Transitioning from a fuel tax model to a mileage-based user fee (MBUF) framework involves new technologies and new systems. That could mean higher costs for administration and compliance when an MBUF system is first implemented. To see whether these costs could be reduced, the Eastern Transportation Coalition has explored synergies between tolling and MBUF operations since 2018. Leveraging these synergies by integrating MBUF into tolling operations could make payments easier for drivers and potentially reduce administrative and compliance costs associated with an MBUF system.
In our 2020-2021 MBUF Work, we built on our earlier findings to explore how tolling synergies could potentially lower MBUF system costs. Our tolling work centered on two questions:
- Can a tolling provider also manage MBUF accounts?
- When can MBUF technology that uses GPS most accurately collect tolls?
We found that toll road operators can provide MBUF account management and that GPS-enabled MBUF technology can be used to accurately calculate tolls in certain situations. However, there are important considerations that make it challenging to take advantage of these synergies for account managers that are not also tolling providers.
Tolling Provider as MBUF Administrator
We wanted to understand whether a tolling provider could use its existing systems to administer MBUF. To answer this question, the Coalition partnered with Transurban, an international toll road operator, to conduct a tolling entity-led pilot. Transurban is the operator of the I-95, I-495 and I-395 Express Lanes in Northern Virginia.
The pilot took place in Northern Virginia from July to October 2021 and included nearly 200 Transurban customers and members of the general public.
During the pilot, Transurban performed many of the activities needed to administer MBUF, including:
- Enrolling participants into the MBUF pilot system
- Providing mileage reporting options for customers
- Collecting mileage and fuel use data to determine simulated MBUF payments for participants
- Distributing monthly statements to participants about their driving data (e.g., miles driven and fuel used) and simulated MBUF payment; the simulated payment was based on miles driven, minus a gas tax credit
- Providing customer service for MBUF pilot participants, with overall positive feedback
Leveraging its existing all-electronic tolling system operations, Transurban enacted specific adaptations to support an MBUF framework. For example, they collaborated with the MBUF technology company who provided the devices – with and without GPS – that participants plugged into their vehicle’s OBD-II port for mileage reporting. Transurban managed these devices, and also developed MBUF-specific communications for pilot participants.
This pilot demonstrated that with minor adjustments, a toll road operator can successfully provide MBUF account management activities.
MBUF Technology and Tolls
To determine when GPS-enabled MBUF technology would most accurately estimate tolls, the Coalition team tested several tolling facilities and toll plaza setups in Delaware, New Jersey, North Carolina, Pennsylvania, and Northern Virginia. Participants in this tolling study included members of the tolling entity-led pilot in Northern Virginia, as well as participants in the Coalition’s passenger vehicle pilots conducted in Delaware, New Jersey, North Carolina, and Pennsylvania.
Pilot participants in the study had all opted for GPS-enabled MBUF technology, which they plugged into their vehicle’s OBD-II port to report mileage. Our analysis found that this technology can most accurately calculate tolls in the following scenarios:
- Toll plazas that have a single direction of traffic and that also sit at least 8 feet from other traffic flows or toll plazas
- Tolls charged in a cumulative manner as the vehicle passes through multiple toll plazas along a route
Other setups presented greater challenges for accurately capturing tolls, including:
- Toll plazas or ramps that have traffic going in two different directions and that also have less than 5 to 8 feet of distance between the two adjacent travel directions
- Tolls calculated based on vehicle entry and exit locations
- Toll charges based on congestion levels, when toll charges can change every 10 minutes. To obtain this information, an MBUF account manager requires access to this variable rate information in real-time, presumably via a data link with the associated tolling back office.
These challenges weren’t observed when the tolling facilities were operated by the tolling entity. That’s because Transurban could use its existing readers, cameras, apps, and back office data to accurately capture customers’ toll costs that were accrued in its facilities. This suggests the importance of linking tolling systems with MBUF account management when using MBUF technology to capture toll costs.
Our tolling work identified two main challenges for MBUF programs that are not merged with a tolling back office. First, using MBUF technologies to collect tolls requires that the customers choose GPS-enabled mileage reporting devices. Offering drivers non-GPS choices for mileage reporting is essential to an MBUF program, so using MBUF technology to also record tolls may be limited based on which option drivers choose. Notably, if the tolling vendor can merge tolling services with MBUF account management, a driver can use a non-GPS device and still get accurate tolls.
Second, unless it is used with a tolling provider’s facilities, GPS-enabled plug-in MBUF technology can’t consistently capture accurate tolls for certain plaza configurations.
What It All Means
Our analysis showed that several synergies exist between MBUF and tolling. These synergies can potentially allow for greater cost savings and ease of use. Integrating MBUF into existing tolling system operations, for example, may help reduce the costs of administering MBUF and provide long-term scalability of an MBUF system. And for passenger vehicle drivers using a plug-in device with GPS mileage reporting option, there are opportunities for further synergies between tolling and MBUF collection.
However, there are important limitations to integrating tolling and MBUF technology. Because of these, MBUF is unlikely to fully replace toll tags and plaza infrastructure in the near future. In future phases of MBUF work, we’ll continue to explore the potential synergies and cost savings of integrating MBUF into tolling operations.
Note: More details about the 2020-2021 tolling analysis can be found in chapters 7 and 9 of our report on our 2020-2021 MBUF Work.