Research and Data
drives the future
Good research and data leads to better decisions. Both quantitative and qualitative data collected during the I-95 Corridor Coalition’s MBUF study will help researchers as they explore the benefits and challenges of a distance-based user fee in real-world scenarios.
Potentially transitioning to a different way of funding our roadways will take creative thinking and exploration. Data from the I-95 Corridor Coalition’s study will help bring the decisions ahead into better focus and provide insights on possible next steps.
As data from this study becomes available, it will be posted here.
MBUF PILOT PROJECTS IN THE UNITED STATES
Several western states have been at the forefront of investigating and demonstrating MBUF as an alternative to the fuel tax for providing a sustainable funding source for transportation. Pilots in other states have established that the MBUF concept is feasible, but needs further exploration and refinement. More recent pilots have explored different account management and mileage reporting options to improve public acceptance and lower administrative costs. However, there is still much to learn.
National experience has found that public misunderstanding and associated political resistance are significant challenges facing the implementation of mileage-based user fees. But data has shown that experiencing MBUF first-hand through pilots has been an integral part of the MBUF education and outreach effort. Overall pilot satisfaction has been consistently high in pilot conducted (see graph).
The notion of “fairness” is an integral aspect of why MBUF is being explored as a long-term sustainable transportation funding approach. As the fuel efficiency increases and more electric and hybrid vehicles are on the road, the amount motorists pay to use our transportation system becomes more linked to the type of car they drive versus the number of miles they drive, with some drivers (those who don’t use fuel) paying nothing at all. The widening gap between the most and least fuel-efficient vehicles has led to an issue of equity.
A mileage-based usage fee levels the playing field by creating a direct connection between the amount you pay and the amount you use (the “user pays” principle) thereby appealing to a fundamental notion of fairness widely accepted by consumers in other marketplaces.
MBUF experiences to date have shown that the majority of participants view MBUF as a fair funding method (see graph).
In spite of recent MBUF pilot success, issues of equity are likely to persist with the concept. MBUF systems are likely to increase the cost of driving for the owners of electric vehicles and hybrid electric vehicles, which may be viewed as unfair to those who have made conscious decisions to reduce fuel consumption and emissions. Furthermore, MBUF systems represent a highly visible new charge from the perspective of the user, particularly since fuel taxes are embedded in the retail price of motor fuel and effectively hidden from the driver. Since MBUF systems are based on actual use, they are perceived as being unfair to drivers who travel further on a trip-by-trip basis and are therefore charged more per-trip. As such, regardless of how technically and administratively feasible MBUF is in one state, equity concerns will nonetheless have to be evaluated and addressed in each state.
In a study done by RUC West (a voluntary coalition of 14 western state departments of transportation that are committed to collaborative research and development of a new method for funding transportation infrastructure), they explored the rural and urban impacts of MBUF. The conclusions to date are that while rural drivers tend to drive slightly more miles per day than urban residents, they are generally driving older and less fuel-efficient vehicles than their urban counterparts. Assuming that a MBUF program will credit any paid fuel taxes back to the motorist, most rural drivers may see a positive impact from participating in a MBUF program. Using different rates based on income, average MPG of the vehicle, and/or classification of the driver’s residence (for example, urban, rural, mixed, commercial) may be a future consideration.
One of the biggest concerns expressed by the public is how data collected on road usage will be protected and that drivers will not being actively monitored or tracked by the government. Recent MBUF pilots have shown mixed results regarding participant satisfaction of how their personal information is protected (see graph).
Recommendations to addressing privacy concerns include:
Provide motorists choices for mileage reporting, including at least one approach that does not involve any sort of technology (such as a set annual fee)
- Do not require a location-based approach
- Set clear guidance on how long the collected data is retained by the account management entity and / or government
- Establishing protections for “personally identifiable information” and identifying the specific (and limited) scenarios under which it may be disclosed
- Create guidance regarding the selling of MBUF data collected by private-sector providers to other entities
- Anonymize and / or aggregate data before providing the information to others
- Enable drivers to opt-in or opt-out of approaches that involve data sharing with other entities and / or long-term retention of the data, particularly when these individuals are using other services offered by a private sector provider
- Allow individuals access to all personal data collected on them – to review it for accuracy, and to ensure only data required for proper accounting and payment of mileage-based user fees (and other services if selected) is being collected.
Replacing the fuel tax that has been in place since 1919 with a mileage-based user fee is no small feat. The research conducted to date has highlighted three specific implementation hurdles:
Cost of implementation, operations and administration – Fuel taxes are a relatively low cost and efficient tax to collect as they are initially assessed and collected from licensed fuel distributors, those companies who receive fuel from a manufacturer, and then distribute it to local gas stations where drivers pay the tax. This means that there are a relatively small number of collection points and generally high compliance. Mileage-based user fees would need to be collected for each vehicle, potentially increasing the cost of collection. Because MBUF often relies on in-vehicle and aftermarket mileage reporting technologies, there are additional costs such as hardware, wireless communications and data processing costs. As such, there is an increasing focus on finding ways to link MBUF system administration and operations with other services offered by the private sector. Moreover, based on recent discussions with private sector account managers, there are potential economies of scales with a large (that is, “millions of vehicles”) MBUF system.
Enforcement and Compliance – In addition to being low cost, fuel taxes are also relatively easy to enforce as any vehicle requiring fuel has paid the tax at the pump. However, enforcement of mileage-based user fees is more complex, and the public is not likely to support a funding system with perceived weak enforcement where individuals can avoid paying MBUF. Different MBUF approaches and supporting technologies will likely have different compliance rates and enforcement costs, with automated methods (such as in-vehicle telematics and plug-in mileage reporting devices) having the highest compliance and relative ease of enforcement as compared to methods that require drivers to voluntarily report mileage (for example, taking a picture of the vehicle’s odometer on a recurring basis). Agencies may also address enforcement issues by increasing the role of the private sector for administration and operation of mileage reporting options and linking mileage-based user fees to value-added services.
Rapidly Evolving Technology and Services — Compared to the technology required to collect the fuel tax, the technology used to support MBUF is new and rapidly changing. Having additional private sector companies with a range of MBUF approaches entering the marketplace is great for the consumer, but interoperability (where technology and systems can cross state borders) will be necessary for national implementation. As the public becomes more comfortable with—and often demanding of—enhanced technology on their persons and in their vehicles, an MBUF approach may become intertwined with other “value-added services” being offered by account managers. In addition, autonomous and connected vehicles pose even more uncertainly into how vehicles operate, who owns the vehicles and what data is shared between vehicles and the infrastructure owners. All of this uncertainly in the underlying MBUF technology and “value added services” creates a challenge to implementing an MBUF system nationally.