows during rush hours and offer incentives to drive during off times instead – and the systems could be made to work in real time. Taxes are unpopular, no matter what purpose they serve. Drivers would much rather “pay” by queuing than through road pricing. The Netherlands hoped to run a 60,000-vehicle trial of road pricing in 2011, on the way to rolling out a national scheme, but opposing politicians supported by motoring organizations fought so hard that the plans were dropped.

Governments need to bring their systems into the digital age anyway, because a major reason congestion in inner cities is growing is the huge success of ride-hailing and ridesharing models spawned by the Internet and IoT. Drivers for Uber and their ilk can ride all day inside London’s CCZ picking up fares, but are only charged once. On the other hand, typical commuters usually Inner-city traffic only use their cars twice a day: once to get to work in the morning and again in the evenings to drive home.

Things are going from bad to worse in a hurry

London is a good indicator of what lies in store for other urban areas. The number of private-hire vehicles that entered the CCZ at least once rose from 50,000 in March 2013 to 85,000 in November 2016. The number of licensed drivers rose from 67,000 to 115,500 over the same period. It can only get worse. Self-driving cars are set to join the stream of vehicles moving in, out, and around the most congested areas in the next couple of years. Most scenarios forecast a noticeable decline in direct car ownership as a result, with people preferring to call up a driverless car from Uber or others, which means that the number of car owners to tax will probably decrease as well. Even today, private-hire vehicles make up 38% of car traffic in Central London, almost double the share of traditional black taxicabs.

IoT-based metering:  Toll Systems - Traffic Singapore

Stop&Go in Singapore: Singapore has the world’s most comprehensive road-pricing system which is camera-based. It plans to introduce a new GPS-based one in 2020.

Economists point out that electric vehicles of the future will lower all governments’ tax revenues further. Owners pay no fuel taxes and, at least today, are often granted generous government subsidies. On the other hand, the call is out for authorities to help finance the basic infrastructure for e-mobiles, such as on-street charging stations.

A growing number of experts are calling for a way to pay the costs of car use that would be fairer than taxing fuel and ownership. Instead, they argue, governments should institute general road-usage taxes for all: a per-kilometer charge that would vary depending on the vehicle’s weight and how much pollution it emits. Owners of big, gas guzzling SUVs, for instance, would pay proportionately more than someone with a lowly Fiat Panda. Charges could also be adjusted so vehicle owners in densely populated areas pay more than suburb dwellers.

Technology will play a central role in the introduction of road pricing. As in any area of technology, prices will fall as systems mature and become more commonplace. Smartphones are ubiquitous today even in countries like Bangladesh or Brazil, where traffic congestion already reaches nightmarish levels and can only get worse. As automobiles and trucks increasingly connect to the Internet, it will become increasingly easy to track them, especially in conjunction with GPS satnav systems.

Singapore is showing the rest of the world the way here. It introduced paper permits to control access to its central zone way back in 1975. In 2008, the city-state went electronic. Every three months, the toll fees are adjusted to account for average speeds, so if traffic slows down, tolls go up automatically.

Pay-as-you-go, only now in real time

In 2020, Singapore plans to roll out a completely new system that relies on GPS signals. It will adjust the amount drivers pay depending on distance, time, location, and vehicle. It is hoped that this will reduce the need for camera-bearing gantries that spot vehicles driving in and out of the downtown area. It will invoice drivers in real time, sending notifications about the amount deducted from their bank account or credit card as well as traffic information and tips on how gridlocked areas of the city can be avoided.

In the United States, there are at least two major road-pricing schemes being implemented currently. By far the most ambitious is Orego in Oregon, which kicked off in 2015 and now has around 1,500 subscribers. Drivers have devices fitted in their cars that take data from their engines’ computers. The gadgets record the distance driven and the amount of fuel used, and transmit the data via mobile networks. Motorists are charged based on how far they drive, with each mile costing 1.5 cents. This amount is then deducted from the state fuel tax each driver has paid and refunds are credited directly.

Thousands of self-driving cars are set to join the stream of vehicles moving in, out and around the most congested areas in a few years

As governments increasingly start to track vehicles, and the citizens inside them, concerns about data privacy are growing in leaps and bounds. Tech firms and carmakers are also competing to gain access to the mountains of data the drivers create. This can be used to upsell additional services based on the location of the vehicle, its condition (by using sensors to suggest when it’s time to head for the next garage), or how it’s driven. The latter will play a key role in creating the algorithms that will steer driverless cars in the future.

In the US, the American Civil Liberties Union (ACLU) has voiced concerns in the past about the Oregon project, and others. They worry about data being leaked or stolen. In Europe, EU Commissioner Günther Oettinger pointed out in an interview with Smart Industry (see SI 01/16) that in Europe, as well as in the States, it is far from clear to whom data generated by smart cars actually belongs – the car’s owner or its manufacturer? Clearing this up is conceivable. The Economist explains: “Once motorists have become used to the idea of paying for the road space they take up, rates could be tweaked to account for the noise, pollution and the risk of collisions in each location.” Time will tell.

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