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21st Century Operations Using 21st Century Technologies
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Surface Transportation System Funding Alternatives Phase I Evaluation: Pre-Deployment Activities for a User-Based Fee Demonstration by the Minnesota Department of Transportation

Chapter 6. Summary and Implications for National Implementation

The independent evaluation assessed the impacts of Surface Transportation System Funding Alternatives (STSFA)-funded activities in a systematic manner across all sites. The key findings of the evaluation are summarized below.

Minnesota is approaching a user fee structure focused on efficiency. The Minnesota approach suggests that the fuel tax, despite its advantages and deficiencies, is likely to continue for a long time, primarily because of its simplicity and efficiency. The cost of collecting the fuel tax in Minnesota is less than 0.5 percent of the fees collected. Structuring a distance-based user fee (DBUF) approach around the mobility-as-a-service (MaaS) business model may afford a comparable level of efficiency to existing tax collection systems because onboard technology embedded in the MaaS vehicles is already used to collect trip and mileage data for the MaaS business. Minnesota aims to have costs of collecting the DBUF fall between that of the fuel tax and sales tax.

  • Administrative costs: While costs related to technology, operations, compliance, and enforcement are likely to be lower in the Minnesota approach, several categories of potential changes to administrative costs attributable to the unique nature of distance based fee collection processes will need to be accounted for in further research and exploration.

The user fee structure is premised on the convergence of potentially disruptive technologies either already in the market or on the horizon. Minnesota’s proposed DBUF system is not a single technology or system, but rather a series of agreements to collect mileage fees from commercial mobility operators. While the future of mobility remains uncertain, this approach allows for a high level of flexibility to adapt and expand. The DBUF system proposed is a simple fee collection from a limited number of commercial operators that provide a mobility service and is neutral to the specific technologies deployed to measure mileage driven by a vehicle.

Minnesota’s approach has the potential for enhancing privacy and minimizing security issues typically associated with road usage charge (RUC) data collection by leveraging currently collected data using currently available technology. In the survey conducted by Minnesota on car-sharing members, a good portion of the respondents (40 percent) had concerns related to DBUF, particularly with regard to how their data will be protected. However, collecting mileage fees directly from the car-share company for the mileage driven for each vehicle does not necessitate the collection of data or information as to what particular driver has made a trip. The data being collected can be based solely on the qualifying, fee-generating mileage for each specific vehicle, regardless of driver.

Minnesota’s STSFA Phase I activities demonstrate progress towards the larger goal of collaborating with MaaS providers. Specifically, the proof of concept demonstrates that DBUF relevant data can be downloaded and transferred to a secure data repository. The approach is responsive to a potential future scenario where vehicle ownership is low and significant share of travel is accounted for by MaaS service providers. However, the likelihood of realization of the specific scenario that is the premise of Minnesota’s approach is subject to several market forces including technology evolution and travel behavior patterns.