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ClearRoad Pulls $2.35M to Boost Mileage-Based Fees

The company has its roots in a pioneering Oregon program that charges drivers based on mileage rather than fuel. Its technology can also be used for tolling, congestion pricing and other forward-looking concepts.

Car driving
If the U.S. transitions to electric vehicles — as predominant market and political trends suggest it will — then the gas tax is doomed. And yet the country has done little in the way of preparing for an alternative to fund roads.

Today, however, a startup has won funding to build up such an alternative. ClearRoad, which uses plug-in devices to charge drivers based on mileage and location rather than fuel, has pulled in a $2.35 million seed round from investors.

The startup actually has roots in the most established program in the nation for mileage-based fees: Oregon’s OReGO initiative, which has been running continuously since 2015 but has a testing history going back to the early 2000s. Frederic Charlier, ClearRoad's CEO and co-founder, worked for tech vendor Emovis when it helped officially launch OReGO six years ago, and saw a need for dedicated software to support the program. That’s how ClearRoad was born.

“We are the data collector or connective tissue between the connected vehicle-Internet of Things ecosystem and the account management,” explained Paul Salama, ClearRoad’s chief operating officer and co-founder.
ClearRoad app
The ClearRoad app.
Source: ClearRoad

There are currently 642 vehicles participating in OReGO, according to Oregon Department of Transportation spokesperson Michelle Godfrey.

The technology works by pulling data from a device plugged into a vehicle’s OBDII port, and can either count mileage on the odometer or use GPS. The latter offers advantages to both the driver and the government in the sense that GPS can help an agency avoid charging drivers for mileage driven outside the jurisdiction, and it can be used for forward-looking ideas such as congestion pricing.

The implications are subtly enormous and not limited to road-use charging. Tolling, for example, often relies on expensive infrastructure — but if a government can charge vehicles based on where they are, it can avoid the need for that infrastructure.

“The thing that actually really excites me is that once you’re using GPS, then you can do much more interesting policies, like have surcharges in metro areas or metro counties around central cities,” Salama said. “You can replicate congestion charging — like New York is pursuing for over half a billion dollars — you could replicate that system digitally for, let’s say, one-fiftieth or one-one hundredth the cost, using a distributed infrastructure of the vehicles [themselves].”

Then there’s the growing trend of connected vehicles, which could eliminate the need for OBDII devices entirely, making the entire process cheaper and more seamless.

“Where the industry is going to go is in pulling from the vehicle itself, rather than requiring a not-cheap … plug-in device,” he said. “And the latest figure I've heard is 95 percent of new vehicles for 2021 have some sort of connectivity built in.”

The concept, on a fundamental level, introduces a new target for data breaches and leaks because it creates a new data pipeline to the government. However, Salama said the company is building with such considerations in mind.

“We have a principle of data minimization … say that connected vehicles generate 300-something data points every second. Well, we don't need 400 data points, we need five or seven,” he said.

The round was led by Space Capital and included participation from Heroic Ventures, Uber Alumni Syndicate, Hunt Technology Ventures and DVC. It’s ClearRoad’s first full investment round, though it has received investment in the past through the URBAN-X program and others.

Editor's note: This story has been corrected to clarify that road use charges are fees, not taxes.
Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.