In December 2010, the Pennsylvania Turnpike Commission (PTC) set out to determine the feasibility of converting the Pennsylvania Turnpike toll-collection system, including all Turnpike extensions, to an all-electronic tolling (AET) system. This was no small feat for this legacy toll agency dating back to 1940 as America’s First Superhighway. Today, the PA Turnpike remains one of the nation’s largest toll systems and operations in the US with 564 linear miles.
In 2010, PTC selected McCormick Taylor of Philadelphia, PA, and Wilbur Smith Associates of Columbia, SC, to conduct a year-long study on how the (then 545-mile) highway network could switch to a cashless toll-collection system. The consultants prepared a report documenting tolling options available, general system requirements, estimated costs, traffic-and-revenue impacts and implementation schedule involved with such a conversion. If implemented, the cashless system would make Turnpike travel safer, faster and more eco-friendly for all customers.
Twenty-one years ago, AET was viewed as the bright future of the tolling industry due to the benefits for customers and toll-road operators alike. Tolling agencies were just beginning to understand the benefits of new technologies and how they could improve efficiencies in operations while providing enhanced mobility and greater customer service. Few in the transportation and tolling industry could anticipate the speed at which these new technologies would be introduced and how they would change the industry forever.
In 2013, conversion planning, design and employee engagement began at the PA Turnpike in earnest. A series of pilot projects was implemented for testing and evaluation at the Delaware River Bridge in 2016; at the Beaver Valley Expressway in 2017; at two toll plazas on the upper Northeastern Extension and the Southern Beltway in 2018; and at the Greensburg Bypass and Gateway Toll Plaza in 2019.
In March 2020, Covid-19 changed the world that we all took for granted. Overnight, the way we did business, attended school, communicated with one another, shopped, worshipped and paid tolls all changed.
Like most in the tolling industry, the PTC halted cash collection in mid-March 2020. Public health and safety for customers and PTC staff were the critical reason for this change. On 2 June 2020, with Covid cases rising and so many other unknowns, the PTC announced that the cashless, AET system instituted three months earlier to minimise the spread of coronavirus would become permanent.
After 10 years of feasibility studies, planning, pilot programmes, attention to detail and preparation for a future transition to AET, the decision to immediately transition to AET was made. This difficult decision resulted in laying off almost 500 employees, primarily toll collectors and fare-collection personnel. Layoffs, originally planned for early 2022, had to be accelerated given the obvious public health and safety circumstances.
After years in the making and planning, the decision and day that the AET system was implemented was unquestionably challenging for all. PTC CEO Mark P. Compton said, “I deeply regret that we have reached this point, but the world has been irrevocably changed by the global pandemic. This pandemic had a much greater impact than anyone could have foreseen. The PA Turnpike has not been spared from Covid-19. When a toll collector tests positive, for example, the interchange must be shut down, leaving gaps in the Turnpike’s ticket-and-cash collections system. Under these circumstances, ongoing cash collections pose other operational obstacles. There will be no return to cash collections on the PA Turnpike system.”
With the change to AET, customers today move through the lanes at posted speeds without stopping. Their tolls are assessed via E-ZPass, or a PA Turnpike Toll By Plate invoice sent in the mail.
The PTC has been committed to assisting impacted employees. It reviewed internal positions where they could be placed; worked with the Commonwealth to identify job placements for those who hoped to continue in state-related service; provided employees that were laid off with the ability to retain certain health benefits for up to 24 months; and extended a tuition-reimbursement programme to help impacted employees get training for a job in another sector and career.
Speaking about the toll collectors, Compton said: “This is a painful day for all of us at the Commission. I want to thank these men and women for their dedication and hard work over the years; I assure them we will continue to assist them during this transition.”
Traffic and revenue loss
Traffic on the PA Turnpike plummeted during the pandemic by almost 50% since March 2020 compared to 2019; toll revenues dropped by more than $100 million for the fiscal year ending 31 May. Certainly, the PTC was not alone. From California and Washington State, to New Jersey, New York, Georgia and Florida to name a few, traffic and revenues took a dramatic hit.
In June 2020, the PTC took an immediate and deliberate approach to offset revenue loss that offered a degree of flexibility to adapt depending on the crisis’ duration. The steps to mitigate the pandemic’s impacts included:
- cutting capital spending by 25%
- reducing operating expenses
- instituting a hiring freeze
- offering a voluntary retirement programme
- delaying its July transit-funding payment of $112.5 million to the Commonwealth
In addition, the Commission restructured certain outstanding debt for FY21 to lower overall debt-service costs. Separately, it secured a $200 million line of credit to fund operating expenses if necessary, depending on the duration of the pandemic. It also partnered with its industry trade association, the International Bridge, Tunnel and Turnpike Association (IBTTA), and neighbouring toll agencies to seek federal relief funding. Unfortunately, no such funding ever materialised for toll operators.
At the same time toll operators across the globe realised this health crisis presented an array of opportunities as well. From accelerating existing construction projects due to low traffic volume to speeding up plans to move to an AET system sooner than planned. Importantly, customers seemed more understanding about the need for quick changes and were more accepting of such changes. Several toll executives wondered if as an industry we sometimes place too many self-imposed roadblocks or processes in our own way that add to unnecessary delays in advancing projects and incur greater costs.
AET advances nationwide
According to the IBTTA data warehouse TollMiner, Pennsylvania joins Colorado, Georgia, Massachusetts, Maryland, North Carolina, Rhode Island and Washington State as states that accept only AET collection.
Toll operators across the US have continued to grow their AET customer bases and have seen a steady decline in customers using cash payments. In the US, 64 toll operators offer AET collection on 204 tolled highways, bridges, or tunnels.
Prior to their June 2020 conversion to AET, the PTC collected 86.80% of tolls electronically and 13.20% in cash (see table below).
Today, PTC has partnered, and offers their E-ZPass transponders at hundreds of retail locations across the Commonwealth.
As in 2010, when the PTC and other toll agencies began to hear and think about an industry collecting toll payments electronically, today, the industry is experiencing the next generation of toll payments via apps.
Customers have found apps easy and convenient. If this happens on a larger scale, toll operators may someday be out of the business of collecting tolls, instead relying on partners and third parties —allowing operators to focus on operations, construction and maintenance of highways, express lanes, cordon zones, bridges and tunnels to reduce congestion to provide safe, reliable, efficient travel.
ABOUT THE AUTHOR:
Carl DeFebo is communications director of Pennsylvania Turnpike Commission