For more than a decade, Oregon has been perfecting technology that would allow the state to charge drivers for how many miles they drive rather than the current system that charges a 30-cent per gallon gas tax at the pump.
Governing magazine, a sister publication of Government Technology magazine, recently detailed how Oregon could make this big policy switch in how roads and other transportation infrastructure is funded. A bill passed earlier this month by the Oregon State Senate would create a pilot of up to 5,000 users for the “pay-as-you-drive” funding mechanism; the legislation is awaiting Gov. John Kitzhaber’s signature.
The legislation is new, but Oregon’s hard look at the necessary technologies is not. For several years, Oregon officials have worried that the rise of fuel efficient vehicles will cut into the state’s gas tax revenues. As early as 2001, the state convened a task force for the purpose of studying alternative funding sources -- everything from a tax on studded tires to tolls on new highways. The idea of a vehicle miles traveled (VMT) fee was also floated.
In 2006, the Oregon Department of Transportation (ODOT) began studying the pros and cons of technology that records drivers’ mileage. ODOT’s first attempted test involved nearly 300 vehicles during a 12-month span in 2006-07. The department developed an “in-vehicle device” which included a GPS receiving unit that measured mileage and determined when the vehicle was in Oregon and in the Portland area. Users were charged a mileage fee instead of a gas tax.
Citing privacy concerns at the time, ODOT designed the system to use a “thick client device” that only computed the sums of the distances driven, and the distances were transmitted to a receiver mounted on a gas pump. GPS coordinates never were transmitted outside of the in-car device.
ODOT deemed the 2006 pilot successful from a technology standpoint, but there were concerns. The in-car devices and pump receivers were expensive; ODOT would manage the program by itself; and some participants were concerned about the mandated usage of GPS.
Oregon decided against moving forward, and the idea went dormant. But the task force reconvened beginning in 2010 and started developing a new approach built upon open standards; the bill that was sent to Gov. Kitzhaber earlier this month requires it.
“This whole new system is about choice and preference,” said James Whitty, manager of ODOT’s Office of Innovative Partnerships and Alternative Funding.
More off-the-shelf choices are available now than before, and they’re cheaper. Whitty envisions a future in which Oregon’s custom computer code that enables machine-to-machine communication -- Whitty calls it a “standard mileage message” -- could be uploaded into all types of consumer products that are already on the market, such as in-car telematics like OnStar or standalone GPS units or even a smartphone app. The devices would then wirelessly transmit the recorded miles driven to a tax payment processor of the user’s choice. The processor would then periodically send the user a tax bill (or if necessary, a reimbursement).
Oregon tried out these open standards in a small four-month pilot program that concluded in February. Forty-four users in Oregon, 21 in Washington state and 23 in Nevada were given several different options for reporting their mileage: a “basic” system installed via a port under the steering wheel that didn’t utilize GPS, but instead calculated miles driven by tracking fuel consumption; an “advanced” system that used GPS to track miles directly; a smartphone option that tracked mileage with vehicle location data; or payment of a flat road usage fee with no mileage calculation whatsoever.
For the “basic” system, the testers could also choose whether to have ODOT or payment service provider Sanef handle the data collection and billing. Sanef managed the “advanced” systems and the smartphone app; ODOT made a policy decision that it didn’t want to collect and store GPS data of its citizens during the pilot. About 60 percent of pilot’s participants chose the GPS options; the others opted for the basic system, Whitty said.
Whitty said giving options proved to be viable. He also was encouraged by Nevada’s and Washington’s involvement, which might indicate that other states could someday adopt Oregon’s open platform. “It worked so easily and marvelously, and it’s flexible and scalable,” Whitty said.
But there are still many obstacles and unknowns to work through before Oregon’s Road Usage Charge Pilot program is ready for full-fledged statewide adoption.
To start, there’s no guarantee that hardware vendors will want to support Oregon’s program. “The real difficulty at the beginning is going to be to convince vendors there is a sufficient market developing for this to be worth their time,” Whitty said. The market certainly will have to grow much larger than Oregon’s proposed pool of 5,000 early adopters. (Raytheon, and insurance market hardware provider IMS joined Sanef in Oregon’s pilot earlier this year.)
Another issue is that there are still kinks in some of the technology. Whitty said the smartphone option, for instance, “isn’t ready for prime time.” He said the smartphone app had to be custom made, and it didn’t track mileage as accurately as it would need to.
It’s also not entirely clear if ODOT or a third party company would become the main owner of the mileage data, or if instead that information would remain decentralized. It likely would depend on which option proves to be the most popular among drivers. Privacy is another concern. The fact that Oregon has given GPS vs. non-GPS options suggests that state officials are well aware that some citizens don’t want their driving habits tracked at all. In the pilot, survey data revealed that those users who were most concerned about privacy overwhelmingly opted for the “basic” device without GPS, Whitty said.
The state would also have to keep an eye out for fraud. “Ensuring that doesn’t happen will be the real trick here,” Whitty said, adding that the pilot showed that the standard mileage message could report both miles and fuel consumption accurately. Time stamps could also be recorded when the device is pulled in and out of the vehicle. Whitty said Oregon is continuing to look at better ways of auditing and checking for compliance.
Perhaps the biggest hurdle Oregon faces in this effort is the battle to win the public’s support and mindshare. Communicating how the technology works to a statewide audience wouldn’t be easy, Whitty conceded. The job has been made harder by recent news headlines about the federal government’s secret and pervasive tracking of Americans’ online lives, and revelations that license plate reader data can be pieced together to follow someone’s every move.
That’s why Whitty is so bullish on giving Oregon drivers choices.
“It’s a matter of integrating the standard mileage message with technologies that are available. That’s what the next step is about,” he said.
Matt Williams was previously the news editor of Govtech.com, and is now a contributor to Government Technology and Public CIO magazines. He also previously served as the managing editor of TechWire, a sister publication to Government Technology.2