Comment: The opportunity for road usage charging in the UK
Dr Ben Miners, chief innovation scientist at IMS, speaks to Fleet World about how road usage charging schemes could work in the UK.
There is growing speculation that the Government is considering new policy initiatives to raise revenues from motoring, including road usage charging (RUC). The moves come after the Prime Minister brought forward the phasing out of petrol and diesel vehicle sales to 2030. Fuel duty fell by over 50% during the lockdown in April and May 2020, giving the Government a foretaste of declining fuel duty revenues in light of growing demand for electric and other alternatively fuelled vehicles. Fuel duty in the UK normally generates around £27bn a year.
Other jurisdictions have woken up to the challenge of declining fuel revenues. In the USA, IMS (part of UK technology company Trak Global Group), has successfully piloted RUC projects in several US states, and is already deployed in the two states with enacted US programmes, Utah and Oregon.
RUC and electronic toll collection (ETC) are both important solutions to more fairly generate revenue from road users, and we are urging the UK government to take a closer look at our experience.
ETC focuses on specific concessions or fixed points with a roadside/infrastructure approach whereas RUC focuses on the broader transportation network with an infrastructure-free (existing wireless infrastructure) approach.
While the approaches are different, there are synergies when it comes to the management of payments and collection, whether through a prepaid wallet scheme, a recurring fee, or a post-paid model. For example, a common wallet and payment system can be used for both existing tolls and RUC schemes to simplify the end-user experience.
The additional flexibility of RUC enables new virtual tolls to be introduced and transform any road segment or fixed asset into a “tolled” road, which eliminates lengthy construction times and shortens time-to-market compared to traditional fixed infrastructure-based tolling schemes..
The expansion of this payment system to include relevant value-add from partners is also common to both ETC and RUC, where the same wallet can be used to pay for related services including parking, mass transit, active mobility options (e-scooters), EV charging stations, or drive-through retail stores (coffee).
Unifying RUC and ETC through a single, common payment systems ensure road users can travel seamlessly through existing toll gantries in addition to flexible RUC schemes on all other roads, while also enabling convenient payments for broader mobility related services.
Eventually ETC providers must either embrace RUC as part of the solution, or they risk disintermediation. This is subject to long-term concession arrangements and physical infrastructure, but the superset of capabilities RUC provides will make it difficult to justify ongoing investment in gantry-based tolling in many cases when critical mass / most vehicles are equipped with telematics.
Looking ahead, we forecast a significant increase in the adoption of RUC over the next decade as currently enacted programs continue to expand and as more states transition from studies and pilots to beneficial deployments, including IMS’ involvement in pilots in California and Washington in addition to ongoing collaboration with many other states.
We are confident that the change in US administration will not impede rollout of RUC as it already has bi-partisan support in both the House and the Senate. On the other hand, there is a strong possibility that RUC legislation is accelerated at both state and federal level, given early positive indications of a return to the Paris Climate Change Treaty and fast increasing road fund deficits.
The House of Commons Transport Select Committee announced an inquiry into zero emissions vehicles and road pricing before Christmas. IMS will be submitting evidence to the inquiry, citing its US experiences and arguing for a similar approach to the issue in the UK. Previous attempts by government to explore RUC have been stymied by public opinion, but with the clock ticking down to an electric future, it’s hard to see how ministers can continue to defer fair revenue generation from RUC.