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Mobility pricing offers new tools for managing mobility

First publishedin ITS International
SeptemberOctober2017
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Evolution towards mobility
Evolution towards mobility pricing

Mobility pricing is the best way of sustaining and enhancing mobility, argues Moving Forward Consulting’s Josef Czako.

Mobility pricing (MP) is effectively the culmination of the ‘user pays’ principle and has been referred to in many policy discussions about electronic toll collection, road user charging (RUC), and pricing. MP not only reflects the ‘use more, pay more’ nature of RUC, it also takes account of the external cost of journeys including pollution, noise, the cost of congestion and accidents. Thus, MP is a tool to manage demand and capacity while also fostering sustainability. Providing travellers with true cost for their journeys (both financially and environmentally) at the trip planning stage also helps to promote modal choice and shared mobility.

Recognising true value

The idea that there is no such thing as a free road has been promoted by tolling organisations for many years - and they are far from alone in their thinking. Governments and both the public and private sectors recognise the funding difficulties transport networks are facing.

Roads have to be built to a quality, not a price and both effective traffic management and meeting travellers’ expectations require instrumentation to detect and monitor traffic and to provide information services. The physical features of roads have also changed with the evolving standards for vehicle restraint and other systems. So modern roads are not cheap, let alone free. 

The environmental imperative to reduce emissions is at odds with the need to fund infrastructure because hydrocarbon-powered vehicles are becoming ever-more economical and several countries are legislating to end the sale of new petrol and diesel cars. This will effectively end the dwindling revenues from fuel taxation traditionally used to fund road building and maintenance (and often to supplement general taxation).

Furthermore, MP aims to reduce numbers of vehicle journeys and encourage modal shift by enacting the ‘user pays’ principle, making it the most equitable method of addressing the funding issue.

With the technology required to achieve MP already available, logic would suggest its earliest possible introduction but such schemes face continuing resistance from politicians. Viewed dispassionately, this is absurd as MP would maintain current levels of mobility-related tax revenues, and in the most equitable manner.

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Discounts can be used as incentives

That absurdity is evident when considering that electric vehicles are premium products, with price tags to match, and yet currently a private purchaser with the budget to afford a Tesla or a BMWi8 would contribute nothing to the upkeep of the roads they use.

Deferred political decisions only delay an inevitability and many would like such changes to be viewed more positively. With an eye on cost-neutrality between transport modes, efforts to calculate the true cost, define the technological solutions and educate the travelling public about the need for a fundamental shift in how roads and associated infrastructure is financed, must be redoubled.

Ideally that journey should have already started, so we have asked some major stakeholders in tolling and charging in Europe for their opinions. Here is a summary of their feedback.

Austria

In 2004 Asfinag, Austria’s national motorway operator, looked to reflect the costs of infrastructure upkeep, stimulate the use of cleaner vehicles and encourage more efficient itinerary choices with the introduction of a distance-, route- and time-based truck charging scheme. No similar MP solution is pending for light vehicles because it says the current vignette system does a good job of encouraging trucks off local roads onto motorways. Conversely, says Asfinag’s CEO Dr Klaus Schierhackl, introducing mobility pricing for light vehicles would push them off the motorways onto local roads, with consequences in terms of congestion and the environment.

In Austria, he continues, EU legislative developments will drive any future changes from this standpoint. Other considerations will include the lack of funds for infrastructure and non-hydrocarbon propulsion systems, as well as levels of congestion.

Schierhackl advocates technological choice for the delivery of charging services and notes that the European Electronic Toll Service advocates on-board units (OBUs) which can communicate with a variety of solutions.

Finland

In Finland, in addition to relatively low national traffic volumes, the contrasting standpoints of the Ministry of Transport and Communications and the Ministry of Finance are behind conflicting views about mobility pricing and distance-based charging.

According to Tuomo Suvanto, senior advisor with the Finnish Ministry of Transport and Communications, his department is interested in mobility pricing and distance-based charging - but the Ministry of Finance does not see the future development of road pricing in the same way. Finland has carried out technical trials of distance-based charging within the Trafficlab project but in terms of application there are fundamental ministerial differences.

“In countries such as Finland, distance-based charging is always going to be a tax and that makes the government the main promoter of any such scheme. The private sector’s roles will be as a technology provider and as an operator,” Suvanto explains.

He identifies the inevitability of falling fuel tax revenue (as electric vehicles become more common) as “something which provides a motivation for the Ministry of Finance.” Meanwhile, transport policy targets can be achieved more efficiently using Mobility Pricing than with traditional measures, something which provides a motivation for the Ministry of Transport and Communications. “The main issues which must be solved are political acceptance, system costs and privacy issues,” says Suvanto.

He feels Finland’s low traffic volumes mean distance-based charging should be applied across all roads. GNSS-based technology could provide a solution (and other solutions may also be relevant in the longer term) and there must be the ability to provide other value-added services in addition to charging.

Greece

Greece’s Attiki Odos Tollway has always had a flat pricing system as the first step of Mobility Pricing, with users of the urban motorway charged the same amount regardless of the journey distance. The aim is to discourage short distance trips in order to avoid congestion. Instead of distance pricing, the Tollway offers frequent users the opportunity to subscribe to a transponder-based service which allows electronic payment, with discounts reflecting levels of usage.

Bill Halkias, the Tollway’s managing director, says the aim is to continue the Mobility Pricing policy but he foresees pressure from users if a distance-based system is introduced in Greece. This poses the threat of traffic diverting from other, currently free-use, roads which will lead to congestion and mean these roads will no longer be as attractive to travellers. Should distance-based charging be mandated, Halkias is hoping to have the opportunity of dynamic pricing, which would be based on demand.

He considers Mobility Pricing as suitable for both the public and private sectors, although both it and distance-based charging will need to evolve if shared and autonomous vehicles become more common/a reality. Technologically, he says mobile phones have all the features to support future charging models. Geographically, he continues, distance-based charging is applicable on interurban roads. Mobility Pricing is more a solution on strategic routes and congestion charging has a role to play in cities.

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Multiple tarrif options
Multiple tarrif options provide flexability for demand management as well as raising revenue

Hungary

Following trials of various tolling methods, operations and pricing solutions, in 2004 Hungary adopted a country-wide road user charging sticker system for all vehicles which allowed access to the motorway on a time basis. Vehicle owners and operators could buy daily, weekly, monthly or annual stickers and costs varied according to vehicle type. As trunk roads provided alternatives to the country’s motorways, use of the RUC system was on a value-added basis.

This approach enabled free-flow operation, but did not support the user/polluter pays principle as frequent travellers paid proportionately less, says Zoltán Varga, CEO of Toll Service, a subsidiary of National Toll Payment Services, Hungary’s national electronic tolling system operator.

In 2008, by implementing the ‘virtual sticker’ system based on the same pricing policy, Hungary introduced Europe’s first all-electronic tolling system that did not need an on-board unit. Charges were differentiated by vehicle type and SMS text message payment was introduced. The ‘virtual sticker’ scheme has been extended to cover the major transit routes and other parts of the public road network for commercial vehicles - resulting in a corresponding revenue increase.

In 2013, a distance-based solution was introduced for commercial vehicles of 3.5tonnes and heavier which implements the user/polluter pays principle as the next step of Mobility Pricing on more than 6,500km of toll roads - including 5,000km of trunk roads. GNSS technology provides the backbone of the service while an open telematics platform solution enables various on-board systems to access the back-office server. The result is a reliable, cost-efficient system that delivers eight times more toll income than the previously applied time-based solution for heavier vehicles.

Hungary has shown it is possible to operate two systems in parallel - a value-added service based on time and a mandatory toll system based on distance. This allows similarities to be aggregated (mainly the technology) and also provides the option of additional services, mainly in the fields of enforcement and ITS solutions, for different users.

Portugal

Portugal’s Brisa Group is addressing mobility pricing and distance-based charging within a business framework which spans Europe and the US. According to Eduardo Ramos, Brisa’s head of business development and CEO of A-to-Be, this recognises trends including urban sprawl, rising congestion, environmental awareness and a challenging road financing environment.

Application, he anticipates, will eventually cover both the public and private sectors, and all types of road. “The main driving forces will be public authorities’ reform of road funding and financing, which has structural tax implications, and citizens/customer demands for better use of taxpayers’ money and improved service levels,” he says. “The biggest hurdles include medium to long-term political alignment and privacy concerns.

“Brisa is pursuing a client-centric, technology-agnostic approach and we believe there will ultimately be several solutions for delivery. In terms of trials, together with Dutch company BNV Mobility we continue to explore mobility pricing within the context of Mobility as a Service. Through our technology arm A-to-Be, we are also involved in the Washington state RUC Pilot.”

Switzerland

In Switzerland, MP is under consideration and while concrete decisions regarding deployment have yet to be made, a few basic conditions have been agreed. These are that MP should include all transport modes and that rather than being a financing mechanism it should be a means of flattening the peaks of network demand across both individual and public transport on roads, and on the rail system.

An impact assessment project in the Swiss Canton of Zug has a series of aims. Jürg Röthlisberger, CEO of Switzerland’s Federal Roads Office ASTRA, says these include defining the peaks - spatial and temporal - of demand, as well as appropriate tariff levels. The assessment will look at the effects on transport, the population, trade and the environment and the results are due in mid-2019. Simultaneously, consideration is being given to related factors such as data protection.

What can we conclude?

The responses show some broad, but discernible, trends and in some instances, the approaches to MP are fairly blunt. Attica Tollway’s flat pricing scheme would appear to support the idea that sophistication is the way forward – the logic being that travellers will pay for convenience. Societally and politically, how such an approach plays out over time will be interesting. The solution, in terms of inclusiveness, was to allow passage to mass transit. So, will sophistication win out? – well the technology is available to allow that to happen.

It will also be interesting to see how Europe and the US might share concepts as with ITS the same terms can have different meanings on either side of the Atlantic - congestion charging being a case in point. In Europe, it describes cordon-based city schemes with a charge payable for crossing a geographical boundary, whereas in the US the same term refers to the ‘user-pays-more’ HOT lane facilities where prices increase as congestion worsens. The question is whether the geographical distinctions will remain. Perhaps the underlying political leanings will dictate what happens. Especially in Europe, it may need to be said quietly to avoid offending sensibilities but ultimately MP is governed by individuals’ willingness and ability to pay.

What is clear is the desire to keep all technology options open, as being too prescriptive will hinder progress and would fail to recognise how swiftly things can evolve. Will MP solutions be based on GNSS, DSRC, cellular technology or something else and will that be embedded within the vehicle, in an OBU or on a smart device? Expect to see all options.

There is agreement that mobility pricing has to happen, since considering all (internal and external) costs of trips it offers also strong elements of dynamic traffic management to foster sustainability. A ‘let’s get on and do it’ mindset is needed but for now the question of what the catalysts for this might be is still unanswered.

Companies in this article

A-to-Be
A-to-Be.com

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