21st October 2019
Road usage charging to solve our transportation funding dilemma
Dr Ben Miners, Chief Innovation Scientist at IMS (a Trak Global Group company)
Surface transportation is essential to our economy, both within the UK and globally, to enable the flow of goods and services. While our surface transportation infrastructure is pervasive, or perhaps because it is pervasive, its funding and maintenance is rarely considered by road users unless there is an obvious pothole or other imminent issue ahead. Unfortunately, transportation funding itself is rapidly becoming one of these potholes, as highlighted by a recent report from the Institute for Fiscal Studies. A fair and sustainable transportation funding scheme is as essential as the transportation network itself.
Currently, the maintenance and repair of roads relies on funds from fuel consumption. This approach was logical long ago, when all vehicles used internal combustion engines and consumed about the same amount of fuel – in fact, a fuel consumption-based scheme was originally a fair and sustainable solution to fund roads using a proxy for road use. This is no longer the case however, with today’s vehicles and fleets benefitting from years of advancements in fuel efficiency and an increasing reliance on electricity and alternate energy sources. Since fuel consumption is no longer a good proxy for road use, no longer fair, and no longer sustainable, why do we still rely on fuel consumption-based models to fund transportation?
The dilemma of fair and sustainable transportation funding is not isolated to the UK – it is a global issue that has already converged on solutions in multiple jurisdictions to leverage usage-based schemes or road-usage-charging (RUC). These usage-based schemes correct the imbalance in fuel consumption-based schemes by calculating a fair fee based on the distance traveled. Distance is not affected by the fuel type or fuel efficiency of the vehicle and provides a stable basis for road usage. In a usage-based scheme based on distance, road users that travel twice as far contribute twice as much to help fund transportation.
Other options sometimes considered include funding transportation through adjustments to property tax, income tax, tolling, or fuel duties. None of these alternate options provide as fair a solution as a usage-based scheme however, since measuring property value or income does not expose information about the direct and indirect costs incurred to the road network as a result of a specific vehicle or fleet. Increasing fuel duties may provide short-term relief to the transportation funding dilemma, but fuel duties on their own are neither fair nor sustainable due to the increasing portion of electric, hybrid, and highly fuel-efficient vehicles using our roads.
In North America, usage-based schemes are already being deployed for the benefit of all road users after extensive pilots and studies. Some of the key learnings from these successful deployments in Oregon, Washington, California and beyond include the importance of choice, simplicity and trust. For example, delivering solutions for transportation funding independent from emissions and other factors ensures funding solutions are timely, clearly justified, and transparent. Providing each road user with a choice between non-technology and a range of technology-based options to measure and calculate usage fees maintains the solution focus on transportation funding, while enabling road users to make informed decisions and remain in full control of both the method of measurement and the information shared. Some of the technology options deployed overseas include aftermarket devices, OEM-embedded telematics and smartphones.
Offering options enables one road user to choose to include information about the general location of travel and receive a road usage fee specific to the identified roads and jurisdictions, while another road user might choose to only include the distance traveled in exchange for a road usage fee assessed on the entire distance. To isolate location-specific details, protect road user information and enable value-added services, road users receive their services directly from a rigorously qualified independent service provider. The service provider is responsible for the technology, calculation of the road usage fee and remittance of funds to the Government, while respecting and protecting the road user’s choices for information sharing.
Transportation funding is an important issue in the UK and across the globe. To maintain a healthy flow of goods and services to fuel our economy, it is important that we maintain an intense focus on the funding issue and leverage global experiences to introduce a fair and sustainable usage-based scheme in the UK. Extending, adapting or learning from proven approaches will help us realise local solutions quickly to correct legacy fuel consumption-based schemes introduced long before the adoption of EVs and drive for significant fuel efficiency advancements.
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