Paying for Roads: What are the Options?

Tolling is the oldest form of usage-based fees for roads, tunnels, and bridges. Using tolls is ideal for funding new and dedicated infrastructure such as a specific segment of road, a tunnel, or bridge. As the number of toll facilities have expanded, there has also been an increase in the deployment of electronic toll collection (ETC) and all-electronic tolling (AET) systems. The transition from manual and ETC to AET systems has accelerated across the world due to the COVID-19 pandemic.

All-Electronic Tolling

All-electronic tolling (AET) charges drivers for traveling on a specific segment of infrastructure without the use of toll barriers. The key to acceptance of an AET system is to effectively communicate the benefits of the added facility or infrastructure such as increased mobility, safety, and connectivity to support jobs and economic growth.

Priced Managed Lanes

Priced managed lanes, a subset of AET, charge drivers for traveling on lanes while also offering a free alternative. This method is currently only being used in the United States and Israel. With priced managed lanes, users get a choice of whether to pay more to save time. Priced managed lanes are used to moderate demand, incentivizing drivers to take alternative routes or take fewer trips as a means of limiting traffic congestion. Utilizing dynamic signage and mobile interfaces can communicate to users the time they save on their trips to help the community understand the overall benefits of priced managed lanes.

With mobility pricing, users pay for improved mobility. These are typically time and location-based and generate limited revenue for infrastructure. Mobility pricing has become more prevalent with management of access to central areas of towns and cities in Europe. This method provides congestion pricing for urban access control and to reduce emissions. Drivers who spend more time on the road in congested areas and produce more harmful emissions will pay more than those who choose alternative routes or public transportation.

Road usage charging (RUC) is a tax or fee collected from vehicle owners that is proportional to their use of the public roadway network. Other terms for RUC include distance-based charging, mileage-based user fee (MBUF), per mile fee, mileage fee, or vehicle mileage tax (VMT). They all refer to the same thing. Many policies and incentives are being implemented to encourage the use of fuel efficient and electric vehicles. Due to the shift, the gas tax is becoming less viable for funding roads. The most common reason for pursuing distance-based charging is to bolster or replace the gas tax as a source of network-wide transportation funding. An additional reason for pursuing distance-based charging is to provide a more equitable way to pay for public roadways. All users pay for their share of road use regardless of how new or old their vehicle is.

Unlike tolls, distance-based charging apply to all public roadways within a jurisdiction such as a state. Tolls, on the other hand, only apply to a specific bridge, tunnel, or highway segment. The cost that drivers pay for RUC is a fraction of what they pay for tolls: up to a few pennies per mile, compared to a dime or more per mile, or sometimes even several dollars per mile for bridge and tunnel tolls.

Heavy Vehicle Road Usage Charging

Distance-based charging for heavy vehicles also accounts for the road use and the damage done to the road surface. Heavier vehicles wear down pavements more than lighter vehicles. As a result, heavy vehicles will be paying their fair share for road use since they often cause more damage to roads. It should be clearly communicated how heavy vehicles cause greater wear and tear to roads before implementing this type of system. Today, heavy vehicle national charging systems exist in New Zealand, Austria, Belgium, Bulgaria, Czechia, Germany, Hungary, Russia, Poland, Slovakia, and Slovenia. Trials are underway in Australia.

Light Vehicle Road Usage Charging

With light vehicle road usage charging, all users pay for public roads based on how much they use. New Zealand and three U.S. states currently apply RUC to a portion of their vehicle fleets. Transitioning from the gas tax to RUC will take many years as governments work to design low-cost methods of collecting this fee from drivers that respect privacy and offer a simple, convenient user experience. Pilot tests exploring the array of concepts have been conducted in 10 states including Washington, and interest in this concept continues to gain traction across the country. Other countries such as Ireland, Australia, and the Netherlands are also beginning to examine RUC as an option. Two key principles motivate the exploration of RUC:

1. Fairness: Motorists pay only for what they use.
2. Road Quality: In an era of increasing fuel efficiency and electrification, RUC can compensate for the reduction in fuel tax revenues to create a stable, reliable revenue stream to support the critical maintenance and upkeep of our infrastructure.

Road usage charging could be the future of how we pay for our roadways. Though it can be used in parallel with other road pricing methods, RUC has the potential to serve as a fair, equitable foundation of transportation system funding.