Road Usage Charging: WSP USA Drives Equitable Solution for Growing Revenue Gap Problem

As electric and fuel-efficient vehicle usage gains momentum in the U.S., the environmental and energy benefits of this trend have been accompanied by a growing concern among state transportation agencies that depend upon fuel taxes for vital road maintenance, expansion and repairs.

While motorists welcome fewer trips to the gas pump, it also means that less revenue is being generated by vehicles that are still contributing to the wear-and-tear of the roads that those fuel taxes support. This revenue reduction has resulted in a rising gap between revenue and maintenance expenses that, left unchanged, will spell disaster for U.S. roadways. 

To help both state agencies and drivers navigate the changes necessary to adapt to these advancing technologies, WSP in the U.S. is building upon its existing road usage charging (RUC) advisory consulting business with a new RUC operations business, providing more comprehensive resources and expertise related to this more effective taxation model for today’s vehicles.

Also known as a mileage-based user fee or vehicle miles traveled, under a RUC program, motorists pay a per-mile charge to use roadways, instead of a tax based on the amount of fuel they purchase.

Nate Bryer, well known to the industry, recently joined WSP to direct the firm’s newly created RUC operations business and build upon WSP’s successful work for the past decade leading development and implementation of RUC concepts throughout the U.S. Bryer serves as vice president, senior director of RUC operations development.

According to Bryer, part of the challenge facing this business is explaining RUC itself.

“When you present the concept of road usage charging to somebody, there are misconceptions that you need to address, which is why WSP experts have documented information and examples to combat these misconceptions,” Bryer said.

Previously, WSP has primarily focused on the advisory consulting and project management disciplines. 

With this new initiative, the RUC business is being expanded to include technology and operations that will allow WSP to pursue projects that require actual technology solutions for managing accounts, data processing and customer support, along with ancillary functions that are required to support a RUC platform.

There are several methods through which drivers can report their mileage. Two methods are available for connected vehicle systems, one through an after-market plug-in device, and the other being native original equipment manufacturer telematics systems, such as General Motors OnStar or Ford Sync.

There’s also a third option for drivers to manually submit their mileage using a web or mobile app, along with a picture of their dashboard odometer. 

As a full-service account manager, WSP will have end-to-end capabilities to provide all the services necessary for a RUC system to be implemented  — conveniently and safely —  and for it to be a seamless experience for both states and drivers themselves. 

“We’ll be acting as the middleman between drivers and the money, and the states and funding mechanisms to pay for roads and maintenance,” Bryer said. “That includes account management, miles collection, fuel use collection, fee calculation, the actual fee collection and submitting that to the state. We provide different mileage reporting options for flexibility and to give drivers alternatives that suit their personal preferences when it comes to reporting travel data.”

“We’ll also provide the actual user experience through web and mobile apps, handle all the logistics, data analytics and dedicated, live customer support.”

Bryer also described WSP’s RUC platform as a uniquely multifunctional approach.

“We will be able to handle any business that requires real time connected vehicle data. That includes smart roads, smart cities, dynamic pricing, emergency service contacts – basically anything where there’s live data from the road,” Bryer said. “That information can then go to the state so it can take action. That’s what our middle-ground ecosystem will be able to provide.”

This tremendous amount of reported data is a challenge, but WSP has the expertise to interpret all of it.

In addition to providing this comprehensive suite of RUC-related services, WSP also is committed to addressing the many myths that follow the new model.

Bryer highlighted concerns that have been raised by stakeholders for the past decade and which have been addressed by WSP’s RUC pilots.

“There are some persistent issues,” he said. “Who will get to know where I’ve driven? What will they do with that data? Could someone hack into my car through RUC? Can RUC exist with other programs? Can RUC be deployed fairly and cost effectively, while still meeting states’ goals? All of these issues have been examined, mitigated and resolved through our pilots. We know what needs to be done.”

For starters, there are security and privacy concerns of driver data under such a system, but that data is under absolute protection.

“We do not share this data with anyone, including state governments, as we handle the data aggregation and interpretation,” Bryer said. “The relationship between us and the drivers is sacred, and we don’t have any incentives to profit from this data. We want to have a very strong partnership with drivers so that they feel comfortable and safe with us collecting their information.”

Is Road Usage Charging Equitable for Rural Drivers?

Then there are rural drivers who are under the impression that they will be unfairly punished under this taxation program because they need to drive greater distances than urban drivers. But this, too, has been discredited.

“There has been at least a half dozen studies on this specific question, and those studies disproved this and showed that if anything, urban drivers would pay more because while rural drivers may drive further, urban drivers use their vehicles more often,” Bryer said. “We’re currently working with Caltrans to demonstrate in a pilot what we have learned in the studies.”

Additionally, in most cases, rural drivers will find that they pay less than they currently pay through the fuel tax, as a RUC can automatically remove charges on private roads – like farms, ranches or mines – something that is more cumbersome to credit with the motor fuel tax.

Will Transition to Road Usage Charging Be Expensive?

Another concern is the initial cost of establishing an advanced system like RUC.

From an agency perspective, there will be higher cost per dollar of revenue received in the early stages of transitioning to a RUC alternative, which is to be expected when transitioning from a mature system. But as more states and more people transition, the cost of administration will decrease due to economies of scale.

For drivers, states that have conducted pilots or enacted voluntary programs have been very careful to maintain similar costs between RUC amounts and the fuel tax amounts paid by the drivers themselves.

Will I be Paying Twice for Tolling and for RUC?

The issue of paying for general use of roads as well as paying for specific roads has been raised many times.

Anytime drivers use a toll road, they are paying the motor fuel tax for use of all roads as well as an additional fee for the use of the toll road. In most situations, the toll road operator uses only toll revenue for operations and maintenance of the toll facility. So, although gas is still being expended on the toll road, the revenue from the gas tax is used for all state roads. 

But why does it have to be this way for RUC? 

“One of the key advantages RUC has over fuel taxes is that it can be a much smarter version of collecting use fees,” Bryer said. “Customers can choose to make their RUC location enabled. This means that not only can you avoid paying for the use of private roads, but there could also be an automatic exemption of the RUC while driving on toll roads that don’t receive state revenues.”

“We’ve also been exploring ways that RUC systems can coexist with other revenue programs like tolling, transit, registration and parking to create a simpler way for motorists to plan, reserve and pay for their mobility,” he added.

In other words, a RUC opens up new policy options for interacting with toll facilities in ways the motor fuel tax never could.

And then there are electric vehicle drivers who are resisting this change because of the perception that they will lose a key cost-saving incentive to go green.

But as Bryer explained, most states already have an added, enhanced registration fee for electric vehicles, which means that RUC would simply spread that fee over a longer period of time, rather than one larger, one-time fee.

“More importantly, electric vehicle owners will benefit in the long run because, like fuel-based drivers, they need well-maintained roads and bridges for the future,” Bryer said. “Electric vehicles weigh every bit as much as an internal combustion vehicle, so the wear and tear are equal on our roads.

“And in the future when all vehicles become electric, states need to have a taxation approach that will allow them to maintain the funding that they need for ongoing maintenance and repairs.”

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